Five projects racing to beat ABSD deadline

By
/ The Edge Property
|
July 18, 2016 8:00 AM SGT
As the five-year deadline for their Additional Buyer’s Stamp Duty (ABSD) remission approaches, some developers must ramp up efforts to sell units in their projects, while others cannot afford to let sales momentum falter if they want to avoid paying ABSD.
Under the ABSD remission rules, developers do not have to pay ABSD on the purchase of land if they complete and sell all their units within five years of the acquisition date. Those who fail to do so, even if they are left with just one unsold unit, will incur a 10% ABSD if they purchased the land between Dec 8, 2011 and Jan 11, 2013, and 15% if they purchased the land on or after Jan 12, 2013. A 5% interest rate per annum will also be levied.
Several projects are close to the finish line, and their developers must maintain or increase sales momentum to avoid the ABSD (see table). The list is derived from developers’ sale data published by URA for May 2016 and new sale caveats with contract dates in June (based on caveats downloaded on July 6).
These developments can avoid ABSD if sales momentum is good
Development
Market segment
ABSD deadline
Number of months till deadline
Total units
Unsold units
OCR
Mar-17
9
512
106
OCR
Jun-17
12
463
122
OCR
Oct-17
16
726
236
RCR
Sep-17
15
266
136
RCR
Dec-17
18
429
167

Source: URA, The Edge Property

One of these projects is Kingsford Hillview Peak, where 21%, or 106 remaining units, out of a total of 512 units must be sold by March 2017 to avoid the ABSD. There was a significant pick-up in average monthly sales to 12 units in 2H2015, compared with the low single- digit sales between September 2013 and June 2015. Average monthly sales further increased to 28 units in 1H2016. This might be due to the opening of the Downtown Line and a step-up in marketing efforts. The median price was $1,319 psf for the 19 units sold in June. Based on caveats lodged, the developer has lowered prices for the larger units. At the current pace, the developer is likely to sell all the remaining units ahead of its ABSD deadline in March 2017.
Another development is Vue 8 Residence in Pasir Ris, where an average of nine units were...