The Singapore government just announced additional buyer stamp duties (ABSD) to be imposed on foreign and multi-property buyers effective December 8, 2011.
1st time foreign buyers have to pay an additional 10 percent ABSD. Singaporeans buying 3rd property and PRs buying 2nd property have to pay 3 percent more on ABSD.
This is on top of the inflated seller stamp duties announced on January 14 this year.
If you are a foreigner/corporation buying a property and selling within the first year, you will be paying 13 percent buyer stamp duty and 16 percent seller stamp duty.
Implication: Unless prices jump 30 percent in a year, you can hardly make any money.
To be fair, the majority of buyers are not foreigners. They are Singapore citizens or PRs.
According to the 2010 census, foreigners make up 25 percent of the population.
However, only 12 percent of property buyers in 2010 and 16 percent in 2011 1H are foreigners.
Of that 12 or 16 percent, a proportion of these ‘foreigners’ may not reside in Singapore.
That’s not counting the fact that the number of approved PR applications in 2010 has been halved from 2009 and is only a third of the number in 2008. More foreign property buyers could have been PRs!
These days it’s not the foreigners who are buying. It’s the Singaporeans who are chasing after the newly-launched ECs.
The familiar scene reminds me that, before the burst of a bubble, how late comers jump at the bandwagon, afraid of being left behind.
Just because the flats are launched under the government’s plan doesn’t mean that it’s time to buy and the units cannot be overpriced.
Look at the buying spree of luxurious condos in prime districts that has slowed down a lot this year.
If the property market is so promising, why the hassle of ERA hiring so many ‘part-timers’ to queue at CapitaLand’s Bedok Residences launch to make up such demand hype?
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