Development Charge

​DEVELOPMENT CHARGE​

​Introduction

  1. Development Charges are charges given by the local authorities to any applicant for development if there is a Local Plan or Local Plan Alteration of land owners on the approval of the planning that leads to the increase of value of the land for the following reasons: - 

    • ​​​​Approval of the development involved with rezone land use which causes the increase of the value of the land. 

    • There is an excessive floor from the ratio plot that is stated in the development plan. ​

    • There is an excessive units above the residential average density that is stated in the order of development.

  2. The purpose of the development charge is to cover the cost of the provision of providing and improving infrastructure and facilities in the area as a result of the approval of the given planning. Shah Alam City Council has adopted the 2010 Development Charges on 25 November 2010. 

  3. Methods of 2010 Development Charges were gazette by the Selangor State Government via Gazette No. Sel.PU36 on 25 November 2010.​

Act / Enactment / By-Laws (UUK)

Town and Country Planning Act 1976 Under the 2010 Development Charges Methods. Methods of 2010 Development Charges were gazetted by the Selangor State Government via Gazette No. Sel.PU36 on 25 November 2010.


How To Apply

Application in determining the rate of development charges is based on the direction of the Planning Department.

Assessment Method

  1. Each case obtained must be determined when the RT Gazette Plan approved and when KM was sent to the Planning Department.

  2. In all MBSA cases, everything is based on the 2020 MBSA RT changes that were gazetted in 2010 and 2020 (P1) MBSA RT in 2012. 

  3. The Property Market Value determination is based on land usage. For the purpose of this meaning, sell-and-purchase proofs will be obtained from per-comparison property and on the last date of the sale-and-purchase transaction’s date.  

  4. Proofs of sale-and-purchase will be obtained from the help of the Department of Selangor State Property Evaluation Service (Selangor JPPH) and other sources.​

Evaluation is made based on the Land Usage Change.

These changes are caused by land usage changes in which its status has been changed from agricultural land to industrial land or residential or trade. In addition, this change has caused the increase of the market value of the land. 

Example 1

Land Usage Changes from agricultural land to residence:

ASSESSMENT REPORT FOR THE PURPOSE OF DETERMINING THE DEVELOPMENT CHARGE, Lot 7710, Jalan Subang Permai U6 / 3, Taman Subang Permai, Section U6, SHAH ALAM

​​​OWNER

​:​​

​​X

CONSULTANT

​:

​Y

LAND STATUS

​:

FRUIT PLANTATION

OWNERSHIP STATUS 

​:

​99 YEAR LEASE

LAND AREA

​:

​21,780s.f (0.5 ACRE)

PROPOSAL

​:

 BUILDING 4 UNITS OF CLUSTER HOUSE

The change of land usage from agricultural land to residential land.

Agricultural land value per acre is RM 522,720.OO (RM 12 psf)

Commercial land value per acre is RM 1,089,000.00 (RM 25 psf)

(Evidence of the sale and purchase of Property Valuation and purchase Information via the MBSA PROGRAM (Form I)

​Land size 0.5 acres @ RM 522, 720.00/acre-RM261, 500.00 closing (the value of the agriculture category)(Proofs of the sale and purchase from the Department of Selangor State Property Evaluation Service and sale and purchase information through MBSA JPPH (I Form)

Land area of 0.5 acres @ RM 522,720.00 / acre - RM 261,360.00 (Agricultural Category Value)

Land area of 0.5 acres @ RM 1,089,000. 00 / acre - RM 544,500.00 (Residential Value)  

​​Development charge rate 

​=

​RM​​ 544,500.00 - RM 261,360.00

​=

​​RM 283,140.00 @ 30%​​​

​​=

​​RM 84,942.00​

TOTAL DEVELOPMENT CHARGE IS​​ RM 8​​4,942.00​​​​​​​​

Example 2.

Increase of plot ratio:

ASSESSMENT REPORT FOR THE PURPOSE OF DETERMINING THE DEVELOPMENT CHARGE, LOT NP. 4, Precinct 3.3, PERSIARAN PERBANDARAN, SECTION 14, 40000 Shah Alam

LOCATION ​​

​:​​

LOT NO. 4, PRECINCT 3.3, PERSIARAN PERBANDARAN, SECTION 14, 40000 SHAH ALAM

OWNER

​:

​Y

PROPOSAL

​:

17 LEVELS COMPLEX SETUP 11 LEVEL SOHO 1 PARKING BAY / HALL / BUSINESS SPACE)

SITE AREA

​:

0.928 ACRES (40,423.37 SF)

​​THE PLOT RATIO INCREASES FROM 3.3 TO 3.95 (WITH THE APPROVAL FLOOR 12,393.1434 SM TO 14,868.65 SM) 

THE DIFFERENCE OF APPROVED FLOOR 14,868.65 SM  - 12,393.143 SM = 2,475.507 SM​

​​​

Calculation of development charge.

Difference (ratio plot)

Floor area

=

​14,868.65 SM - 12,393.143 SM

​​

​=

​2,475.507 SM​ (26,646.10 ​sf)

Total of floor area

=

​26,646.10 sf

26,646.10 sq. @ RM 40.00 / psf (difference in value - RM 110 psf - RM 70 psf) = RM 1,065,800.00

30% Development Charge from RM 1,065,800.00 = RM 319,740.00​

​​​​TOTAL DEVELOPMENT CHARGE IS​ RM 3​19,740.00​​​​​

Note: * / ** Proof of sale and purchase were obtained from sources; Selangor JPPH, MBSA JPPH, the Land Office / Ownership Registration Office.

Conditions

​​Early information that is needed to determine the Development Charge is as follow:

  1. The planning permission policy approval 

  2. A copy of the land ownership. 

  3. The development layout plan. 

  4. The local plan that was gazetted. For example 2020 MBSA RT and (P1) 2020 MBSA RT.

  5. Copy of project proposal as a reference to determine the proposed selling price and development costs that are involved. 

  6. Copy of land premium payment.

  7. Evaluation report from the developer if they have made a report to determine the market value of the property. 

Payment Period

Refer to the method of the Development Charges 2010.​

​Contact

Majlis Bandaraya Shah Aalm,
​Department of Valuation and Property Management,
Lif B,​ Level 2, Wisma MBSA, Persiaran Perbandaran,
40000 Shah Alam, Selangor.

​No. Tel​​​:​​03 - 5522 2769/ 2754/ 2753/ 2751
​No. Fax​:​​​03 - 5513 8511
​Email​:penilaian@mbsa.gov.my​​​