Recently the Business Times published an article suggesting a possibility that a property cooling measure may be announced soon where local Singaporeans may need to pay a 5 per cent Additional Buyers Stamp Duty (ABSD) for buying their first local residential property above S$1 million.
This possibly unthinkable scenario came after a record number of new launch property sales was seen last month in November where developers sold 2,557 private homes more than three times the volume of sales from the previous year's November sales of 784 units.
With Singapore's private home market expected to roar into the upcoming year of 2025 on the back of consecutive project launches buoyed by strong pent-up demand amidst rising consumer sentiment and optimism of the future.
Based on yesterday 16th Dec 2024 data released by the Urban Redevelopment Authority (URA), the latest sales figure, which excludes executive condominiums (ECs), is 246.5 % more than the 738 units sold in October this year.
Foreigners buying any residential property in Singapore 27 Apr 2023 will have to pay an additional buyer’s stamp duty (ABSD) of 60% after it was doubled from 30% - image from IRAS website
Since 2009, the Singapore government has implemented over 10 rounds of property cooling measures to maintain a sustainable property market and prevent speculative activities. These measures have been introduced periodically in response to market conditions, with notable rounds in 2013, 2018, 2021, 2022 with the latest round being the most drastic in terms of Additional Buyer Stamp Duty (ABSD) doubling for foreigners buying Singapore residential property from 30% to 60% over and above the price they pay for their residential property purchase. See above for the cooling measure implemented on 27 April 2023.
After last month's eye popping sales figures where more than 90% of the residential units sold are purchased by Singaporeans and Singapore Permanent Residents owning their first property, some property analysts speculate that the government may raise the Additional Buyer Stamp Duty (ABSD) for Singaporeans buying their first property priced above one million by 5% and Permanent Residents buying their first property above one million dollars may have to pay 10% Additional Buyer Stamp Duty (ABSD) as demand from locals and Singapore PRs purchasing homes for owner-occupation has been growing stronger and is expected to rise next year.
However, real estate analyst - Kiwi Lim from Propnex Realty believe that it is unlikely that Singapore government will penalize Singaporeans for owning their first home, as home ownership is a key pillar of Singapore’s housing policy and a fundamental part of the nation’s social and economic framework.
One of Singapore's proudest global achievement is in the fact that we have one of the highest home ownership rates in the world (about 89%) due to far-sighted government policies that encourage and support first-time homebuyers.
Our government policies often favor first-time homebuyers over investors or those purchasing second properties which is why the Singapore government offer helpful schemes like CPF Housing Grants and subsidies for HDB flats ensure that Singaporeans have affordable options to buy their first home.
"If you look at the past property cooling measures implemented by the Singapore government, you can see that ABSD and tighter loan restrictions are mainly targeted at multiple property owners and investors to curb speculation. First-time buyers are not the target of such policies, as the government aims to ensure Singaporeans can afford their first homes without undue pressure" said Kiwi Lim, associate group director of Propnex Realty.
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