The Income Tax (Land Intensification Allowance) (Amendment) Regulations 2025, gazetted on 12 December 2025, formally update the LIA framework with effect for planning permission applications submitted on or after 1 January 2026.
Core Amendments:
The revisions modify two critical components: the list of prescribed trades or businesses eligible for the allowance, and the gross plot ratio (GPR) benchmarks assigned to each prescribed sector. The LIA is a capital allowance incentive designed to encourage the intensive industrial use of land by providing tax deductions for qualifying capital expenditure on buildings or structures.
Practical Impact:
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Eligibility Review: Companies in industrial or logistics operations must immediately verify if their trade remains prescribed under the updated list. Businesses considering new projects must use the revised list for eligibility assessment.
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Benchmark Scrutiny: The updated GPR benchmarks are the pivotal determinant for the allowance quantum. For any new project, the qualifying expenditure is apportioned based on the extent the achieved GPR meets or exceeds the new sector-specific benchmark. Accurate calculation and documentation of the GPR at the project planning stage are now essential for tax compliance and optimisation.
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Application Timing: The changes apply strictly to applications for planning permission or conservation permission made from 1 January 2026 onwards. Projects with permissions granted prior to this date will be assessed under the previous regulations, creating a dual regime that requires careful tracking.
These amendments refine a targeted fiscal policy tool. Affected businesses and their advisors must incorporate the new prescribed list and benchmarks into feasibility studies and tax planning for all new industrial development projects initiated from 2026.
Source: IRAS, 15 December 2025