The levy, known as a land betterment charge, has become a point of contention in talks with some prospective buyers of Tunku Ismail’s 16.6-hectare site between Holland Road and Tyersall Avenue, Bloomberg reported, citing people familiar with the matter.
Tunku Ismail, the site’s owner as well as the crown prince and regent of Malaysia’s Johor state, wants the buyer to bear the cost of the tax, the people said.
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Tunku Ismail Sultan Ibrahim, the Regent of Johor and son of Malaysian King Ibrahim Iskandar. Photo by AFP |
The additional cost and uncertainty over the exact amount have frustrated some Singaporean and Malaysian property developers, particularly given the complexity of the transaction, the people said, adding that Tunku Ismail’s representatives are approaching potential buyers in the U.S. and other markets.
Estimates from three local property analysts cited by the news outlet put the tax at over S$2 billion (US$1.6 billion).
The land earmarked for sale originally covered 21.1 hectares and had been held by the Johor royal family since the 1800s.
A land swap with the Singapore government last June, aimed at moving any development on the plot farther from the nearby Singapore Botanic Gardens, saw the 13 hectares closest to the UNESCO World Heritage Site traded for 8.5 hectares of nearby state land, bringing the Regent’s holdings in the area to 16.6 hectares.
Tunku Ismail then applied to the city-state’s Urban Redevelopment Authority in March to develop low-density housing and luxury homes known as good-class bungalows (GCBs), The Business Times reported.
After reviewing the application, the agency proposed rezoning the land parcels for residential use, adding that part of the site zoned “residential” would also be designated as a GCB Area if the development plan is approved.
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The land parcels (Plots A and B) owned by the Regent of Johor that are planned for development. Photo from Urban Redevelopment Authority’s website |
If rezoned, the land could be worth S$3.8-4.7 billion, according to Nicholas Mak, chief research officer at local property portal Mogul.sg.
The Singapore Land Authority said the amount of tax payable “will be determined following the grant of permission to develop the land” and in accordance with relevant legislation.
The levy, which is imposed when government planning permission or other approvals increase land value, would be payable by whoever owns the land when the approval is granted, though the owner can nominate one or more other parties to make the payment.
Tunku Ismail is the eldest of Sultan Ibrahim’s six children. The Johor royal family’s wealth was estimated at US$5.7 billion in 2024, with their property holdings in Singapore making up a sizable portion of that fortune.