Additional Buyer's Stamp Duty for a Stable and Sustainable Property Market | ||||||||||||||||||||||||||||||||||||||||
07 Dec 2011 07:40 PM | ||||||||||||||||||||||||||||||||||||||||
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1)The Government announced today an Additional Buyer’s Stamp Duty (ABSD) to be imposed on certain categories of residential property purchases. The ABSD will be imposed over and above the current Buyer’s Stamp Duty, and will apply to the purchase price or market value of the property (whichever is higher) for the following purchases: a) Foreigners and non-individuals[1] (corporate entities) buying any residential property will pay an ABSD of 10%; b) Permanent Residents (PRs) owning one[2] and buying the second and subsequent residential property will pay an ABSD of 3%; and c) Singapore Citizens (Singaporeans) owning two2 and buying the third and subsequent residential property will pay an ABSD of 3%. The ABSD will take effect on 8 Dec 2011[3]. Remission of ABSD will be given for options granted on or before 7 Dec 2011 and exercised within 3 weeks (i.e. on or before 28 Dec 2011) or the option validity period, whichever is the earlier. 2 The Government's objective is to promote a sustainable residential property market where prices move in line with economic fundamentals. Prices of private residential properties have continued to rise, albeit more slowly in the last two quarters. Prices are now 13% above the peak in 2Q1996 and 16% above the more recent peak in 2Q2008. 3 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 investors, local and foreign. Excessive investment demand will however make the property cycle more volatile, and thus increase the risks to our economy and banking system. 4 The Government has therefore decided to impose the ABSD to moderate investment demand for private residential property and promote a more stable and sustainable market. A 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. Foreign purchases account for 19% of all private residential property purchases in 2H2011, up from 7% in 1H2009. 5 The ABSD will apply in addition to the existing Buyer’s Stamp Duty on property purchases, which are applied at following rates: 1% on first $180,000 of purchase consideration or market value of the property (whichever is higher), 2% on the next $180,000 and 3% for the remainder. 6 For purchases made jointly by two or more parties (e.g. 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% will apply. In the case of a joint purchase by Singaporeans, who each already owns properties, the ABSD of 3% will apply as long as one of the purchasers already owns two properties. 7 Singaporean first time buyers and upgraders, and buyers of HDB flats[4] 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. More details will be provided on the IRAS website. Adequate Supply of Private Housing to Meet Demand 8 The Government will also 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. 9 To give more Singaporean households the chance to own or upgrade to private housing, the Government raised the monthly income ceiling for the purchase of new Executive Condominiums (ECs) from $10,000 to $12,000 in Aug 2011. We will expand the EC supply in 2012 and are 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 5 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. 10 The Government will continue to monitor the property market and adjust our property policies in step with changes in the market and the economy. Mr Tharman Shanmugaratnam, Deputy Prime Minister and Minister for Finance, 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.” 11 Khaw Boon Wan, Minister for National Development, said, “We are ramping up the supply of new EC 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.” Issued by the Ministry of Finance & Ministry of National Development 7 Dec 2011 ANNEX 1 Existing and Additional BSD Rates
Examples of Additional and Total Buyer’s Stamp Duty Payable Assume property purchase of $1 million
[2] A person is regarded as owning a property for the purpose of ABSD as long as he owns part of that property. Overseas properties will be excluded from the count of properties owned. [3] The measure will apply to a property purchase if the option for purchase is exercised or the agreement for transfer is executed, whichever is earlier, on or after 8 Dec 2011. Where no option for purchase is granted and only an agreement for transfer is executed, then the measure will apply to the agreement for transfer if it is executed on or after 8 Dec 2011. [4] The purchase of HDB properties will not be affected by this measure. Only Singaporeans and Permanent Residents are eligible to be HDB flat lessees (i.e. own a flat). Existing residential property owners who buy an HDB flat or a new unit under the Design, Build and Sell Scheme (DBSS) or the Executive Condominium (EC) Housing Scheme will not be subject to the ABSD, since the existing flat/property will have to be disposed of as part of the conditions for the purchase of the HDB/DBSS flat or EC unit. | ||||||||||||||||||||||||||||||||||||||||
Thursday, December 8, 2011
Additional Buyer's Stamp Duty- New Measures on 8 Dec 2011
Saturday, November 19, 2011
Building of North-South Expressway may hurt property prices
| Building of North-South Expressway may hurt property prices | ||
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| Property prices and rents of properties along the North-South Expressway's construction route could take a hit during the construction phase. According to The Straits Times, noise, dust polllution and traffic diversion may affect homes and properties and cause property values to drop by three to five per cent. This is due to prospective buyers steering clear of the properties. The impact will depend on the property's location and whether the nearby portion of the expressway is above or below ground. Other real estate projects may also face danger. The Straits Times reported today that the construction could affect an attempt by Novena Ville owners to mount a collective sale. Industry watchers told the English daily that developers are wary of buying this type of site as they do not like to launch a new project amidst construction chaos or lower prices. City Developments' (CDL) Cube 8 and 368 Thomson projects will also lose land from their total land areas. Real estate watchers who spoke to The Straits Times said owners who wished to sell their properties should adjust their pricing expectations as the inconvenience caused by the building works would need to be factored into the selling price. Rents could also be hit if potential tenants shy away from homes located close to construction sites. |
Wednesday, August 24, 2011
Market Updates (23 Aug 2011)
Market Updates (23 Aug 2011)
Some property sites pack them in, some leave more breathing space
Five projects on sites sold under the 2006-2010 state land sales programmes will yield at least 50 % more units than the state's estimates for these sites indicated in the respective Government Land Sale (GLS) Programmes, shows a study by Savills Singapore.At the other end of the spectrum, there are sites whose developers are building fewer units than the numbers indicated in the GLS Programme, including two projects from Hong Kong tycoon Li Ka-shing's Cheung Kong Holdings - The Vision in the West Coast area and Thomson Grand at Upper Thomson Road.
Two Far East Organization projects will also yield fewer units than the estimate in the GLS Programme - Mi Casa condo at Choa Chu Kang Drive and the recently released Boathouse Residences at Upper Serangoon View. The latter is a joint venture with Frasers Centrepoint and Sekisui House. Far East has stronger representation in the list of projects that will yield more units than estimated in the GLS Programme - with projects such as The Tennery in Bukit Panjang, The Greenwich in Seletar, Woodhaven in Woodlands and euHabitat at Jalan Eunos. All four projects have substantial proportion of total units between 500 sq ft and 800 sq ft, in some cases in what is dubbed SoHo-style one-bedders. In June and July this year, the property giant unveiled two condo projects, Woodhaven and euHabitat, which not only have SoHo-style apartments and normal condo units but also incorporated strata townhouses. 'These different housing options . . . cater to the varying needs of home buyers,' Mr Chia said. Market watchers note that foreigners (including Singapore permanent residents) may purchase strata landed homes within developments with condominium status without seeking approval from the Land Dealings (Approval) Unit. Said Mr Chia: 'Our townhouses at Woodhaven and euHabitat have seen demand from both Singapore permanent residents and foreigners.'
- The Business Times, P4
West Coast development put up for collective sale
Hong Leong Garden Shopping Centre, a 138-unit development at West Coast Way, has been put up for collective sale. Marketing agent Credo Real Estate said the development, located next to the Hundred Trees condominium, currently comprises 72 apartments and 66 shop units built in the 1980s by the Hong Leong Group.
The 956-year leasehold site has an area of 150,816 square feet. Under the 2008 Master Plan, the site is zoned 'Residential with Commercial at 1st Storey' with a gross plot ratio of 1.6, and an allowable height of up to 12 storeys. Credo said in its press statement yesterday that the Singapore Land Authority (SLA) has also granted in-principle approval for the amalgamation of the adjoining state land parcel of about 13,482 sq ft.This means that the sale site can potentially be enlarged to 164,298 sq ft with total gross floor area at about 262,877 sq ft. The sellers are expecting offers of between $160 million and $170 million, or about $752 to $794 psf per plot ratio, after factoring in the estimated land premium for the state land parcel and a development charge. Tan Hong Boon, Credo's deputy managing director, said: 'The appeal of the subject site lies in the flexibility of the commercial and residential mix in the new development. 'Depending on the creativity of the developer and subject to approval from the authorities, the site may be transformed into a condominium development with a trendy self-contained hub that offers an array of amenities and dining options to the residents in the development as well as to the resident catchment in the neighbouring housing estates.' The tender closes at 2.30pm on Sept 19.
- The Business Times, P30
- Also quoted in Straits Times, B23
More units cranked out as home sizes shrink
A study by Savills Singapore has put some hard numbers to the big lure of small apartments. Developers have been squeezing out more units on sites bought at state land tenders in recent years than was initially estimated. Savills' study shows that the supply from projects on each of eight sites exceed the supply estimate in the GLS Programme by more than 40 %. Savills found that a substantial portion of units in these developments are below 800 sq ft, and in some cases, even under 500 sq ft.
DTZ South-east Asia chief operating officer Ong Choon Fah observed that over the past 15-20 years, the typical size of a three-bedroom apartment has shrunk from about 1,600 sq ft to 1,200 sq ft, with compact three bedders at 1,000-1,100 sq ft. 'This trend has been driven by the increase in land prices and pressure to keep lumpsum home prices affordable, as well as population increase, smaller family sizes, advent of small home appliances - even vacuum cleaners are smaller these days - and changes in lifestyle patterns with the Gen Y wanting their own place,' said Mrs Ong.
- The Business Times, P1
Luxury homes go off the boil across region
The heat is going out of the luxury home market here and across the region, hit by factors from tighter mortgage lending to higher interest rates. The slowdown is affecting markets to different degrees but the trend shows prices softening across the region, with even red-hot Hong Kong coming off the boil. Prices in Singapore declined 1.7 % in the three months to June from the quarter before, according to a report from property consultancy firm CB Richard Ellis (CBRE) yesterday. Rents of upscale homes also dipped 1.9% in the same period. Competition from new buildings in non-prime locations was one factor for the price slide, the firm said. It added that prices for posh homes are falling slowly, although other property segments are likely to remain stable.
- The Straits Times, B24
- Also quoted in The Business Times , P30, “ Price rise of Asian luxury homes easing ”
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