Cut-off Lease Duration to Distinguish Between Revenues under Sales of Land
03 Apr 2017Parliamentary Question by Ms Sylvia Lim:
To ask the Minister for Finance in respect of the revenue earned from leases of Government land, what is the cut-off lease duration (in months or years) that is used to distinguish between revenue that is classified as operating revenue and revenue that is classified as a capital receipt under Sales of Land.
Parliamentary Reply by Minister for Finance Mr Heng Swee Keat:
Under the Protection of Reserves Framework in the Constitution, revenue from the disposal of State land is protected as part of Singapore’s Past Reserves and not available to the Government for spending as operating revenue. State land is deemed to be disposed of when the Government issues freehold titles, or issues leasehold titles for a total period of ten years or more.
Our approach of protecting State land, and revenue from land sales, as Past Reserves is fiscally prudent and responsible. It ensures that all budgeting and spending decisions by the government are based on sustainable, regular revenue sources, including the Net Investment Returns Contribution (NIRC) from our Past Reserves. In this way, we guard against the possibility of a government attempting to sell land quickly, especially when there is a property boom, just to raise immediate revenues to spend more.