In a strategic move to manage the real estate market and ensure housing affordability for local residents, Singapore has significantly increased the Additional Buyer’s Stamp Duty (ABSD) for foreign property buyers. The ABSD rate for foreigners has been raised from 20% to 30%, effective immediately.
Purpose of the Policy Change
The primary aim of this policy change is to cool the property market and curb speculative buying by non-residents. Over recent years, Singapore's property market has experienced substantial growth, driven in part by foreign investments. This surge in demand has contributed to rising property prices, making it increasingly difficult for Singaporean residents to afford homes.
Impact on the Real Estate Market
Cooling Measures: The increase in ABSD is expected to reduce speculative demand from foreign buyers, which will help stabilize property prices.
Affordability for Locals: By controlling foreign investments in the property market, the government aims to make housing more affordable for Singaporean residents.
Market Dynamics: The policy might lead to a short-term dip in property transactions involving foreign buyers, but it is expected to stabilize the market in the long run.
Additional Measures
Alongside the increase in ABSD, Singapore has also implemented other measures to ensure a balanced property market:
Tighter Loan-to-Value (LTV) Limits: This measure will restrict the amount of money that buyers can borrow, thereby reducing the risk of property bubbles.
Monitoring Speculative Activities: Authorities are keeping a close watch on speculative activities to prevent market overheating.
Background and Rationale
Singapore has a long-standing policy of implementing cooling measures to ensure sustainable growth in its property market. The previous increase in ABSD from 15% to 20% for foreign buyers was introduced in 2018. The current hike to 30% is a continuation of this approach, reflecting the government's commitment to maintaining market stability and protecting the interests of local homebuyers.
Future Outlook
Experts predict that while the higher ABSD might deter some foreign investors, Singapore will continue to be an attractive destination for long-term investors due to its strong economic fundamentals, political stability, and high quality of life.
For those considering purchasing property in Singapore, it is advisable to stay informed about the latest regulatory changes and seek professional advice to navigate the evolving landscape.
Conclusion
Singapore's decision to increase property taxes for foreign buyers underscores its proactive approach to managing the real estate market. By prioritizing housing affordability for residents and curbing speculative investments, the government aims to ensure a stable and sustainable property market for the future.
How to Obtain Residency in Singapore
Permanent Residency (PR):
Economic Contribution: Foreign investors and business owners can apply for PR through the Global Investor Program (GIP). This requires significant investment in Singapore-based businesses or funds.
Employment Pass Holders: Skilled workers on Employment Passes can apply for PR after working in Singapore for a certain period.
Work Visas:
Employment Pass (EP): For foreign professionals, managers, and executives earning a minimum salary and possessing relevant qualifications.
S Pass: For mid-level skilled staff with a lower minimum salary requirement compared to the EP.
If you want more information about Investment Abroad and its opportunities to develop business, contact us today! Below this article, you will find a link to set up a free ten-minute consultation with us to discuss your options further.
Also, if you want to access our other great content, subscribe to our YouTube channel! At Creimerman, our team of professional global citizens would be happy to help you with your personal or professional cross-border ventures and help make them a success.