Following the most recent parliament sitting, our social media feeds have been inundated with articles about Grace Fu asking Sylvia Lim to apologise to parliament. Amidst all the brouhaha, we take a look at some of the latest property updates which were discussed during the parliament sitting.
No time bar for divorcees who want to buy subsidised flats
As announced by National Development Minister Lawrence Wong, HDB is officially removing its three-year time-bar policy for divorcees to buy subsidised flats. Prior to this, only one party of a divorced couple would be eligible to buy or own a subsidised flat within three years from the divorce. After the latest policy change, both parties will be able to buy or own a subsidised flat upon divorce – as long as they can meet the standard criteria that all applicants are subject to.
According to Mr Wong, this move stems from an understanding that there is a “diverse range of home-buyers”, including second-timers, singles, divorcees and single unmarried parents; the hope is that removing the time bar will enable divorcees to make a “smoother housing transition”.
New stamp duty rule on residential property transactions involving share sales
Residential property transactions which involve the transfer of the equity interest (instead of a direct purchase) are now subject to higher stamp duty. Second Minister for Finance Lawrence Wong says that the aim is not to affect the ordinary buying and selling of shares in listed companies by retail investors – but rather, to align the stamp duty levied on residential property transactions through transferring equity interest with the stamp duty levied on direct property transactions.
Before the new stamp duty rule, a direct purchase of residential property would incur stamp duty of 3%, while the buying of shares in a firm which owns the property would incur share duty tax of only 0.2% of the firm’s net asset value.
Under the new rule, buyers who purchase residential property through share transfers will incur a new additional conveyance duty (ACD). This will be made up of a flat 15% levy on the value of the underlying residential properties, plus an extra 1-3% levy which is intended to mirror the buyer’s stamp duty.
Government will continue to review property tax “closely”
According to Mr Yee Chia Hsing of Choa Chu Kang GRC, the Government has prioritized making property tax more progressive over the past decade. Amongst other things, the latest Budget saw the top marginal buyer’s stamp duty rates for residential properties worth more than $1 million being increased by 3% to 4%. While there were no changes to property tax rates announced in the latest parliament sitting, it’s been said that the government will “continue to review this area closely”.
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