Tutorial 3-Development Charge

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Tutorial Development Charge

1. Suppose a piece of land with an area of 20000 square feet located in a major
commercial area will be developed by erecting a 25 -storey office building. The Local
Planning Authority has set the plot ratio for the area to be 1: 6. The plinth area is 75
percent. If there is excess floor, calculate the development charge to be paid, if the
development charge rate is RM8 per square foot.

2. A property developer company has applied to develop a 15 -storey business complex


with a floor area of 300,000 square feet. One of the conditions for obtaining approval
for the development of the complex is that the developer is required to provide
adequate parking according to the standard of one plot for every 2000 square feet.
Developers can be fined in the form of a development charge of RM25,000 by the
Local Authority if they fail to provide. However, the developer can only provide 100
parking units. How much development charge should be paid?
based on the above question calculate the development charge if
i. The floor area of the business complex is 400,000 square feet.
ii. The developer provide 250 parking units.

Answer for Tutorial

1.
Plinth area Percentage of plinth Total building site
area area

20,000 sq ft 75% 15000 sq ft

Plot ratio
area Plot ratio total
20,000 sq ft 6 120,000 sq ft

Maximum permissible
floor

120,000 sq ft/15 000 8 floor


sq ft

Proposed 25 floor
development :

25 x 15,000 sq ft 375,000 sq ft

Permissible floor area (minus)120,000 sq ft

=255,000 sq ft

Dev charge: 255,000 sq ft X RM 2,040,000


rm8.00
2.
Total car park need to 300,000 sqft/2000 sq 150 car parks
be provide ft

Dev car park 100 car parks 150 c.p – 100 c.p
=50 c.p
=50 c.p X RM25,000
=RM 1.25 milllion

B i) 400,000 sq ft /2000 sq 200c.p


ft

Dev c.p 100 c.p 200 c.p – 100 c.p=100


c.p
=100 c.p X RM 25000
= RM2.5 million

B ii) 300,000 sqft/2000 sq 150 car parks


ft

Dev car park 250 car parks

= developer are waive


from development
charge

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