SINGAPORE: Property agency PropNex Realty has called for a reduction in the Additional Buyer’s Stamp Duty (ABSD) for foreigners purchasing high-end homes in Singapore’s Core Central Region (CCR). The agency proposes halving the ABSD rate from the current 60% to 30% for luxury properties priced above $5 million.
PropNex argues that this adjustment is critical to rejuvenating the luxury home market, which has been significantly impacted by the ABSD increase introduced in 2023.
Foreign buyers, traditionally a key demographic for high-end CCR properties, have pulled back due to the higher costs, leading to a decline in market activity. PropNex believes that a reduced ABSD rate could rekindle foreign interest without affecting local demand, thereby boosting the segment.
The agency has also called for an increase in the Mortgage Servicing Ratio (MSR) for ECs from 30% to 40%.
PropNex highlighted that EC prices have doubled since 2013, yet the MSR has remained unchanged, creating affordability challenges for potential buyers. This adjustment, according to PropNex, would better reflect current market realities and ease financing constraints for EC purchasers.
PropNex further recommends harmonising ABSD remission policies for HDB upgraders to private properties.
Currently, HDB owners must pay ABSD upfront when upgrading and subsequently apply for a refund, provided they sell their HDB flat within six months. In contrast, buyers of ECs are exempt from this upfront payment.
The agency suggests extending the same exemption to HDB upgraders, citing the financial burden of paying ABSD upfront as a significant hurdle for families transitioning to private housing.
This policy change, PropNex claims, would alleviate financial strain, reduce unnecessary rental expenses, and minimize disruptions from temporary housing arrangements.