There’s been a lot of buzz about property prices and cooling measures since the Government announced higher additional buyer’s stamp duty (ABSD) rates for residential property, effective April 27.
If you’ve just returned from a holiday in Japan, here’s a catch-up on the changes announced on April 26.
- Singapore citizens buying their second residential property now must pay 20 per cent ABSD, up from 17 per cent. They will pay 30 per cent ABSD, an increase from 25 per cent, for their third and subsequent properties.
- Singapore permanent residents (PRs) will see ABSD raised from 25 per cent to 30 per cent on their second property, and from 30 per cent to 35 per cent for their third and subsequent properties.
- For foreigners, ABSD on any residential property purchase doubles from 30 per cent to 60 per cent. A 65 per cent rate will apply to residential properties bought by entities or in trust, up from 35 per cent.
The new rates are expected to impact about 10 per cent of all private residential property transactions, based on 2022 data.
Why is the Government doing this?
The short answer, from National Development Minister Desmond Lee: It wants to dampen investment demand – both foreign and local – which is driving up housing prices and affecting Singapore citizens looking for homes to live in.
The last time the ABSD was hiked was in December 2021, alongside a tightening of borrowing. Further restrictions on housing loan limits followed in September 2022. These changes are only the most recent in a long history of the Government tweaking the rules to ensure property prices do not run ahead of fundamentals. Here’s a summary of Singapore’s property cooling measures: 1996 to present day.
Source: The Business Times