LBC Rates Rise Across Sectors, Led by Industrial Gains

SINGAPORE, 27 February 2026 – The latest Land Betterment Charge (LBC) for the period 1 Mar 2026 to 31 Aug 2026 released by the Singapore Land Authority, saw upward adjustments to the average LBC rates across the Commercial (A), Landed Residential (B1), Non-Landed Residential (B2), and Industrial (D), as well as Place of Worship/Civic and Community Institution (E) use groups. Aside from Place of Worship/Civic and Community Institution (E), which recorded the third continual island-wide increase at an average of 3%, Non-landed Residential (B2) recorded the largest average increase of 4.1% on average, followed closely by Landed Residential (B1) at 4.0%, Industrial (D) at 3.2%, and then Commercial (A) at 0.5% on average. Hotel (C) remained unchanged.

Dr Chua Yang Liang, Head of Research and Consultancy, Southeast Asia

蔡炎亮博士, 研究与咨询部主管 (东南亚) commented:

“These latest revision to the LBC rates reflected the shift in mood in the Singapore land transaction market. Persistent strong results in government land sales program would have motivated the Chief Valuer to adjust the LBC rates accordingly. We expected some of the adjustments were also motivated by the residual gap between the implied land value and the market transactions. As such we have seen the Chief Valuer making geographically widest adjustment to the Industrial and Place of Workshop/Civic and Community Institution segments at 100% of the sectors across the island, Non-landed Residential segment for 97% of the sectors, followed by Landed Residential segment at 79%, and finally Commercial segment for only a mere 17% of the sectors. While there is limited transactional evidence of the underlying land values, the Commercial segment registered a marginal average revision of only 0.5%, plausibly motivated by the acquisition of the equity interest in Lasidon Holdings Pte Ltd that owns Serangoon Building as well as Marina Bay Financial Center. 

The effect of this latest change should not adversely impact overall market activities, as the Land Betterment tax primarily affects developments with increased development intensity and land values. LBC rates, however, are meant to reflect the underlying land values and facilitate taxation on the enhanced value resulting from planning permission for a development on land. It is not the Chief Valuer’s prerogative to encourage or dissuade urban development,” opines Dr Chua.

“The recent shift on US tariff rates could dampen consumer and investors’ confidence, although potential cuts in US Fed rate should provide some directional support for the market. Southeast Asia with its ample policy headroom would be able to navigate around this risk and continue to emerge as a net beneficiary of this trade fragmentation. This, together with Singapore’s longer-term affirmative economic and industrial programs, should support the continued confidence of developers and real estate investors in Singapore.

We can expect capital market activity to remain stable in the near-term providing support to future LBC rate reviews,” adds Dr Chua.

A more detailed analysis of the significant changes and our views is provided below.

Based on transactional evidence over the past six months, we expected some increase in LBC rates in this sector, where the premium gap over implied land value was 20%, similar to the 19% recorded in the preceding six months (Sep 25-Mar 26). The average 4% increase has exceeded our expectations of 0.5-1.5% adjustments. The stronger revision suggests a catch up here. Across the 118 sectors island-wide, 79% recorded an increase ranging from some 3% to 10%. Our analysis of recent property transactions revealed a significant increase in land values of over 50%, particularly for landed homes in Sector 113 (Bt Batok/Jurong Road). This is the second time this area has recorded such wide margin between transacted over implied land value, yet with no adjustment this round, suggesting that the LBC rates could be revised in the near term.

On the non-landed front, the transactional activity has been led by government land sale of sites program. The largest premium over the implied land value of 36% was recorded in sector 97 (Bedok South). Strong buyer demand and a planned infrastructure investments (Long Island project) have motivated developers.

Prior to the release, we had estimated an average rate revision of up to 1.5%. The overall average revision of a stunning 4.1% in land values across the island is again exceeding recent trends. The broad base revision, which saw 97% of the 118 sectors across the island register some upward revision of between 3% and 23%, is almost six times the average of 0.7% recorded in the Sep 2025 revision, and is also not surprising, as the average gap over the implied land value for non-landed residential has widened since March 2025.

On the commercial (use Group A) segment, as the Singapore market matures, we should expect fewer green field developments and will have to look towards investment activity to get a sense of where land values may be heading.

Despite the geopolitical uncertainty we have seen a resurgence in investment activity towards the latter half of 2025.

In our observation, whilst there were no reliable transactions for development purposes, we expected an upside of 1% given the underlying investment volume. We are therefore not entirely surprised by the average 0.5% marginal increase provided by the Chief Valuer. 17% of the 118 sectors across the island recorded an increase of some 3-4%, presumably motivated by the recent equity transaction of Lasidon Holdings Pte Ltd that owns Serangoon Building as well as the one-third interest in Marina Bay Financial Centre Tower 3.

Despite the weakening external trade environment, the development market for the industrial segment was driven by a fair share of government sale of sites program and private collective transactions. Overall, the premium of transacted price over the implied land value was some 102% across the island, similar to what was recorded in the previous period (Mar-Sep 25). We are therefore unsurprised that the Chief Valuer has lifted LBC rates across 100% of the sectors island-wide ranging between 2-9%, resulting in an average adjustment of 3.2%, the largest increase we have seen since the 15.4% revision back in Sep 2013. Aside from Place of Worship/Civic and Community Institution (E), which recorded a continual island-wide upward revision since Mar 2025, Industrial (D) has the highest percentage of sectors that recorded an upward revision to the LBC rates.

LBC rates would not shift the needle significantly as it mathematically constitutes only a small portion of the overall development cost. The LBC is applied to that additional portion of development that exceeds the approved density unless there is a change in the zoning. These refreshed rates should not have any significant drag on the market trend or dampen developers' and investors' longer-term confidence in the underlying property market.

The LBC reflects the underlying land valuation. “This recent adjustment is a reflection of the strong interest in government land sales program and also buyer demand. While the average increase of 4-4.1% for landed and non-landed residential is not alarming considering we have seen much higher increment of 7.8% (landed) in Mar 2024 and 12.9% (non-landed) in Sep 22, it is the strongest increase we have seen of late,” opines Nicholas Ng, Senior Director, Capital Markets, JLL.