Unpacking Singapore’s leasehold relativity table: An empirical and legal analysis

In Singapore, most land is state-owned, with the state generally issuing leasehold estates via state leases of not more than 99 years1, depending on the intended land use. Naturally, the value of a leasehold estate, which erodes over time as the lease approaches the end of its term, is a key component of the premium charged for lease renewals, or the tax imposed for permission given in relation to a development that would increase the value of the land. By law, the state valuation of leasehold land is prescribed by a leasehold relativity table colloquially known as ‘Bala’s Curve’ or ‘Bala’s Table’. Since its adoption in 1948, however, the underlying assumptions and discount rate inherent to the curve have not been disclosed. This paper aims to deconstruct or reverse engineer Bala’s Table to derive the best fit model of the curve. Doing so allows policymakers to evaluate whether the model parameters align with prevailing economic realities, and if not, modify them to reflect the market and more accurately value leasehold estates for calculating taxes and premiums.