SINGAPORE: The government has imposed an Additional
Buyer's Stamp Duty (ABSD) for private property of between 3 per
cent and 10 per cent for Singaporeans, Permanent Residents and
foreigners to moderate investment demand for private residential
property and promote a more stable and sustainable market.
The changes take effect on December 8.
Foreigners will pay 10 per cent Additional Buyer's Stamp Duty
(ABSD) for any residential property.
Permanent Residents owning one and buying second and subsequent
properties will pay 3 per cent ABSD.
Singaporeans owning two and buying a third and subsequent
residential properties will pay 3 per cent Additional Buyer's Stamp
Duty.
The ABSD will be imposed over and above the current Buyer's Stamp
Duty, which are 1 per cent on the first $180,000 of purchase
consideration or market value of the property (whichever is
higher), 2 per cent on the next $180,000 and 3 per cent for the
remainder.
In a joint statement on Wednesday, the Finance and National
Development ministries say the government's objective is to promote
a sustainable residential property market where prices move in line
with economic fundamentals.
They said prices of private residential properties have continued
to rise, albeit more slowly in the last two quarters.
Prices are now 13 per cent above the peak in the second quarter of
1996, and 16 per cent above the more recent peak in the second
quarter of 2008.
They said that even with the current economic uncertainties, the
demand for private residential property remains firm.
Given the uncertainty in stock markets and with interest rates
remaining low, private property in Singapore continues to attract
local and foreign investors.
They added that excessive investment demand will make the property
cycle more volatile, and thus increase the risks to Singapore's
economy and banking system.
The government said the higher ABSD rate for foreign buyers in
particular is necessary, in view of the large pool of external
liquidity and strong buying interest from abroad, and the
relatively small size of the Singapore market.
The government said foreign purchases account for 19 per cent of
all private residential property purchases in the second half of
2011, up from 7 per cent in the first half of 2009.
For purchases made jointly by two or more parties (eg a Singaporean
with a PR, or a PR with a foreigner), the higher applicable ABSD
rate will be imposed.
For example, if a citizen purchases a property with a foreigner,
the ABSD of 10 per cent will apply.
In the case of a joint purchase by Singaporeans, who each already
owns properties, the ABSD of 3 per cent will apply as long as one
of the purchasers already owns two properties.
Deputy Prime Minister and Minister for Finance Tharman
Shanmugaratnam, said: "We have always had open markets and must
keep them that way. However, the reality is that investment flows
into our property market are now larger than before, and unlikely
to recede as long as interest rates remain low.
"The additional buyer's stamp duty should help cool investment
demand, and avoid the prospect of a major, destabilising correction
further down the road."
Nicholas Mak, Executive Director of Research and Consultancy at SLP
International, said: "It will curb investment demand for private
residential properties quite drastically, especially demand from
non-resident foreigners. And I think in the next one to two months
or so, demand from non-resident foreigners will almost
dry-up."
Home buyers are mixed in their views.
One Indian foreigner said: "I know there is a stamp duty, but any
increase in that will probably take it out of my level where I want
to buy."
An Indian who is a Permanent Resident said: "Nowadays, HDB
properties are also difficult to buy, because of more conditions.
So they have to buy property here. Definitely they'll keep buying
more irrespective of whether the stamp duty is increased or
not."
One Singaporean said: "It probably wouldn't have an effect in the
short-term, because the property market prices are still rising,
people are still speculating."
Minister for National Development Khaw Boon Wan said: "We are
ramping up the supply of new Executive Condominium units through
the Government Land Sales Programme.
"This will help higher-income Singaporeans own private condominium
units in an affordable way, as the sale of new EC units is
restricted to Singaporean households only."
Singaporean first-time buyers and upgraders, and buyers of HDB
flats will not be affected by the new measure.
Certain reliefs will be provided so that the measure will not
impact home occupation demand by residents.
For example, relief will be provided for Singaporean-foreigner/PR
married couples buying their homes.
Reliefs will also be provided for qualifying developers and for
purchases falling within the scope of Singapore's international
trade agreements.
The government will continue to ensure an adequate supply of
private housing to meet-medium term demand.
There are 41,000 unsold private housing units in the
pipeline.
The government will inject sites that can potentially yield a total
of 14,100 units in the 1H2012 Government Land Sales (GLS)
Programme, similar to the supply in previous GLS programmes.
Of these, about 7,000 units will be from sites on the Confirmed
List.
These numbers take into account the ample pipeline supply and the
dampening effect of the ABSD.
The government will also expand the supply of executive
condominiums (ECs) in 2012 and is prepared to release sites that
can potentially yield 5,000 EC units for the entire year.
Sites for 3,500 EC units will be made available in 1H2012,
including 3,000 EC units on the Confirmed List.
The Confirmed List quantum is comparable to the 3,000 EC units from
five sites sold for the whole of 2011. More details will be
provided in the press release for the 1H2012 GLS Programme on MND's
website.
The Government will continue to monitor the property market and
adjust its property policies in step with changes in the market and
the economy.
- CNA/de
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more money for the coffers.