Foreigners Under Singapore Free Trade Agreements to Pay Same Citizen Buyer Stamp Duty

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.

New Cooling Measure – Additional Buyer’s Stamp Duty

Ministry of National and Development

Ministry of National Development has released a heavy cooling measure to curb residential property investments or speculations, with updates as follow:-

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.

Official Source: MND Website

In Summary

All foreigners buying 1st residential property in Singapore will have to pay 13% Buyer’s Stamp Duty instead of the previous 3% (Additional 10%)

All Permanent Residents 1st residential property will still remain 3% and the 2nd one will be 6% Buyer’s Stamp Duty (Additional 3%)

All Singaporeans 1st and 2nd residential properties will remain at 3% and the subsequent ones to be at 6% Buyer’s Stamp Duty (Additional 3%)

Outlook

This will dampen residential market strongly as foreign buying interest has always been very strong. That said, other property segments such as commercial and industrial should not be affected.

Reflections at Keppel Bay – A Visual Art, Helm of Architecture

View of Reflections at Keppel Bay from Sentosa Cove
View of Reflections at Keppel Bay from Sentosa Cove

Drive along the East Coast Expressway (ECP) and there is no way that you can miss these few blocks of buildings which are seemingly dancing and turning along Keppel Marina. You would imagine how would it look inside, and what kind of views will it get from the inside. Continue reading “Reflections at Keppel Bay – A Visual Art, Helm of Architecture”

URA Development Charges Revised – Commercial and Industrial Upwards

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?

National Day Rally – HDB Income Ceiling Raised

PM Lee in the National Day Rally - photo from Channel News Asia

Prime Minister Mr. Lee Hsien Loong announced during the National Day Rally that the income ceiling, which was untouched for 17 years to be raised from the maximum $8,000 to $10,000 and for ECs from $10,000 to $12,000.

From Channel News Asia,

SINGAPORE: The government will raise the qualifying income ceilings of households for HDB’s Build-To-Order (BTO) flats and Executive Condos (EC), said Prime Minister Lee Hsien Loong in his National Day Rally speech on Sunday evening.

The qualifying income ceilings of households for BTO flats will be increased from the current S$8,000 to S$10,000, and for ECs from the current S$10,000 to S$12,000.

Prime Minister Lee Hsien Loong made the announcements in his National Day Rally speech on Sunday evening.

He said HDB will also build another 25,000 BTO flats next year to meet demand and keep prices of new flats stable and affordable.

The government will also be adding 7,000 rental units over the next two years and postponing demolition of some SERS blocks to be used as temporary rental units.

Mr Lee said the moves will ease the waiting time for needy Singaporeans who require rental flats.

The prime minister also made the commitment to keep housing available and affordable for Singaporeans.

What it means for fellow Singaporeans

Young couples who worry about their combined income ceiling will now be able to apply for their BTO (Built to Order) flats, they cater especially to a special group as mentioned by PM Lee, who are earning just below the HDB income ceiling as ‘most worried’. There are more of such couples as incomes have gone up and people are also marrying later, he said. Hence, HDB will be raising this ceiling.

You would probably see more demand for ECs and BTOs in the next recent months, and new condominium launches for the mass market more cooled off in terms of transactions.

Conveyancing Rules to Start from 1st August 2011

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.

Tulip Garden lowers asking to $600M

Tulip Garden seems reasonable in their lowered asking price of $600M with $1,118psf ppr in Farrer for a freehold site. Will they be able to succeed this round?

Singapore Property Auctions for June 2011

These are all the Singapore property auctions for the month of June 2011

Collier's 2011 June Property Auctions

Colliers will be conducting their auction sale on the 22nd of June 2011 (Wed)


Venue : Amara Hotel, Connection Room 1, Level 3
Time : 2.30 pm

*All Owner’s Sale

JLL June 2011 Property Auctions

Jones Lang Lasalle will be conducting their auction sale on the 23rd of June 2011(Thurs)


Venue : Amara Hotel, Connection Room 1, Level 3
Time : 1.45pm & 2.30 pm

*All Owner’s Sale

DTZ June 2011 Property Auction

DTZ will be conducting their auction sale on the 29th of June 2011 (Wed)

Details not out yet

Do refer to my auction guide FAQ if you’re new to Singapore Auctions.

To Express Interest

To express interest in any of the properties listed in any of the Auction, you can contact me (+65 9091 5000) to make arrangement.

Win a Free PropertyGuru Analytics Account!

propertyguru analytics for free?

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ONLY confirmed subscribers are eligible for the lucky draw.

The winner will be announced on 30th of June 2011 (Thurs) via both e-mail and the blog