A new Land Intensification Allowance (LIA) will replace the current Industrial Building Allowance (IBA) with qualifying firms being granted a first-time allowance of 25 per cent, then five per cent annually for qualifying expenditures on the construction of buildings.
Structures from the pharmaceutical, petrochemical, petroleum, chemical, semi-conductor, aerospace, marine & offshore, as well as solar cell manufacturing and other speciality industries are currently the nine sectors that qualify for the LIA.
These buildings must also be built on land zoned as Business 1 or Business 2 under the URA’s Master Plan.
Buildings must also meet the Gross Plot Ratio benchmark relevant to their industry sector, and will be set at the 75th percentile of GPRs for the sector.
The new allowance will be in place for five years, starting from July this year (2010), and will be administered by the Economic Development Board.
The measure to improve land use were announced in Parliament on Monday during the Finance Minister’s Budget speech.
Finance Minister Tharman Shanmugaratnam, said: “The new Land Intensification Allowance or LIA will apply to nine sectors identified to have large land take. It will give business in these sectors tax allowances on their building costs if they meet or exceed the Gross Plot Ratio bench marks set for each sector. To encourage land intensification, these benchmarks will be set around the 75th percentile of actual GPRs for each of these sectors. Businesses that meet this bench mark will receive more generous allowance than are currently offered under the IBA.”
Source: Channel News Asia, 22 Feb 2010