Singapore’s new property tax won’t hurt these foreign buyers

SINGAPORE, May 12 (Bloomberg): Property buyers of certain nationalities including the US are exempt from Singapore’s recent tax hike for foreigners.

Nationals from the US, Iceland and Norway, among others, are accorded the same stamp duty treatment as Singapore Citizens. This policy - based on respective free trade agreements - came into operation in 2013.

The groups have been less avid buyers of property in the city-state compared with Chinese and Malaysians.

Americans play a smaller role among foreign buyers because they typically gravitate toward property within the US or in the UK, according to Nicholas Mak, Chief Research Officer at real estate platform MOGUL.sg.

In new measures that took effect April 27, foreigners will pay 60% tax on any residential purchase, while the rate for using an entity or a trust was raised to 65%, preventing any circumvention of the rules.

The timing of the announcement comes ahead of a general election due by 2025. With housing a hot issue, authorities raised taxes for buyers of higher-value properties in the latest budget.

The tax changes were made "to dampen both local and foreign investment demand, so as to prioritize local owner-occupation demand,” the Ministry of National Development said in an emailed statement. "Foreigners purchasing residential property in Singapore come from a wide range of countries.”

At the recent launch of condominium Blossoms by the Park, four units were sold to US buyers and four to Chinese, according to Lim Yew Soon, managing director of the developer EL Development Pte.

The launch came two days after the new stamp duties took effect. - Bloomberg