Separately, Mr Yip Hon Weng (Yio Chu Kang) asked if the Government will tighten the process involving “decoupling” by families or couples to acquire additional residential properties and avoid paying ABSD.
He also asked if the Ministry of Finance will tighten processes for foreign families who buy multiple properties under the names of different family members to avoid ABSD.
Responding, Deputy Prime Minister and Finance Minister Lawrence Wong said the Government “recognises that families and individuals may enter into various property purchase and ownership arrangements for different reasons and needs, and taking into account the tax and non-tax consequences.
“Depending on the arrangement, ABSD may be payable. Today, ABSD is tiered by property count for Singaporean citizen and permanent resident buyers. No ABSD applies for Singaporean citizen buyers purchasing their first residential property.
“Foreigners are liable for the highest individual ABSD rate of 60 per cent, regardless of the number of properties they own. So even if foreign families buy multiple properties under the names of different family members, they will still have to pay the ABSD of 60 per cent for each property,” Mr Wong said.
SINGAPORE - The recent round of additional buyer’s stamp duty (ABSD) hikes are not expected to have a significant impact on the commercial property market, National Development Minister Desmond Lee said on Wednesday.
This is because the drivers of the residential and commercial property markets are very different, Mr Lee said in a written parliamentary reply to questions on the latest ABSD revisions filed by Mr Liang Eng Hwa (Bukit Panjang), Mr Shawn Huang (Jurong GRC) and Mr Chong Kee Hiong (Bishan-Toa Payoh GRC).
He added: “Demand for commercial properties tends to be driven by business considerations, and commercial property transactions are generally of much higher value than for residential properties. Individual buyers make up nearly all of the residential property market but only about 10 per cent of the commercial property market.
“Historically, commercial property prices and transaction volumes have also remained stable in the period following past increases to the ABSD rates.”
The fourth round of ABSD hikes since 2011 are aimed at preventing property prices from being pushed up by investors and prioritising Singaporeans buying homes for owner-occupation.
The authorities announced on April 26 that the ABSD rate for foreigners buying any residential property in Singapore will double to 60 per cent from 30 per cent.
For Singapore citizens, the rate will be raised from 17 per cent to 20 per cent for those buying their second residential property, and from 25 per cent to 30 per cent for those getting their third and subsequent property.
Singapore permanent residents (PRs) buying their second residential property will see the rate rise from 25 per cent to 30 per cent, and from 30 per cent to 35 per cent for third and subsequent properties.
The new property curbs also come as private home prices jumped 3.3 per cent in the first quarter of 2023, after rising 0.4 per cent in the fourth quarter of 2022.
Foreign interest in Singapore residential property, as an asset class, is rising again, even though earlier cooling measures and border closures over the past two years had helped moderate it.
On concerns over rising rental prices and the impact on business costs, Mr Lee said: “We do not expect the recent ABSD revisions to have a significant impact on the rental market.
“The vast majority of foreigners working in Singapore rent their homes and will not be affected by the recent ABSD revisions,” he said.
“The tight supply conditions brought on by the pandemic had led to an exceptional imbalance in the rental market. However, we expect to see signs of easing, with a large number of new residential units being completed over the next few years.
“We are expecting 40,000 home completions this year – the highest in the last five years – and about 100,000 completions by 2025. Households temporarily renting while awaiting the completion of their new homes will also move out of their rental units and into their new homes.
“We therefore expect pressures in the rental market to ease with this large supply entering the market, and we already see early indications that rental demand is abating. This will moderate rent increases in the coming quarters,” Mr Lee said.