A Malaysian royal’s plan to sell a tract of land in the heart of Singapore faces a complication: a tax bill that may exceed US$1 billion.
A levy known as a land betterment charge has emerged as a sticking point in negotiations between some prospective buyers and the current owner, the eldest son of Malaysia’s billionaire king, according to people familiar with the matter. The owner wants any buyer to foot the bill, the people said, asking not to be identified because the information is private.
The tax, imposed when the government gives planning permission or other approvals that increase the value of land, may run north of S$2 billion (US$1.6 billion), according to estimates by three local property analysts.
It is a potential stumbling block for what may be one of Singapore’s biggest-ever real estate deals. Tunku Ismail Ibrahim, son of Sultan Ibrahim Iskandar, is seeking to sell 16.6 hectares (41 acres) of land, including a plot he obtained in a 2025 land swap with the city state’s government that would enable any properties being built on his land to be further away from the Botanic Gardens, a Unesco World Heritage site.
In March, Singapore’s Urban Redevelopment Authority said Ismail had applied to develop the land for residential use, and the agency was proposing rezoning it to allow for development of mansions known as good class bungalows and low-rise housing.
A representative for Ismail, the crown prince and regent of Malaysia’s southernmost state of Johor, declined to comment. The Singapore Land Authority, which administers the tax, said it does not comment on market speculation concerning landowners’ intentions or potential private transactions.
The tax would be payable by the land’s owner at the time its development is approved, although owners can nominate one or more other parties to pay. The timing of any government approval for development is unclear.