Singapore’s additional stamp duty hike for foreigners ‘earth shattering’ for luxury market but unlikely to dampen demand from ultra rich
- Raising of additional buyers’ stamp duty from 20 per cent to 30 per cent seen as having short-term impact; won’t deter those seeking homes in the S$30 million-plus range
- Chinese, Indians and Americans are the largest investors in the city state’s property market, but US buyers will be exempt due to free-trade agreement
In a late night announcement on Wednesday, a joint statement by two ministries and the central bank said foreigners buying their first home would face a 10 percentage point increase in additional buyers’ stamp duty (ABSD), bringing the tax from 20 per cent to 30 per cent of the purchase price.
Entities will pay 35 per cent, up from 25 per cent.
Singaporeans and permanent residents, who are eligible to buy public housing, do not face a tax hike for their first properties but do face a 5 per cent increase in stamp duties on their second and third properties.
The total debt servicing ratio was also reduced from 60 to 55 per cent. This means only 55 per cent of a borrower’s gross monthly income can go towards repaying his or her monthly total debt obligations.
One property agent told This Week In Asia that his client, a Chinese woman from a southeastern province, was kicking herself for not buying her dream home earlier.
The woman, whose children are studying in the city state, was set on a S$3 million apartment in central Singapore but was waiting for her husband to arrive next month to confirm the purchase.
Her stamp duty will now cost S$900,000 instead of S$600,000.
