Following with the news of the introduction of Buyer’s Stamp Duty, IRAS has came out with the circular to clear up on the property counts and news of some exemption to the new cooling measure introduced on 8th of December 2011.

Citizens of five countries that have free trade deals with Singapore, including the United States and Switzerland, will be treated as Singaporeans for the purposes of the new stamp duty measures.  When they buy a private home, Americans, Swiss and nationals from Liechtenstein, Norway and Iceland will be treated the same as Singapore citizens.

This will enable them to avoid the new 10 per cent additional buyer’s stamp duty that foreigners now have to pay when they buy a private home.

Free trade agreements usually ensure that a country’s citizens are accorded certain trade protections when they are in the partner nation.

The tax guide basically spells most of the scenario how the Buyer’s Stamp Duty will work and which cases could apply for remissions. Fellow Realtors are highly encouraged to download and read it through to understand the different scenarios so you could go through with your clients.

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URA has just revised the development charges for the following groups:-

The DC rates for Group A (Commercial) have increased by an average of 22%, with the largest increase of 32% in Sector 101 (Paya Lebar Central: Paya Lebar / Eunos / Macpherson Road area).

For Group B1 {Residential (landed)}, the DC rates have on average increased by 17%, with the largest increase of 20% in 22 out of 118 geographical sectors.

The DC rates for Group B2 {Residential (non-landed)} have also increased by an average of 12%. The largest increase is 39% in Sector 57 (Serangoon Road / Whampoa / Bendemeer Road area).

For Group C (Hotel/Hospital), the DC rates have an average increase of 7% with the largest increase of 9% in Sectors 1, 2 & 7(Cecil Street / Boon Tat Street / Robinson Road area), and Sectors 19, 20 & 21 (Havelock Road / Clemenceau Avenue / New Bridge / South Bridge Road / Upper Pickering Street area).

The DC rates for Group D (Industrial / Warehousing Use) has increased by 31% on average, with the largest increase of 55% in Sector 114 (Tuas / Pioneer Road / Jurong / Sungei Kadut / Mandai Estate / Woodlands area) and Sector 115 (Woodlands / Sembawang / Yishun area).

The rest remains unchange.

Official press release can be found here.

There’s a lot of activities going on in the commercial/light industrial real estate scene including both sales and rental market. Would we see another spike in their prices?

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This law is finally been enacted.

As mentioned in August 2009, the Government was considering making it compulsory for conveyancing lawyers to have their stakeholder’s funds held by conveyancing accounts in banks.

Under the new measures, lawyers will no longer be allowed to receive and hold conveyancing money in their clients’ accounts. Instead, the money must be held in a conveyancing account in banks appointed by the Ministry of Law. Withdrawal or pay-out of such money will require two-party authorisation.

Violation of the rule will result in a fine of up to S$50,000, imprisonment of up to three months, or both.

Singapore Land Authority (SLA) has also set up a new electronic Payment Instruction (ePI) service to provide a better and more secure environment for lawyers to initiate pay-out instructions and counter-sign digitally, as well as for the appointed banks and SLA to securely process and retrieve instructions.

Such will prevent cases like these from happening. This would boost confidence to our locals as well as our foreign investors of our conveyancing process of procuring a property in Singapore.

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Its no surprise that foreign buyers are the ones that is zapping up most of the properties in Singapore, allowing the figures to hit yet another height.

The studies according to DTZ were recorded and reported in Straits Times today surprising previous average figure of 12% over 2010.

FOREIGN home buyers snapped up 16 per cent of all private homes sold in the first quarter – the highest quarterly percentage since data became available in 1995.

Experts say the high foreign proportion in the market is because such buyers have been less affected by the rounds of cooling measures which have muted local interest.

The overseas impact has been telling, according to the DTZ Research report that contains the new buying figures. – more from Straits Times Online

Despite strong cooling measures which should have been affecting their buying decisions, foreign investors see their purchases as a long term investment as they’re unfazed by the seller’s stamp duty measures.

The many reasons why foreigners buy into Singapore include:

• Stronger Singapore Dollar against the US Dollar, a great way to curb declining currency value
• Singapore’s Political Stability
• Singapore Government’s welcome policy of foreigners’ investment
• World class education system
• ASEAN footing of Singapore with its convenient location which is popular with Asian countries like China, Vietnam, Indonesia, India.

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The National University of Singapore has developed a new index for Singapore residential homes on month-to-month price movements,

The National University of Singapore (“NUS”) Singapore Residential Price Index Series (“SRPI”) is a transactions-based index that tracks the month-on-month price movements of private non-landed residential properties in Singapore. Developed by a team of researchers at IRES, the SRPI provides a resource for the development of property derivatives that would help to expand the suite of financial products offered in Singapore, particularly in the context of obtaining exposure to and managing risks associated with the real estate market. It will also complement existing property information on the state of the residential market.

Currently, SRPI indexes are published in the form of value-weighted indexes. The SRPI is the index for the overall non-landed residential market in Singapore based on the whole SRPI property basket. Two sub-indexes are also produced for the Central and non-Central regions. The Central region sub-basket comprises properties within the overall SRPI basket located in Postal Districts 1 through 4 and 9 through 11 while properties in the other postal districts are in the non-Central region sub-basket.

This proves very useful as this index would not be lagging too much deriving from month to month transaction data. From the trends on the chart, you could see the direction is heading north.

For the latest update of the index, visit NUS SRPI website.

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Capitaland and Hotel Properties Ltd will be launching the former Gillman Heights condominium site with a $1.4 billion design by Ole Scheeren of OMA. The Interlace with a sprawling 81,000 sqm (871,560 sqft) land and a GFA of 170,000 sqm (1,829,200 sqft) will be configured into a 1,040-unit development next month.

Images from The Inhabitat.

Ole Scheeren is the man behind the design of China Central Television (CCTV) Headquarters in Beijing. His previous work includes the Prada Epicenters in New York City and Los Angeles. Just look at the breathtaking and bold architecture design here.

Imagine this. A 31 apartment blocks of six storey each, stacked hexagon ways. On top of which, sky gardens and roof terraces are key features with the surrounding Telok Blangah greenery. A mixture of townhouses (which could double up as home offices), 2-bedrooms, 3-bedrooms, 4-bedrooms and penthouses will be available as part of its offering in this 99-year leasehold project.

I like the description used by The Inhabitat for The Interlace, Jenga-Like apartments.

The Interlace by Capitaland. Image credit to Inhabitat

The project will be ready by 2014, is own by Capitaland, Hotel Properties Ltd (HPL) and National University of Singapore (NUS). The architect is local RSP Architects Planners & Engineers (ION Orchard, Wheelock Place, St Regis Hotel & Residences) and the landscape architect is award-winning ICN Design International

To find out more about The Interlace as the latest news releases, feel free to register with me or contact me at +65 91253045.

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Nothing new is springing up from Inland Revenue Authority of Singapore (IRAS), after a period of uncertainty especially to property investors with the recent speculations of government measures to firm up the possible taxation of property owners selling their assets for capital yield.

Previously it was proposed that an individual who sells a property would not be taxed on the profit if he had not sold any other property in the preceding four years.

The public consultation process for the proposal attracted 64 responses with 60 opposing the change. This rule would be confusing to sellers amidst the economy which seems to start finally picking up pieces.

The gray area of how IRAS actually goes after property owners who transacts property on a regularly basis will still persist, but its still better than punishing long term investors who deem investing in property as a financial tool to hedge inflation over a long period.

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Finally! And I thought it’s going to take them long enough to realize that sometimes even the level which is suppose to be the most just and neutral party might just give you the most problematic issues.

Ministry of Law has came up with a proposal that might allow an entity to be the stakeholder instead of the law firms that are in charged of conveyance of the intended property. The two suggestive was either the local banks or the Singapore Academy of Law to be the possible candidate in the process.

This move is to prevent lawyers who has ill-intention to abscond their clients deposits. The most common property conveyancing involves in lawyer holding deposits is via the option to purchase method to purchase a property.

The usual conveyancing process involves the buyer to pay the seller a option money (usually 1%) and have a exercise money (4% or more, depending on the cash or what the option conditions were) which is to be held by the lawyer as stated in the option; The law firm will safe-keep the deposit (as stakeholder cheques are usually issued to the firm’s name). Upon the completion date of the property, the lawyer will then release the stakeholder’s sum together with the rest of the balance amount due to the seller.

You’ll feel much safer now when the deposits are addressed to an authority assigned department. This change is likely to happen by the end of the year.

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1. Law Firm Pays $750,000 Difference for Not Exercising Option on Time

Novena - Viva, A 235 unit freehold condominium

It was a busy day at the show flat for Viva, an AllGreen launch at the 4th day of its private preview for Knight Frank customers.

107 units out of a total number of 235 was sold till today and not all apartments were fully released. Among the most popular sizes were the 2-bedroom (957sqft) and the 2+study (1,044sqft) as they were snapped up as soon as they were announced available. Price is averagely sold around 1,550 per square foot on median.

A copy of the latest units sold could be downloaded here.

Viva - artiste impression

These are the selling factors that moved buyers to purchase Viva

1. Prime Location, next to United Square and stone throw away from Novena MRT Station
2. Good large plot of freehold land
3. Quality Finishing
4. Extremely functional layouts

The official launch for Viva is tomorrow (8th of August 2009) and all agencies are welcome to co-broke with any of the Knight Frank agents to bring your client down. To avoid disappointment, buyers and co-broking agents do call/text me at +65 91253045. If you can’t reach me, please contact Nicholas at +65 96582047.

Refer to the FAQ for Viva to understand the discounts given with the different payment schemas.

Should you have further queries about Viva, you can use this contact form to reach me; Expect a prompt reply.

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This will serve as a wake up call on the duties as a conveyancing law firm to or even to remind the client to exercise his/ her option to purchase on time.

June 20, 2009

A day late and $750,000 short for law firm

Clients win suit against firm for being late in filing purchase option for condo unit
By Desmond Ng

WHAT a difference a day makes.

For one couple, the mere delay of a day in buying their dream home cost them more than $700,000.

And the law firm, Toh, Tan & Partners, which had acted for them in the purchase, was made to pay them $750,000 in compensation.

The couple, Mr Chee Peng Kwan and Ms Jackelyn Sim, had instructed the firm to exercise their option to buy a property.

But the firm was one day late in doing so, resulting in the couple losing out on the chance to buy a unit at The Seafront on Meyer, a freehold condominium development along Meyer Road, in April 2007 at an offer price of $2.9 million.

The couple successfully sued the firm for breach of contract and negligence, and was awarded about $750,000 in compensation by the High Court on Tuesday.

The option to purchase is the right to buy a property at a certain price within a specified period, usually two weeks. To secure this, the buyer must pay an option fee to the property’s developer.

Court papers obtained by The New Paper stated that the couple wanted to live in the same block as Ms Sim’s father and sister because they wanted to stay close as a family.

The location is also attractive – it is on the site of Meyer Tower, an old development which was sold en bloc to make way for this new project.

Ms Sim’s family used to live in Meyer Tower.

The couple wanted the property so badly that they registered their interest with the developer even before the launch. They were third in the queue at the launch, behind Ms Sim’s father and sister, who were second.

The developer is CRL Realty, a subsidiary of CapitaLand. The project is expected to receive its temporary occupation permit (TOP) in 2011.

Booked units together

The couple booked their unit on the 23rd floor for about $2.9 million, while other family members booked another unit a floor below.

It is not known how much the other unit cost.

All of them engaged the same lawyers to act for them in the buying of the two units.

Their lawyers exercised the option for Ms Sim’s father and sister on the due date – 7May 2007 – but delivered the option for the couple’s unit only one day later, on 8May.

The couple discovered that their signed option had not been received by the developer on time only after the developer’s lawyers informed them. It is not known when they were told before that.

But it was too late. So the developer forfeited 25 per cent of the booking fee – about $36,500 – which had been paid by the couple.

Frantic, the couple pleaded with the developer to release their dream unit and even offered to pay a higher price.

But the developer refused to release the unit and told the couple that it ‘had no intention to resell the unit at the moment’.

In May last year, the developer suddenly released the unit for sale at $3.6 million – about $700,000 more than the initial offer.

Afraid to lose their dream home again, the couple quickly bought the unit and were given a discount of about $36,000 by the developer.

The couple then sued the law firm to claim the difference of about $750,000 – which includes the 25 per cent forfeiture fee, the difference between the new and old purchase price, additional stamp duty on the new purchase price and partial cancellation fees.

Lawyers Lee & Lee acted for the couple.

Drew & Napier, which acted for Toh, Tan & Partners, argued that its client should be responsible only for the difference between the original purchase price and the value of the property three months later.

They said that three months was a reasonable period of time to either negotiate the purchase of the preferred unit or alternative units.

They also argued that the couple cannot recover the full difference because the true market value of the unit was much lower than $3.6 million.

The couple should have looked for alternative units in the same development or other developments at a reasonable price, they said.

The court disagreed.

Assistant registrar Teo Guan Siew said the lawyers knew that the unit was special to the couple.

He said that Ms Sim’s father had called the law firm specifically to remind them to exercise the option on his daughter’s unit.

Said Mr Teo: ‘In the circumstances, the defendants (Toh, Tan & Partners) obviously had actual knowledge that the family wanted to stay close to each other, and specifically that they wanted to live together in two units with one directly above the other.’

Mr Teo noted that the price increase of slightly more than 20 per cent from the original purchase price after a year in a rising market was not unexpected or unreasonable.

Also, the lawyers had encouraged the couple to try and buy the unit from the developer up to as late as December 2007, more than seven months after the date of the original purchase.

The court felt that the couple’s argument – that the price of the new unit reflected the market price – was credible. The developer had not offered the unit to the couple at a price higher than those offered to other potential buyers.

Said assistant registrar: ‘The defendants who failed to exercise the original option on behalf of the plaintiffs (the couple) should be made to compensate the plaintiffs for the loss they suffered in having to pay the increased purchase price to get back the unit from the developer.’ Source: The New Paper

Getting a qualified conveyance law firm to deal with your property conveyancing would be the best way to prevent such mishaps from happening.

Also as a buyer, you will have to be concerned on the timeline and clear any possible air on the dates of the option, the exercising of the option and the completion dates. Your banker must work hand in hand with your law firm to ensure a smooth transition.

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