Publicly listed S'pore developers to be exempted from QC regime: MinLaw, SLA

THE Ministry of Law and the Singapore Land Authority (SLA) on Thursday announced that it will allow for the exemption of publicly-listed housing developers with a "substantial connection to Singapore" from the Qualifying Certificate (QC) regime.

This is an answered prayer for publicly-listed developers which have for a long time bemoaned the fact that they are subject to stringent timelines and penalties like their foreign counterparts, despite the fact that they are local firms.

This is because under the Residential Property Act (RPA), a Singapore company is defined as one that is incorporated in Singapore, and all its directors and shareholders are Singapore citizens or Singapore companies.

This definition means that publicly-listed housing developers that are essentially Singaporean will not be considered a Singapore company, as long as they have just one foreign shareholder.

A housing developer that is a Singapore company is not subject to the QC regime.

The QC regime requires developers to complete their developments within five years and dispose of all units within two years of completion. This is to prevent land hoarding and ensure that housing developers build and sell the residential land.

The authorities said this rule change will "better align the QC regime and the objectives of the RPA".

Publicly-listed housing developers can apply for exemption from the QC regime, and will be assessed according to the following criteria:

- Incorporation in Singapore;

- Primary listing is on the Singapore Exchange and the principal place of business is Singapore;

- The chairperson and the majority of the company's board are Singapore citizens;

- A significantly Singaporean substantial shareholding interest in the company, and;

- Track record in Singapore

The changes will kick in with immediate effect and be reflected in legislation later this year. Applications may be submitted to the Controller of Residential Property.

The authorities said the government is making no changes to the existing property market cooling measures, which were put in place to keep private residential price increases in line with economic fundamentals.

In particular, all housing developers continue to be subject to the prevailing Additional Buyer's Stamp Duty (ABSD) regime, which requires, among other conditions, developers to develop the residential site they acquire and sell all units within the new project in five years from the date of purchase to qualify for an upfront remission of ABSD based on the purchase price of the land.

Should a developer fail to do so, it will have to pay the 25 per cent ABSD with interest (or 30 per cent including an additional ABSD of 5 per cent that is non-remittable). This has been raised from 15 per cent since July 2018.