REDAS urged the government to review the additional buyer’s stamp duty (ABSD) policy to avoid the ‘land grab’ situation seen in 2017 and 2018. Last year, the government raised the ABSD payable by developers from 15 percent to 30 percent, of which five percent is non-remittable.
Real Estate Developers’ Association of Singapore (REDAS) president Chia Ngiang Hong has urged the government to review the additional buyer’s stamp duty (ABSD) policy to avoid the ‘land grab’ situation seen in 2017 and 2018, reported Channel NewsAsia.
In a surprise move in July, the government raised the ABSD payable by developers from 15 percent to 30 percent, of which five percent is non-remittable. The time frame to sell out the project was also capped at five years.
Speaking at a REDAS Chinese New Year event, Chia noted that the ABSD “has pushed all developers to exhaust their inventory at around the same time, and could partly account for the land price escalation in 2017 and 2018 because everyone basically ran out of inventory at the same time”.
And while excessive land-banking should be discouraged, he believes that some flexibility in the time-frame within which to sell the project should be provided.
“If the ABSD is not reviewed, we can expect a repeat of the 2017 to 2018 ‘land grab’ situation in four to five years’ time. When the price of the raw material goes up, we can expect the price of the end product to increase as well,” he noted.
Chia also called for a review of the loan-to-value limits for first-time property buyers as well as the upfront payment of ABSD for HDB owners looking to upgrade to a private home.
“I strongly believe that it is the intention of the government to assist to fulfil the aspirations of many young Singaporeans to own a private home. Hence, it may be timely to review and tweak some existing policies and measures to help Singaporeans, particularly first-timers, to achieve their objective,” he said.
Romesh Navaratnarajah, Senior Editor at PropertyGuru, edited this story. To contact him about this or other stories, email email@example.com