The additional buyer stamp duty (‘ABSD’) is a type of cooling measures to prevent a property bubble from occurring. It remains as an important deterrent among foreigners and investors who are considering buying properties in Singapore.
The latest announcement on 26th April 2023 releases the new percentage hike of the additional buyer stamp duty, effective from 27th April 2023 onwards. Foreigners and entities or trustee purchases were greatly affected from 30% to 60% and 35% to 65% respectively.
The sudden surge in additional buyer stamp duty took a surprise to the real estate industry. Nevertheless, it was expected to a certain degree with the resilient rise in the property price index of 3.3% for Q1 2023.
I like to share certain important highlights which were discussed within our real estate industry from this sudden increase of additional buyer stamp duty.
1. Why the sudden increase?
To promote a sustainable property market. To prioritise housing in Singapore for owner-occupation. Therefore, rates were raised further to temporary manage the investment demand.
2. Shortage of population
With the declining of birth rates in Singapore, our population must maintain or improve with a form of foreign conversion. Therefore, the additional buyer stamp duty may also contribute to an indirect behaviour for foreigners to apply for permanent residency in Singapore.
3. To prevent a property bubble.
When purchasing a condo, don’t forget to assess budget, necessities, and wants. Based on my seven years of experience with this three-weighted probability of balance, I will be providing my views and opinions in this article. Despite this, please keep in mind what could drive up a condo’s price if you’re searching for price appreciation in the condo you’re purchasing. Future developments that will take place nearby the property are typically one of the factors that can influence price appreciation. For instance, the development of a brand-new MRT station, commercial malls, educational facilities, a desirable primary school, etc. A rise in the value of real estate may result from these improved facilities.
Advice to home buyers & Conclusion
With the recent release of the resale and property price index in Q1 2023. We can expect a wider price disparity between public housing and private residential properties in the future. Despite that, the costs and materials for construction have risen since covid inception in 2020 which may cause an increase for new properties in general.
Most definitely, foreigners and entities or trustee purchasers might put their plans on hold due to the effective deterrent that is additional buyer stamp duty. What about for the first-timers or first property buyers? Is this the right time for you to enter the market?
Drop me a call or WhatsApp me. I believe that the sharing of my team’s research into the insights will be beneficial for you or your family.