Expanded tax scheme to benefit more construction facilities here from next year

A scheme that gives tax allowances for the building of construction facilities that ensure efficient use of land – such as prefabrication hubs – will be expanded to cover more types of developments.

- Isabelle Liew

The enhanced Land Intensification Allowance scheme, which will take effect on Jan 1, 2026, will include multi-storey design for manufacturing and assembly facilities to further optimise land use, National Development Minister Desmond Lee announced on April 9.

Design for manufacturing and assembly is a way of prefabricating structures in an off-site facility before assembling them on-site in a Lego-like manner, saving time and manpower. This method is used in the construction of Housing Board flats.

Such facilities can be those for fitting prefabricated parts, storing precast components or producing other parts, such as mass-engineered timber and prefabricated mechanical, electrical and plumbing systems, Mr Lee said.

They cover a wider range of activities compared with integrated construction and prefabrication hubs, which focus on mainly prefabrication and are currently the only type of facility in the construction sector eligible for the scheme. Other sectors that qualify for it are manufacturing and logistics.

Under the initiative, companies will first receive a tax allowance of 25 per cent of their eligible construction costs, such as design and feasibility study fees. After that, they will receive 5 per cent each year until the total allowance reaches 100 per cent.