100 Tax Allowance Land Use Scheme Cover More Projects
Desmond Lee, the Minister for National Development and Minister-in-charge of Social Services Integration, recently announced that the Land Intensification Allowance (LIA) scheme will be expanded to cover a wider range of facilities. This scheme, which is overseen by the Building and Construction Authority (BCA), aims to promote the intensification of industrial land use for higher-value activities.
At present, the LIA scheme supports Integrated Construction and Prefabrication Hubs (ICPHs), which are multi-storey and highly mechanized or automated facilities that produce prefabricated precast concrete components off-site. However, the expanded scheme will now also support construction or additions & alterations (A&A) works in multi-storey Design for Manufacturing and Assembly (DfMA) facilities. These facilities provide a different set of services compared to ICPHs, such as fit-out works for pre-fabricated modules and storage of prefabricated components. They also manufacture products like prefabricated mechanical, electrical and plumbing systems, structural steel, mass engineered timber, and three-dimensional concrete printing.
Under the LIA scheme, a tax allowance of up to 100% of the qualifying capital expenditure incurred for the construction or A&A works of a qualifying building is provided. This tax rebate is for the corporate tax of the building owner, with an initial tax allowance of 25% of the qualifying capital provided during construction and a 5% annual allowance thereafter, until the total tax allowance reaches 100% of the qualifying capital expenditure.
To qualify for the expanded scheme, new multi-storey DfMA facilities (excluding ICPHs) must have a minimum gross plot ratio (GPR) of 1.03. Existing facilities that have already met the GPR threshold and wish to take advantage of the LIA scheme for A&A works must demonstrate that the works will result in a 10% increase in the building’s GPR. Additionally, at least 80% of the total gross floor area of the qualifying facility must be used by the building owner or its related users.
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Companies developing new multi-storey DfMA facilities can apply for the expanded LIA scheme from January 1, 2026. This move is expected to further incentivize the development of higher-value industrial facilities and support the growth of the construction sector in Singapore.