Local government plays a major role in property development in Malaysia. Local government in Malaysia is enacted under the Local Government Act 1976 to provide public facilities and amenities to local people as well as to control property development at the state level. At the current practice, development charges have been imposed on property project carried out in accordance with the provisions of Section 32 of the Town and Country Planning Act 1976 (Act 172). The main purpose of the development charges is to provide and improve infrastructures, public facilities, and amenities as well as the wellbeing of the development areas. The charges would be levied to developers once the project approved specifically for the conversion of land use, the increment of plot ratios and density, which would increase the land value. The purpose of this research is to identify the issues and challenges in the imposition of development charges to improvise the current methods practiced. This exploratory research aims to come out with the best practices on development charge. A qualitative semi-structured technique will be used that focus on six (6) states in Malaysia which consists of 26 local governments that are currently implementing the development charges. All the primary data were gathered from respondents will be analyzed by using content analysis through interview session. There were four (4) main issues reveals from this research whereby lack of awareness among developers top the chart. Meanwhile, amongst the challenges faced by the local government pertaining to the development charges implementation are to strengthen the implementation procedures of development charges as well as and to increase the understanding of the importance of development charges. The findings, therefore, will come out with full understanding towards the practice of development charges in Malaysia among government sector, developers and other relevant parties.

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The conversion of land, increment of plot ratios or density that increases the land value often comes with a development charge. While the local governments view the development charge as one of their income sources for providing utilities to the society, property developers’ communities still contend that the charge surges development uncertainty. Moreover, the existing empirical studies of the implementation of development charges in Malaysia are limited since lack of developers’ views regarding this matter. Through semi structured interviews among the property developers, this paper had explored the property developers’ perspectives on the implementation of development charges in Malaysia. Data from the interviews were analysed using content analysis techniques. Findings from the analysis revealed that the effect it has on property developers seems to have increased the developers’ uncertainties, especially on the cost of property development. This paper provides new insights for future research in the study of relevant approaches to improve the efficiency of the development charge and the effect it has on the developer’s uncertainty.

While the local governments view the development charge as one of their income sources for providing utilities to the society, property developers’ communities still contend that the charge surges development uncertainty. Moreover, the existing empirical studies of the implementation of development charge in Malaysia is limited by a lack of developer’s view regarding this matter. This further inhibits the aim to gauge the property developers’ perspectives regarding the implementation of development charge in Malaysia. An online exploratory questionnaire was conducted to gather information from the respondents, which included 10 house developers from all over Malaysia by using purposive sampling technique. The findings revealed that the effect it has to property developers seems to have increased developer's uncertainties, especially on the cost of property development. Moreover, the contentious issue concerning how development charge affects the availability and affordability of housing, surround the use of development charge due to the developers pass the burden by increasing the house price. This paper provides new insights for future research in the study of relevant approaches to improve the efficiency of the development charge and the effect it has on the developer's uncertainty.