Development Charge Calculations Q4

Thomas Sim PEA2066

Q.
With reference to Town and Country Planning Act 1976 (As amended), calculate the total Development Charge of the following:

(a) Nazri proposed to develop a housing scheme of 200 residential units on his 3 acre plot of land. The local plan indicate that the development density in that area is 20 persons per acre. The Development Charge payable is RM6,000 per unit. (10 marks)

(b) Yeng Li proposed to erect a shop-office with a floor area of 2,500 square metres on Lot 23 Mukim Kuala Lumpur which has a land area of 300 square metres. The plot ratio in the vicinity is 1:3 with the building plinth of 80%. The Development Charge payable is RM60 per square metre. (10 marks)

(c) Tijani proposed a development of commercial building on Lot 335, Mukim Petaling, having land area of 3,500 meter square. The local plan indicates that the lot is zoned for residential use. Land value in the surrounding area is RM500 per square metre for residential usage and RM900 per square metre for commercial. The Development Charge for land use is at 30% of the increase in market value. (5 marks)

(25 marks, 2016 Q4)

A.
For a good reading on how to calculate development charge, refer to Saiful Nizam Hj Ali, Guideline on Property Development in Malaysia, available at

https://www.academia.edu/5173271/GUIDELINES_ON_PROPERTY_DEVELOPMENT_IN_MALAYSIA

(a) Population density

According to Planning Act 1982( Federal Territory) - Density means highest and best usage of the particular land, calculated based on the amount of people, residential unit or any space that can be occupied or any annex attached to any hereditament for usage for a particular land.

CDP 1040& CDP 1039 UNDER FEDERAL TERRITORY STURUCTURAL PLAN.

  • For an area within 36 sq miles from the town center the Basic zoning density is 10 to 40 people per acre which any excess of the requirement is chargeable with Development Charge.
  • For any land in federal territory not listed CDP plan 1040, 1041& 1039 was zoned as residential purpose with the basic zoning density is 60 people per acre.
Comprehensive Development Plan (CDP) and Center Planning Area (CPA) plan are referred above. However, the question already put this zoning density at 20 person per acre.
The assumption is the one unit household should not exceed 5 person. This assumption is used in Saiful Nizam's sample calculation as well as in other answers by lecturers of academic institution. Why is it 5 person per household, I really do not have a valid reference to cite.
If at 5 person per household, the total number of people in this proposed development is

200 x 5 = 1,000 persons, however allowable density is 20 / acre, which is only 60 persons in 3 acre.

In 3 acre land, total allowable units = 20 x 3 / 5 = 60 / 5 = 12 units.
Proposed unit = 200 units, but the allowable units is 12 only. Thus, it has exceeded by 188 units, and thus the development charge payable @ RM6,000 per unit is
 
188 x RM6,000 = RM1,128,000

Ref:
Saifu Nizam Hj Ali. Guidelines on Property Development in Malaysia. Academia.edu, available at
https://www.academia.edu/5173271/GUIDELINES_ON_PROPERTY_DEVELOPMENT_IN_MALAYSIA


(b) Plot ratio and plinth area

“plinth area” means the proportion to be covered by building of the area of any lot;

“plot ratio” means the ratio of the total floor area of a building to the area of the building plot as measured between the survey boundary lines or, if there are no survey boundary lines, between
the provisional boundary lines;

Plinth area is 80% means on the 300 sqm of land, the building can occupy 80%, which is

300 sqm x 80% = 240 sqm

Plot ratio for this building would be at 1:3 which means the total area allowable is 240 x 3 = 720 sqm.

The total proposed office floor area is 2,500 sqm. This increase in floor area is 2,500 - 720 = 1,780 sqm.

Development charge payable is

RM60 x 1,780 = RM106,800 

Ref:
Section 2, Interpretation of Town and Country Planning Act, 1976.

(c) Increase in Value by change of category

This is calculation of development charge from residential to commercial.

The original value of residential use is RM500 x 3,500 sqm = RM1,750,000

The change of use to commercial use would make the value to be RM900 x 3,500 sqm = RM3,150,000

The increase in value is RM3,150,000 - RM1,750,000 = RM1.4 mio

Development charge is levied at 30% of this increment in value = RM1.4 mio X 30% = RM420,000.

Ref:
Own account.