Singapore Budget 2009 – What It Means To Us

Finance Minister Tharman Shanmugaratnam unveiled the Budget for the fiscal year 2009 two days ago at 3.30pm; Among are the highlights of it’s 20.5 billion dollar Resilience package.

Here’re the highlights and perks for the property segment:

Bigger HDB Grants for Buyers

Additional Housing Grant (AHG) has been raised from $30,000 to $40,000. And more new families will definitely qualify for AHG since the income ceiling has been raised from previously $4,000 to $5,000.

This is the government way of letting us know that ahead of tough times, they still want people to own their own HDB flats to start a family, though I wish that they could raise the income ceiling higher for AHG. Any families that earns $5,000 or lesser could get the grant, but that doesn’t mean a new family would be able to enjoy the full grant of $40,000 as AHG is being tiered to your income. The higher your income that qualifies you in the criterion, the lesser you get.

A typical $4,900 income family would probably get $5,000.00 in the new AHG grant (my estimation)

The current AHG grant is still not being updated with the new stats, but can be found here in HDB’s website.

40% Property Tax Rebates for Industrial and Commercial Properties

Nada for residential. The government hopes that some of these savings will be passed down from landlords to tenants to sustain businesses. We’ll see rounds of negotiations coughing up on rental after this budget I’m sure.

The sad part is for residential property investors; No savings.

15% Rental Rebate For Government Tenants

This is a strong sign that governments are trying to save as much businesses as they can to sustain jobs. Government boards tenants from National Environment Agency (NEA), Housing Development Board (HDB), JTC Corporation and Singapore Land Authority (SLA) tenants will get the rebates. Yes, hawker stalls too!

HDB has already put up press releases on the rental rebates of 15% to their existing commercial tenants. Again, I’m not sure whether they did enough since the price on rentals and properties has inflated drastically in 2006/2007.

Allowing One Year Of Project Completion Period For Developers

To assist property developers during this slowdown, the government is allowing Developers with Qualifying Certificate (QC) to delay their project completion, by allowing more flexibility for them to stage their construction and sales to the market condition, as well as easing their cashflow.

Usually, QC holders are allowed to hold their projects for 6 years and with the above mentioned measure, developers are allowed to write in to Controller of Residential Property (SLA).

Developers of uncompleted Government residential projects awarded before 22 January 2009 will be allowed to apply for extention of Project Completion without extention premium.

Developers are allowed to re-assign of Government sale sites and private land

Should the re-assignments be not of speculative nature, the Government will be allowing it on case to case basis. Developers who wish to re-assign their land will have to have a written approval from Controller of Residential Property.

Four Years, Not Two From TOP To Dispose All Private Residential Properties/ And Allowing Developers to Rent Out Unsold Units for Maximum of 4 Years

The previous 2 years rule for QC holders to dispose their residential properties have been eased. Developers can now stage according to the market conditions and that would ease them in terms of their planning and execution of marketing plans. 4 years would be a fair duration given that the property cycle might pick up from 2011 – 2012.

Developers Can Pay Tax Later For Land Approved Sites

The Government is allowing developers to defer their property tax for up to 2 years. The sites must come with a valid Provisional Permission (PP) or Written Permission (WP) to qualify for such deferment.

Well we couldn’t say that there’s nothing done to aid our market, given that there’s alot of consideration in all sectors apart from the property segment.

We’ll see if it helps in curbing the credit crunch with the Resilience Package this year (especially after Chinese New Year).

Written by Benson Koh
Benson Koh is a professional real estate realtor with over 9 years of experience specializing in all forms of real estate consultancy and brokeraging of different segments from regal homes to commercial spaces. Also a boutique developer, he manages bothSRI5000 Developments which concentrates on landed homes as part of his land bank segment and Singapore Realtors Inc (SRI), a real estate agency which has over 5 years of group experience. You can reach him here via various channels. [ Facebook | Linkedin | Twitter | RSS Feed ]