“Married Singaporean couples will have one year instead of six months to sell their first residential property to qualify for remission of additional buyer’s stamp duty (ABSD) for their second property.”Quote from The Straits Times
On first look, this temporary relief measure does not seem very impactful but this is one of the best measures implemented by the Government. With the start of the Circuit breaker, property viewings of all kind have to be postponed indefinitely.
For married Singaporean couples who have purchase their private residential properties and paid for the ABSD so that they have time to wait for renovation or for the new launch project to complete this year, the Circuit breaker would cause huge problems as the whole viewing process is forced onto the digital platform, and not every buyer is ready to embrace the new new.
For example, a married couple who purchase a $1.5 million private residential property, the 12% ABSD would have amounted to a whooping $375,000 in taxes, which they will not be able to get back if they do not sell their first property within 6 months.
While this measure will not affect first-time buyers, it would be beneficial for the married couples who fit in the category. The main objective to the Government is to protect this vulnerable group of buyers, but also to help the sellers of the properties who might also be affected if the sale is aborted.
A huge abortion of property transactions could also shake the confidence of the property market, which is an unnecessary knee-jerk reaction that I would believe the Government would want to avoid.
Overall, I see this as a positive measure to protect the Singapore property market. Besides, failure to assist this group of stakeholders could cause an upset in the upcoming elections? RET
Do you require property tax planning or advice on how to manage the buying-purchasing timeline? Call Reuel Eugene Tay at +65 9833 6450 for a real estate discussion.
CNA, Circuit breaker measures, 3 Apr 2020