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The government has implemented additional cooling measures intended to curb excessive investment in the property market.
From today, foreigners and corporate entities will have to pay an additional 10 percent ‘Additional Buyers Stamp Duty’ (ABSD) , the government said in a statement issued last night. The extra levy will be three percent for Permanent Residents (PRs) purchasing a second home, as well as for Singaporeans buying their third residential property.
In a joint statement, the Finance and National Development ministries said the move is to promote a sustainable residential property market where prices move in line with economic fundamentals.
“We have always had open markets and must keep them that way,” said Finance Minister Tharman Shanmugaratnam. “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 stamp duty should help cool investment demand, and avoid the prospect of a major, destabilising correction further down the road.”
The ABSD will apply in addition to the existing buyer's stamp duty on property purchases, which will be applied at the following rates: one percent on first S$180,000 of purchase consideration or market value of the property (whichever is higher), two percent on the next S$180,000 and three percent for the remainder.
In the case of a joint purchase by Singaporeans who each already owns property, the ABSD of three percent will apply as long as one of the purchasers already owns two properties. Singaporean first-time buyers and upgraders, and buyers of HDB flats will not be affected by the new measure.
The Real Estate Developers Association of Singapore (REDAS) said it was disappointed at the lack of consultation, adding that the measures came as a surprise as the current market outlook is uncertain.
Colin Tan, Head of Research at Chesterton Suntec International, writing in TODAY, said: “Already people are asking me whether the new measures will induce a price correction? It really depends on the reaction of developers and how much of the current purchases are investment buys. If the majority of buyers have been investors, the measures have the equivalent effect of a sudden price increase of 3 percent or more on the market.”
Andrew Batt, Regional Group Editor of PropertyGuru, said the latest round of cooling measures which were introduced earlier this year had an immediate impact, and market watchers and analysts will be paying careful attention to the market over the coming days and weeks.
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Reader Comments: (10 comments)
Dear Born and bred in Singapore, I empathise with your situation. To Chen Lee Ting, please enjoy your terrace in Johor and the wonderfully safe environment and policies over there.
Philip, the door is open, you can try the unstable policies of other countries or US and Europe real estate. Good Luck!
Australia has 'foreigners can only sell to Aussies' policy. Some practise 'bumis first, non-b second and foreigners last class?' policy. You have a choice of countries where gov policies change at whim and fancy.
Foreigners are free to buy property elsewhere. Remember the risks/unsafe environment/unstable gov policies in some of the other countries.
Now the developers are giving good doiscount to offset the 10% increase, so you decide, who benefits the most.
John, more than 80% of the house owners are Singpaoreans. You do have a choice.
Consider the economic situation now I don't think there is need to have such drastic cooling measures. Despite the low interest rate property bubble in shanghai has skidded some 30% in some places. The measures will overshoot the desired cooling effect
let's not cloud the issues guy. we now leave in a global village and it's passe to harp on a singaporean-owned singapore. pure greed and insensitivity are what's at play here.
Well let our govt top up the reserve and look into our problem. Who does the increase benefits. Some are in their own country and renting out the whole unit, it is good money when they convert to their currency.
If you ever needed a sign or a bell to ring that the property market in singapore has reached the top. Well this is it. This is one foreigner exiting this market, it is going to tank. Anyone know where to buy CDS,s on Singapore?