A Primer in Understanding B1 and B2 Industrial Properties in Singapore
When exploring industrial properties in Singapore, it’s essential to understand the distinctions between B1 and B2 industrial spaces and their permissible uses. Additionally, regulations surrounding property ownership and usage for PRs and foreigners can significantly influence investment decisions. This guide aims to clarify these aspects, ensuring you make informed choices for your business needs.
Differences Between B1 and B2 Industrial Properties
B1 Industrial
- Intended Uses: Light and clean industries such as electronics, precision engineering, and media.
- Allowable Activities: Light manufacturing, software development, printing.
- Environmental Impact: Should not generate significant pollution or pose safety hazards.
- Buffer Zone: NEA generally requires a 50m nuisance buffer from a B1 zone to the surrounding area.
B2 Industrial
- Intended Uses: Heavier industries that may produce higher levels of noise, pollution, or other environmental impacts.
- Allowable Activities: Manufacturing, logistics, warehousing.
- Buffer Zone: NEA requires a 100m nuisance buffer from a B2 zone to the surrounding area.
Allowable Uses for B1 and B2 Industrial Properties
Understanding the permissible activities for each category is crucial:
- Clean Industries (B1): Software design, IT services, electronics.
- Light Industries (B1): Fashion design, media, light manufacturing.
- General Industries (B2): Car servicing, metal stamping, welding, manufacturing.
- Special Industries (B2): Food factories, chemical manufacturing, waste management facilities.
- Warehousing (B2): Storage and distribution centers.
- Public Utilities (B2): Power stations, water treatment plants, waste management facilities.
- Telecommunication Uses (B2): Data centers, telecommunication towers.
- Other Public Installations (B2): Research labs, transport depots.
Common Questions About B1 and B2 Industrial Properties
Can B1 Industrial Be Used for an Office?
Yes, B1 industrial properties can accommodate office spaces, but with restrictions. The office must be ancillary to the primary industrial activity and occupy no more than 40% of the total floor area to ensure the primary use remains industrial.
Can B2 Industrial Be Used for Childcare?
No, B2 industrial properties are not suitable for childcare centers due to the need for a safe and clean environment, which aligns more closely with B1 industrial spaces or commercial/residential areas.
Ownership and Investment Regulations
Can PRs Buy Industrial Property in Singapore?
Yes, Permanent Residents (PRs) can buy industrial property with no significant restrictions, making it a viable option for business operations or investment.
Can Foreigners Own Industrial Property in Singapore?
Yes, foreigners can own industrial properties without significant restrictions, making it attractive for international investors.
Financing and Taxation for Industrial Properties
Can I Use CPF for Industrial Property?
No, CPF savings cannot be used to purchase industrial properties. CPF funds are primarily for housing, healthcare, and retirement needs.
Do I Need to Pay ABSD for Industrial Property?
No, Additional Buyer’s Stamp Duty (ABSD) does not apply to industrial properties. Only Buyers’ Stamp Duty (BSD) is payable upon purchasing industrial properties.
Do I Need to Pay SSD for Industrial Property?
Yes, Seller’s Stamp Duty (SSD) is payable for industrial properties sold within a specific holding period to curb speculative flipping. The SSD rates are:
| Holding Period | SSD Rate |
|---|---|
| Up to 1 year | 15% of the sale price or market value, whichever is higher |
| More than 1 year and up to 2 years | 10% of the sale price or market value, whichever is higher |
| More than 2 years and up to 3 years | 5% of the sale price or market value, whichever is higher |
| More than 3 years | No SSD payable |
Land Betterment Charge (LBC) and Its Impact
The Land Betterment Charge (LBC) has replaced the Development Charge (DC) and applies based on geographical sectors and use groups. LBC is calculated based on the increase in land value from a proposed development and is payable upon approval.
How LBC Rates Affect B1 and B2 Properties
- Redevelopment Costs: Higher LBC rates may apply when converting from lower-value industrial use to higher-value use.
- Zoning and Use Compliance: Ensures changes in use or intensity align with URA guidelines and contribute to planned urban development.
JTC Rules for Industrial Land
For properties on JTC (Jurong Town Corporation) industrial land, specific JTC rules apply:
JTC Anchor Tenant
- Requirements: Significant operations and investments in their industrial space.
- Occupancy: Must occupy at least 70% of the Gross Floor Area (GFA). If more than one anchor tenant, each must occupy at least 1,000 sqm.
- Assessment Criteria: Productivity of the space, creation of quality jobs, and value-add to the economy.
Subletting Regulations
- Approval: Required from JTC for any subletting arrangements.
- Occupancy: Anchor tenant must retain a substantial portion of the premises.
- Adjustments: Changes in GFA by more than 20% or usage changes require re-application to JTC.
JTC Third-Party Build and Lease (B&L) Scheme
This scheme allows an industrialist to appoint a third-party facility provider to develop a facility customized to their needs. The industrialist leases the facility from the provider, occupying at least 70% of the GFA.
JTC Sale and Leaseback (S&LB) Scheme
Under this scheme, an industrialist sells a completed facility to a third-party facility provider and leases it back. The industrialist must occupy at least 70% of the GFA.
Subletting for JTC Lessees and Tenants
JTC Lessees
- Full Occupation: Must fully utilize 100% of their GFA.
- Temporary Subletting: Allowed for up to 30% of GFA during lull business periods, subject to JTC approval.
Subletting to Related Businesses
- Exemptions: Not counted within the 30% GFA limit if used by related businesses (defined as owning more than 50% of each other’s shareholding).
JTC Tenants
- Restrictions: Subletting in high-rise developments or workshops is not permitted unless to related businesses.
For detailed subletting policies, refer to JTC’s guidelines.
Conclusion
Understanding the intricacies of B1 and B2 industrial properties and the regulations surrounding property ownership is crucial for making informed investment decisions in Singapore. Whether you’re considering industrial spaces for your business or exploring industrial property investments, staying informed about these regulations ensures a smooth and compliant process.
OfficeFactoryFinder.com is your trusted partner in navigating the industrial property landscape in Singapore. Contact us today for expert guidance and the best property options to suit your business needs.
