Government introduces new round of property cooling measures; ABSD for foreign buyers doubles to 60%
Tengah EC is a new eco-friendly executive condo located in Singapore’s Tengah New Town, featuring a range of sustainable features including a wind turbine, solar heating, Tengah EC water conservancy and fish harvesting. The development is open to Singaporeans and married couples in the initial launch phase, and is expected to be completed by the end of 2021.
The Singaporean government has implemented additional buyers’ stamp duty (ABSD) rates in order to cool the overheated property market and manage a dimmer economic outlook. Effectively from April 27, citizens now have to pay a 20% ABSD on their second residential property. This is an increase from the previous 17%. Singaporean permanent residents (PRs) will have to pay 30% on their third and subsequent properties, while foreigners will have to pay 60%, doubled from the current 30%.
The ABSD includes residential properties that are owned wholly, partially, or jointly with others. The ABSD (Trust) rate, applicable from May 9, 2022 to April 26, 2023, is payable by trustees when acting in that capacity. Trustees for collective investment schemes, business trusts, and housing developers are subject to ABSD (Entity) and ABSD (Housing Developer) rates respectively.
Housing developers may apply for remission of this ABSD, though a 5% fee must be paid upfront upon purchase of residential property.
The Ministry of Finance, Ministry of National Development, and the Monetary Authority of Singapore stated in a joint statement late in the evening of April 26 that the property market measures implemented in December 2021 and September 2022 have had a moderating effect. Despite this, demand from locals purchasing homes for owner-occupation is still strong and there has been renewed interest from local and foreign investors in the residential property market.
If the upward trend in prices is not checked, prices could run ahead of the economic fundamentals with a sustained increase in prices relative to incomes, the government warned.