Singapore’s ABSD hike won’t be hurting these foreign buyers

PROPERTY buyers of certain nationalities, including Americans, are exempt from Singapore’s recent tax hike for foreigners.

Nationals from the US, Iceland and Norway, among others, are accorded the same stamp duty treatment as Singapore citizens, based on respective free trade agreements from about a decade ago.

In April, the Government stepped up Additional Buyer’s Stamp Duty (ABSD) rates for residential properties, in a fresh round of cooling measures aimed at curbing investment demand.

For Singapore citizens, ABSD for the purchase of their second property will be raised to 20 per cent from 17 per cent, and to 30 per cent from 25 per cent for their third and subsequent properties. For Singapore permanent residents (PRs), ABSD will be raised to 30 per cent from 25 per cent on their second property, and to 35 per cent from 30 per cent for their third and subsequent properties.

Foreigners bear the brunt of the increases, with ABSD on any property purchase doubled from 30 per cent to 60 per cent. A 65 per cent rate will apply to residential properties bought by entities or in trust, up from 35 per cent. The new rates took effect on Apr 27.

US, Icelandic and Norwegian nationals have been less avid buyers of property in Singapore, compared with Chinese and Malaysians. Nicholas Mak, chief research officer at real estate platform Mogul.sg, explained that Americans play a smaller role among foreign buyers because they typically gravitate towards property within the US or in the UK.

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The timing of the announcement on the latest cooling measures comes ahead of a general election due by 2025. With housing a hot issue, authorities raised taxes for buyers of higher-value properties in the latest Budget.

At the recent launch of condominium Blossoms by the Park, four units were sold to US buyers and four to Chinese, said Lim Yew Soon, managing director of developer EL Development. The launch came two days after the new ABSD rates came into effect. BLOOMBERG