A growing chorus of property industry leaders is loudly calling for a reprieve from the heavy 60% Additional Buyer’s Stamp Duty (ABSD), urging the government to rethink the steep rates that have been in place since April 2023. Since that fateful date, foreign buyers have faced an entry fee into the local market that is hard to ignore.
Before the hike, the rate was a manageable 30%, but it has since doubled to a staggering 60% on any first residential property purchase. This dramatic shift was originally intended to manage investment demand and prioritize housing for locals, but sector experts now argue the pendulum has swung too far.
For a non-citizen looking to buy a standard S$2 million condo, they are now looking at an eye-watering S$1.2 million tax bill just for the privilege of signing the papers, and that excludes other standard fees.
Property players are urging authorities to reconsider these measures, specifically regarding prime properties where foreign interest is typically concentrated. They highlight that the burden is becoming excessive, effectively freezing a significant portion of external investment. Integrated developments like The Reserve Residences have become particularly attractive to local buyers as foreign investors retreat from the market.
While Singapore citizens still enjoy a 0% rate on their first home and Permanent Residents pay a modest 5%, the chasm between local and foreign rates has widened immensely. Nevertheless, domestic investors are not fully shielded, as citizens must pay a 17% levy on their second property purchase.
Even non-housing developer entities haven’t been spared, as they now face a 65% levy, a steep climb from the previous 35%. Trusts are also subject to this increased rate, though refunds are available if the property is held for identifiable individual beneficiaries. The industry insists that after such a long period of these “cooling” measures, the market might just be a little too cold.
Interestingly, not everyone is locked out by these high walls, as nationals from the USA and a few specific European nations still enjoy the same rates as locals under free trade agreements.
However, for the vast majority of international investors, the math simply doesn’t add up anymore. With the top marginal rate for Buyer’s Stamp Duty added on top, the upfront cash required is astronomical, payable within just 14 days of securing an option.
As calls for a review intensify, stakeholders now hope for a targeted adjustment to bring some necessary life back to the luxury segment.
