2008 09 02 - Waiver Aimed At Lessees Of State Land

Waiver aimed at lessees of state land What is a building premium? It is a charge payable by an owner when he extends the lease on state land. The amount is determined by the chief valuer but not disclosed as it is computed into the land premium. The premium is calculated based on the building’s condition. Lessees tended to let properties run down until the leases expire in the hope of paying less when they extend their lease. Why waive it? It is to encourage lessees to continue to invest in the upkeep and improvement of a property when a lease extension is granted so they will not let the site run down. If a building premium is payable, lessees will not be motivated to upkeep, improve or redevelop a property. It is not meant as an incentive but rather removes a factor that may have discouraged improvement work. What’s the impact? The waiver is expected to have minimal impact as few people will be affected, although lessees of long-term industrial land are among those likely to benefit. In general, the Government will allow leases to expire without extension. It will consider lease extensions on a case-by-case basis. For instance, it may allow extensions for conservation properties to give as incentive for lessees to carry out major conservation works. Source : Straits Times - 2 Sep 2008