Development charge for new buildings up to 70%

Development charge for new buildings up to 70% 
THE government has raised the Development Charge (DC) for new building projects to 70 per cent from 50 per cent.
A land development charge is levied on developers when there is an increase in the value of land site due to rezoning.

The revised rates will apply to development applications where provisional permission is issued from Wednesday.

They will also apply to cases that are granted a second or subsequent extension to their provisional permission on or after this operative date.

Property analysts say the move will take some heat off the en block frenzy, which has pushed up prices of such collective sales in recent months as sellers will now get less.

A statement from the National Development Ministry (MND) on Wednesday said the DC rates have been revised to reflect the appreciation in land value, and is a reinstatement of what it was in 1985.

For land with title restrictions on the use and intensity, which are subject to a levy of Differential Premium by the Singapore Land Authority, it will similarly be adjusted to the 70% rate.

The land value of a site can be enhanced due to the government’s action in rezoning the site to a higher value use or increasing the plot ratio.

The DC system, where a part of the enhancement in land value is taxed, allows the state to have a share of the gains from the value enhancement arising from its grant of planning approval.

The portion of the gain taxed by the government can then be used to offset expenditure on infrastructure movements, such as road and rail works, as well as utilities, to support the higher land zoning or intensification of land.

The balance of the gain is retained by the owner and provides and incentive for him to undertake the development work.
The Straits Times, 18 July 2007

Sentosa Cove launches plot for cluster housing

Sentosa Cove launches plot for cluster housing 
By Fiona Chan 
SEMI-DETACHED and terrace houses will soon be available at Sentosa Cove, as the island enclave launches its first and only plot for strata-landed housing today.
Several posh condominiums and bungalows have already been launched at Sentosa Cove.

The new site - called the Green Collection - overlooks the Tanjong golf course. It will allow developers to build 15 to 20 detached, semi-detached or terrace houses.

The cluster can have shared facilities, such as a swimming pool or gymnasium, Sentosa Cove said yesterday.

The company has set a reserve price of $49.25 million for the 71,589 sq ft site or $688 per sq ft (psf) per plot ratio. This compares to a high of $1,473 psf for a bungalow plot sold earlier this year.

Mr Lui Seng Fatt, regional director and head of investments at property firm Jones Lang LaSalle, believes the reserve price is ‘quite a fair value’. Bids will not be very much higher than the reserve price, he added.

‘Compared to the earlier sites, the views of this site are not so good,’ Mr Lui said.

‘I would expect the finished homes to sell for about $1,000 to $1,200 psf. This means the land price can’t go much higher than the current reserve price,’ he said.

The Green Collection has a plot ratio of one and opens up to the Tanjong golf course on one side. Its other side faces the Waterfront Collection condominium.

 The Straits Times, 18 July 2007

Public v private donation: What’s the difference?

Public v private donation: What’s the difference? 
Govt seeks public’s views, due to change in spending rules for charity sector
By Maria Almenoar 
AN EFFORT is under way to clearly define the somewhat blurred difference between a public and a private donation.
The question has become key because of changes made to the charity sector during Parliament’s Budget debate in February.

For instance, foreign charities now do not need to spend 80 per cent of the private donations they collect here on causes in Singapore.

But the rule still stands for public donations.

Making the distinction clear will help ensure that donations from the man in the street are safeguarded, said the Ministry of Finance (MOF) and the Ministry of Community Development, Youth and Sports (MCYS) in a press release yesterday.

They noted that private donors are generally assumed to be more discerning in their giving.

Members of the public who wish to offer suggestions on how to clearly define what is a public or private donation can do so at www.mof.gov.sg until Aug 17.

The ministries have in the meantime proposed that the definition of public donations cover not only house-to-house and street collections but also any form of mass media publicity to appeal for donations.

These will include appeals through banners and billboards as well as donation boxes accessible to the public.

The use of telemarketing, fliers and mass e-mail is likely to fall under public donations as well.

Private donations, said MOF and MCYS, should be sourced from people who have a ‘defined relationship to the organisation’.

This could include subscribed members, business associates and personal friends.

Fund-raising appeals for private donations should also not be advertised to the general public.

The move to do away with the rule that charities must spend 80 per cent of what they collect in private donations here in Singapore is designed to attract more global and local philanthropic organisations to run their operations here.

Commenting on the change, Habitat for Humanity Asia-Pacific director for resource development and regional programmes Usha Menon said: ‘We have corporations or individuals who make private donations for a particular community overseas, for example, an orphanage in China. Now it’s clearer how to channel these donations.’

Two other changes to support this vision were also announced in this year’s Budget.

Charities - both foreign and local - no longer need to spend at least 80 per cent of their annual income receipts on charitable causes here within two years to enjoy income tax exemption.

Another change allows for double tax deductions for all donations made to philanthropic organisations as long as the money is eventually channelled to Institutions of a Public Character (IPC) here.

IPCs are charities that are allowed to collect tax-exempt donations.

A spokesman for the National Volunteer and Philanthropy Centre said that the rule changes are unlikely to hit local charity work.

The savvy international organisations, with their ‘well-oiled fund-raising machine’ may ‘well appeal to would-be donors who otherwise might not have the inclination to give locally’.

 The Straits Times, 18 July 2007

Tougher rules to stop bankrupts taking flight

Tougher rules to stop bankrupts taking flight 
Alerts on new cases to be relayed faster between govt agencies
By Goh Chin Lian 
NEW measures are to be introduced to help prevent bankrupts from fleeing Singapore. They include government agencies relaying information on new bankrupts to each other more swiftly.
The measures come in the wake of former National Kidney Foundation chairman Richard Yong leaving Singapore without permission within hours of being made a bankrupt on May 16.

The changes were announced by Law Minister S. Jayakumar on Monday, in a written reply to Dr Teo Ho Pin (Bukit Panjang), who had asked about the measures in place to stop bankrupts from taking flight.

It is understood that when Yong left Singapore, the Immigration and Checkpoints Authority officials were not told of his status and flight risk until hours after he had passed through Woodlands Checkpoint for Malaysia.

He has since agreed to be extradited from Hong Kong to Singapore.

He claimed in an interview with The Straits Times last Thursday that he did not know bankrupts must get permission from the Official Assignee (OA) to leave the country. Otherwise, they can be jailed and fined.

The OA is an officer of the court who administers the affairs of bankrupts.

One of the new measures calls for the OA to notify would-be bankrupts earlier about travel restrictions and the penalties for failing to comply.

Currently, a person is briefed about the restrictions only when he is declared a bankrupt.

The reason a bankrupt has to seek the OA’s permission for overseas travel is to help the OA administer the bankruptcy estate and to prevent the bankrupt from hiding income earned or disposing of his assets overseas, said Professor Jayakumar.

Creditors and their lawyers too will be made more aware of the legal provisions for dealing with bankrupts and would-be bankrupts who are potential flight risks.

Prof Jayakumar did not elaborate on how the measures would be carried out.

He said the new measures will strengthen the current system which, overall, ‘has worked well’.

Last year, 77 bankrupts were taken to court for unauthorised travel, up from 68 in 2005 and 40 in 2004.

Another 22 were given a warning, compared to 21 in 2005 and six in 2004.

The 99 bankrupts taken to task last year form about 0.4 per cent of over 24,000 bankrupts here.

Most bankrupts seek permission before going abroad, with nine in 10 applications approved last year, said Prof Jayakumar.

Last month , reader Thomas Mathew Koshy wrote to The Straits Times Forum, suggesting that all bankrupts be blacklisted, instead of confining the list only to those who are considered likely to abscond or be involved in lawsuits.

By doing so, bankrupts do not, knowingly or unknowingly, commit the criminal offence of leaving the country without permission, Mr Koshy said.

Although Prof Jayakumar did not refer to the letter, he noted that with more than 24,000 bankrupts, the OA has to take a targeted approach.

The OA relies on tip-offs from the public and conducts routine checks on the passports of bankrupts to catch those who travel without permission.

The OA also works closely with creditors and their lawyers, who have the greatest interest in monitoring the bankrupt’s conduct and can provide the relevant information, the minister said.

 The Straits Times, 18 July 2007

MAS to be regulator for all futures trading

MAS to be regulator for all futures trading 
THE trading of financial and commodity futures is to come under one regulator: the Monetary Authority of Singapore (MAS).
At present, commodity futures trading is regulated by International Enterprise (IE) Singapore, under the Commodity Trading Act, while financial futures trading is regulated by the MAS, under the Securities and Futures Act and the Financial Advisers Act.

Their consolidation under a single regulator was set out in the Commodity Trading (Amendment) Bill, which was passed by Parliament yesteday.

In presenting it for debate, Minister for Trade and Industry Lim Hng Kiang said multiple regulators increase regulatory costs ‘as markets converge and institutions participate in both financial and commodity futures markets’.

With the change, the regulation of commodity futures trading under the Commodity Trading Act will thus be transferred to MAS, under the Securities and Futures Act and Financial Advisers Act.

Consolidation will streamline licensing and compliance procedures, he added.

‘For example, firms broking both commodity futures and financial futures would need to hold only a single licence from MAS, as opposed to the current requirement of obtaining two separate licences from MAS and IE Singapore.’

To effect a smooth transition for those dealing in commodity futures, such as the Singapore Commodity Exchange, the Bill empowers MAS to make ‘transitional arrangements’.

The changes will not affect regulation of over-the-counter commodity derivatives and spot commodity contracts, ‘as the current regime continues to serve its purpose’, Mr Lim said.

——————————————————————————–
CUTTING RED TAPE

‘For example, firms broking both commodity futures and financial futures would need to hold only a single licence from MAS, as opposed to the current requirement of obtaining two separate licences from MAS and IE Singapore.’
MINISTER FOR TRADE AND INDUSTRY LIM HNG KIANG

 The Straits Times, 18 July 2007

Woodsville condo site draws 8 bids; top offer at $50.7m

Woodsville condo site draws 8 bids; top offer at $50.7m 
By Grace Ng 
GOOD news for home buyers: More suburban condo units should be coming on stream in Woodsville Close, now that a residential site up for tender there has attracted eight bids.
The Urban Redevelopment Authority (URA) yesterday announced that it had closed the public tender for the 3,870.5 sq m site near Potong Pasir MRT station.

If sold, Woodsville Close, which has a 99-year lease and a maximum permissible gross floor area of 116,648 sq ft, will be the first suburban residential site sold by the URA this year.

The URA launched the tender for Woodsville on June 19, following the Government’s move to release more office and residential sites in order to give developers more options and ease a tightening supply situation.

The eight bids from developers for the site ranged from $32.6 million to the top offer of $50.68 million submitted by developer Frasers Centrepoint.

Frasers’ bid, at $434 per sq foot (psf) per plot ratio, is about 69 per cent above the reserve price of $30 million, which works out to $257 psf per plot ratio.

‘This price will translate into a break-even price of about $750 psf to $800 psf for the future apartment project to be built on this site,’ said Mr Leonard Tay, director of CBRE Research.

The second highest bid of $46.8 million was submitted by Eastpoint Development. Other developers that put in bids include EL Development and Meadows Property.

Property consultants pointed to the Woodsville site’s convenient location near Potong Pasir MRT station, expressways and schools such as St Andrew’s Junior College as a draw for developers looking to target the suburban market.

Knight Frank director of research Nicholas Mak estimated that about 90 three-bedroom units may be built on the Woodsville site. He expects the units to be ’sought after by HDB upgraders’ from areas such as Sengkang, Upper Serangoon, Potong Pasir and Bishan.

Mr Tay noted that recent HDB data showing the average cash over-valuation for resale flats in central areas such as Bishan and Toa Payoh range among the highest islandwide, from $13,900 to $33,600 for the various flat types.

‘This would provide greater incentive for HDB households in these nearby estates to make the transition to private property,’ he said.

URA said in a statement that it will announce the award of the tender ‘at a later date’.
 The Straits Times, 18 July 2007

Latest property data: What does it mean for home buyers?

Latest property data: What does it mean for home buyers? 
Big price ranges likely due to exceptional units; median price is the best guide
By Fiona Chan, Property Reporter 
ALL THAT GLITTERS…: At The Orchard Residences, the median price is $3,392 psf, a far cry from the top $5,000 psf price. — PHOTO: ORCHARD RESIDENCES
 
HOME buyers in Singapore have never been so well-informed as they are right now.
In response to endless reports about soaring prices, the Government has been steadily releasing new data about the property market to inject some transparency and calm.

Its biggest move came on Monday when it unveiled a comprehensive record of brand-new homes sold last month - direct from the mouths of property developers.

This details the lowest and median prices in every project, in a bid to counter the potentially distorted picture that may result from developers trumpeting only headline-grabbing prices.

But what is a potential buyer to do with this deluge of data? How can he use it to figure out how much to pay?

The new data reveals, for the first time, the range of prices and the median price fetched by each of 329 projects for last month. It will be updated monthly.

What jumps out at first glance is the very broad range of prices at certain developments, such as The Orchard Residences. Here, the cheapest unit last month went for $2,620 per sq ft (psf) - almost half the level of the priciest one, sold at $5,000 psf.

Some cynics put this down to heavily discounted units at the lower end.

But property experts, noting that these wide price ranges are only in the highest-end projects, offer another view.

For most developments, it is common to pay a higher price psf for a higher floor with a better view. Each successive level commands a premium, such that the top-most units are often the most expensive.

At high-end developments, the premiums that buyers are willing to pay for higher floors shoot up, because these are usually the choicest units in the development.

In certain luxury projects, the price range is widened even further by one or two outlying, special units that go for top dollar.

There, the difference in the highest and lowest prices could translate into the difference between an average-sized unit on the 7th floor that faces a dumpster, and a spacious penthouse on the top floor with 360-degree city views and customised fittings.

Indeed, for The Orchard Residences, the unit that fetched $5,000 psf was the penthouse on the 54th floor, said developer CapitaLand.

‘At the very high end of the market, the buyers want the best units in the best developments,’ said Mr Lui Seng Fatt, regional director and head of investments at Jones Lang LaSalle.

‘There are only so many penthouses in prime districts, so the premium they command for their space and their height can be quite significant.’

So how can an average buyer tell if a project’s price range is being widened by just one or two exceptional sales?

This is where the median price comes in. By definition, half the units in a project are sold above this level and the other half below it.

For most projects, the median price is almost perfectly in between the lowest and highest sale prices. This implies that prices are quite evenly spread within the project.

At Ferraria Park in Changi, for instance, 47 units were sold last month at between $546 and $744 psf. The median price was smack in the middle, $650 psf.

But at some luxury projects, the median price is actually much closer to the lower end of the range. In other words, many are far more affordable than their headline prices imply.

At The Marq on Paterson Hill, the median price was $4,044 psf - much nearer the $3,604 psf lowest price it fetched than the $5,100 psf on the other end.

Similarly, the median price for The Orchard Residences was $3,392 psf, a far cry from the top $5,000 psf price.

For most buyers, the median price is by far the best measure of a development’s pricing structure.

It is, roughly, the cost of a unit that ‘is halfway up the block in terms of which storey it’s on, has a glimpse of the pool instead of a full pool view, and has a bit of afternoon sun’, said Mr Nicholas Mak, director of research and consultancy at Knight Frank.

‘If the development comes with a range of units, the median price will probably be for a three-bedroom unit.’

So a buyer looking for a unit on a higher floor or with a better view should expect to pay more, Mr Mak added.

But buyers should also be aware of the limitations of this new data, especially as the market is moving so fast.

‘If the data for June comes out in mid-July, but developers raised prices at the beginning of July, then the data will already be outdated when it comes out,’ noted Mr Ku Swee Yong, director of marketing and business development at Savills Singapore.
 The Straits Times, 18 July 2007