Singapore tightens private housing rules with new stamp duties to deter speculation
The revised rules apply to all private homes purchased from that date onwards. Sellers who offload their properties within the first year of purchase will now pay a 16 per cent stamp duty, up from the current 12 per cent. Properties sold in the second, third and fourth year will also be subject to progressively lower rates.
Previously, the SSD only applied for properties sold within three years.
'In recent years, the number of private residential property transactions with short holding periods has increased sharply,' said Singapore's Ministry of National Development, Ministry of Finance and Monetary Authority of Singapore in a joint statement issued late yesterday.
'In particular, there has been a significant increase in the sub-sale of units that have not been completed.'
Analysts told Bloomberg they were taken aback by the timing of the announcement, especially amid signs that price growth is already slowing.
'The latest move came as a surprise to us,' said Citigroup analyst Brandon Lee, citing soft demand in recent launches.
He suggested the Singapore government's intent is to target speculative activity, which could pick up as mortgage rates continue to fall.
According to preliminary figures released earlier this week, private home prices in Singapore rose 0.5 per cent in the second quarter — the third consecutive quarterly increase — despite sluggish new home sales.
Alan Cheong, executive director of research at Savills, said the move seemed 'puzzling'.
'Prices are already flattening so this is likely more based on vibes on the ground,' he reportedly said, adding that he expects new condominium sales to take a further hit.
The Singapore government has repeatedly intervened in the housing market over the years to rein in prices, including a major hike in levies for foreign buyers last year and tighter restrictions on the resale of public flats.
Housing affordability remains a hot-button issue in Singapore, especially in the wake of May's general election, where cost-of-living concerns loomed large.
The new stamp duties will not affect public housing owners, who are already required to live in their flats for a minimum number of years before selling.
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