Revised ABSD rules for upgraders, more GLS sites in OCR among PropNex’s Budget 2023 wishlist

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/ EdgeProp Singapore
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January 13, 2023 6:53 PM SGT
PropNex has outlined its wish list ahead of the Budget 2023 announcement slated on Feb 14 (Picture: Samuel Isaac Chua/The Edge Singapore)
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SINGAPORE (EGDEPROP) - PropNex Realty has released a wish list ahead of the Budget 2023 announcement on Feb 14. In a Jan 12 press release, the company offered its recommendations “to further support home ownership as well as to meet housing aspirations of Singapore households”. “In Budget 2023, we hope that some housing policies could be tweaked to help certain segments of the population own homes and upgrade to a private property,” says Ismail Gafoor, executive chairman and CEO of PropNex.
In its wish list, the company proposed a revision in additional buyer’s stamp duty (ABSD) remission rules for married couples who are upgrading from HDB flats to private homes. Currently, HDB upgraders buying a new private property have to pay ABSD upfront, within 14 days of signing the sales and purchase agreement. They can apply for an ABSD remission if they sell the HDB flat within six months after the date of purchase or temporary occupation permit (TOP) or certificate of statutory completion (CSC), whichever is applicable. (Find HDB flats for rent or sale with our Singapore HDB directory)
Noting the upfront ABSD payment – at 17% for Singaporeans buying a second residential property – is “the biggest hurdle” for many families looking to upgrade to private property, PropNex proposes the government consider revising the rules such that they are more aligned to those applicable to buyers upgrading from an HDB flat to an executive condominium (EC). Buyers in this category do not need to pay ABSD upfront and are required to sell their flat six months after their new EC receives its temporary occupation permit. “There can be some form of contractual undertaking to ensure that the private home buyers sell their HDB flats within six months of collecting keys to their new home,” PropNex remarks.
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The wish list also requested more clarification on the wait-out period announced as part of the cooling measures rolled out in September 2022. Under this measure, private homeowners must now wait 15 months from the sale of their property before they can buy an unsubsidised HDB resale flat. The wait-out period will not apply to seniors aged 55 years and above who are moving to a four-room or smaller resale flat At the time the cooling measures were announced, the government had referred to the wait-out period as a temporary measure that would be subsequently reviewed, depending on overall market conditions and housing demand.
As such, PropNex is recommending further details be provided on this front. “PropNex hopes that the government can provide more clarity as to when this rule will be reviewed, and perhaps offer an update in the second half of 2023 on the initial impact of the wait-out period on moderating resale flat demand and prices,” the company states.
In terms of supply, the company is calling for an increase in Government Land Sale (GLS) sites located in the Outside Central Region (OCR) under the 2H2023 GLS Programme. Last month, the government unveiled the 1H2023 GLS Programme with seven sites on the Confirmed List and nine sites on the Reserve List.
Under the Confirmed list, the seven sites can yield a total of 4,090 residential units including ECs. Of this figure, 2,120 units are located in the OCR — lower than the 2,550 OCR units released under the 2H2022 GLS Programme, PropNex highlights.
Given that the OCR serves a wider pool of demand, PropNex hopes the government will consider injecting more GLS sites into this sub-market in the 2H2023 programme. The company adds that pent-up demand for new homes in the OCR, combined with a low amount of unsold stock, will likely keep prices firm. “We believe the injection of more OCR residential supply will play a part in keeping mass-market home prices stable in the future,” Gafoor remarks.
Meanwhile, the company also suggests the government reduce waiting times for Build-to-Order projects from the current length typically exceeding four years down to three years. “As the borders reopen and workers return to support the construction sector post-pandemic, and with the continued use of productivity measures such as precast technology, perhaps the government can consider building more BTO projects in advance ahead of the sales launch,” it states.
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