Written Answer by Ministry of National Development on development charge for hotels and backpackers’ hostels

Nov 4, 2019

Mr Gan Thiam Poh: To ask the Minister for National Development whether the Ministry will review the existing uniform development charge and differentiated charges for hotel operators and backpacker hostel operators as both cater to different types of tourists and backpacker hostel operators provide basic common and shared facilities, to ensure a more level playing field for the industry.

Answer:

Development Charge (DC) is a tax payable on any enhancement in land value arising from URA granting planning permission for a development application. The DC system allows the State to channel the gains from the enhancement in land value to offset the costs of developing public infrastructure (e.g. roads and utilities). 
 
DC Rates are broken down in nine broad use groups and 118 geographical sectors. Hotels and backpackers’ hostels are under the same broad use group, as they both provide short-term accommodation and are allowed on sites zoned ‘Hotel’ under the Master Plan. 
 
However, land owners and developers who think that the prevailing DC rate overstates the value of their land can request for a spot valuation. In such an instance, the Chief Valuer will then look at the specific proposed use of the land, and determine the valuation based on that specific use.