The Singapore Ministry of National Development say to pre-empt a bubble from forming in the private homes sector, they will impose a “Seller’s Stamp Duty” on all residential properties and residential land bought after 19/2, and sold within one year from the date of purchase. The housing loan limit will also be capped at 80% down from the current 90%. The Government says that these 2 new measures to cool the property market and ensure a stable and sustainable property market.
Dream on!
In theory, the “Seller’s Stamp Duty” is a good idea but the Ministry of National Development destroyed their own good idea with “sold within one year from the date of purchase” caveat. What is 1 year in the property market? Most buyers flip properties after 1 year, some even after 3-5 years. With the one year caveat, the “Seller’s Stamp Duty” is practically useless. Only a few days after the announcement, property agents are already saying the new rules will have minimal impact to the market.
They are right because even a property layman like me can see that the new rules are half-hearted at best. Last September, the Singapore Government introduced some anti-speculative measures to cool the property market which failed. These new rules will also almost certainly fail as well.
With all these failures, I can’t help but ask, “Just how serious is the Singapore Government in cooling down the property market?”
3 comments:
Just before we forget, our GLCs happen to be also involved in some of the biggest property developments in Singapore eg. Keppel Land, Capitalaland, JTC, Sentosa Corp. etc.
It would be naive to think that our PAP Govt is really that sincere in curbing the speculation of property and land prices when they happen also to have the largest land bank in Singapore ?
Not especially when the Ministers' salaries are directly linked to GDP which in turn is also linked to the sale of public land for to private developers.
Maybe we can pose a question to that idiot Minister Mah Bow Tan and see whether he can answer this question : Who are the real benefiaries when property and land prices escalate ?
Well, assuming that the speculator wants to avoid the sellers' stamp duty (SSD), he would only flip it after one year. Prior to the introduction of the SSD, the same capital could have be used to buy/sell several properties in the course of one year (after taking the buyer's stamp duty into acct).
My take is that the move will deter speculators with smaller pockets and risk appetites; the big fish (including GLCs) who have holding power will not be affected.
Which is a bit disappointing because I think that investment properties owned by local middle class families is not a bad thing; what we want to avoid are foreign speculators who play havoc with our property market and have no other stake in Singapore's future. IMO, the anti-speculation measures should have been aimed at this 2nd group.
Frank Lee
To Frank Lee,
I'm afraid I have to disagree with you on the sellers' stamp duty detering small speculators. Wvwn before the seller's stamp duty, the earliest they can flip the property would be about 6 months. Asking them to hold for another 6 months will not affect it too much. You are right however when saying the big fish will not be affected.
The main thing is that no one seems to believe these curbs will have any affect on property prices, which leave you to wonder why the government bother with them in the first place.
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