Singapore’s luxury homes set to boost demand amid UK tax change

SINGAPORE: A possible change in the tax status of around 74,000 non-domiciled (non-dom) UK residents could benefit Singapore’s luxury residential market, as reported by the Singapore Business Review.

The UK government’s plan to abolish the non-domiciled (non-dom) tax status, effective April 6, 2025, will mean non-doms must pay tax on all foreign income and gains.

Huttons pointed out that Singapore is one of the countries being considered by these wealthy individuals, along with Dubai, Italy, and Switzerland, as they look to relocate and protect their assets. 

Huttons added that this change in the UK tax rules is expected to draw ultra-wealthy foreign residents to Singapore, where they may set up family offices, apply for citizenship, or invest in real estate.

The Singapore property firm also noted that in the third quarter of 2024 (Q3), many newly naturalised Singaporeans and Permanent Residents (PRs) inquired about purchasing luxury non-landed homes.

According to Huttons, the rise in foreign interest follows Singapore’s 60% Additional Buyer’s Stamp Duty (ABSD) introduced in April 2023.

This tax has encouraged more foreigners to apply for Permanent Residency (PR) and citizenship, with many purchasing luxury non-landed homes once their PR or citizenship is approved.

In total, 55 luxury non-landed homes valued at S$407.7 million were sold in Q3 2024, although sales saw a slight dip of 3.5% and 15.5% compared to the previous quarter.

However, when compared to the same period last year, the figures for Q3 2024 were higher. Luxury home rents also increased, likely due to ultra-high-net-worth individuals (UNHNWIs) moving towards safer investments amid global uncertainties and geopolitical tensions.

Rental prices for luxury non-landed homes also rose by 2.7% quarter-on-quarter (QoQ), reaching S$14,932 a month.

In the Good Class Bungalow (GCB) market, transactions also increased, with 12 sales recorded in Q3 2024, up from eight in the previous quarter. The total value of GCB sales in Q3 hit S$541.2 million, an 80.9% increase from the previous quarter.

Looking ahead to Q4, Huttons expects higher sales and rental activity in the luxury non-landed homes market and ongoing interest in the GCB market as price expectations stabilise. /TISG

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