Government introduces new round of property cooling measures; ABSD for foreign buyers doubles to 60%

By The Edge Singapore
/ EdgeProp Singapore |
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SINGAPORE (EDGEPROP) - The government is levying higher ABSD rates, in a bid to cool the property market that remains firm even with a dimmer economic outlook.
With effect from April 27, Singapore citizens have to pay a 20% ABSD, or additional buyers' stamp duty, on their second residential property. They now pay 17%.
Citizens have to pay 30% on their third and subsequent property, up from 25% now. A similar rate applies for Singapore PRs buying their second residential property.
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The government is also raising the ABSD rate from 30% to 35% for Singapore PRs purchasing their 3rd and subsequent residential property.
The ABSD for foreigners buying any residential property will be doubled from 30% to 60%.
The ABSD for entities or trusts buying any residential property, except for developers, will be raised from 35% to 65%.
table 1 - EDGEPROP SINGAPORE
1. The ABSD residential property count includes properties that are owned wholly, partially, or jointly with others. 2. The ABSD (Trust) rate was for the period from 9 May 2022 to 26 April 2023.
3. ABSD (Trust) is payable by a trustee of any trust when acting in that capacity, but excludes the following: (a) trustee for a collective investment scheme when acting in that capacity; (b) trusteemanager for a business trust when acting in that capacity; (c) trustee for a housing developer when acting in that capacity. (a)/(b) and (c) are already subject to ABSD (Entity) and ABSD (Housing Developer) respectively, when they acquire residential property.
4. Housing developers refer to entities in the business of housing development (i.e. construction and sale of housing units) with respect to the subject property acquired. These include trustees for housing developers.
5. Housing developers may apply for remission of this ABSD, subject to conditions.
6. This 5% will not be remitted and is to be paid upfront upon purchase of residential property.
(Source: MOF, MND, MAS)
The implementation of the property market measures in December 2021 and September 2022 have had a moderating effect, says the Ministry of Finance, Ministry of National Development, and the Monetary Authority of Singapore in a joint statement late in the evening of April 26.
However, in 1Q2023, property prices showed renewed signs of acceleration amid resilient demand. Demand from locals purchasing homes for owner-occupation has been especially strong, and there has also been renewed interest from local and foreign investors in our residential property market.
"If left unchecked, prices could run ahead of economic fundamentals, with the risk of a sustained increase in prices relative to incomes," the government says.
This article first appeared on The Edge Singapore.

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