Will the revised ABSD Remission lead to an en bloc sales surge?

Housing developers working on large and complex projects now have more time to sell their units. Under the revised Additional Buyer’s Stamp Duty (ABSD) remission scheme, developers will receive a sales deadline extension of six months to a year. This change, announced by Minister for National Development Desmond Lee on March 5, 2025, aims to provide greater flexibility for developers handling large-scale urban transformations.

Eligibility criteria for the ABSD extension

Not all projects qualify for this extension. Only developments that meet specific ABSD remission eligibility criteria will benefit. These include:

• Large en bloc redevelopments that:
  • Will yield at least 700 new units upon completion, or
  • Contain at least 1.5 times the number of homes in the previous development.
• Projects with complex technical or infrastructure requirements, such as:
  • Developments integrated with major public transport facilities.
  • Those requiring extensive conservation efforts.
• Strategic Development Incentive (SDI) projects.
• Projects using innovative construction technologies to improve productivity.

Developments falling into just one of these categories will get a 6-month extension. However, if a project meets multiple criteria, it will qualify for a full one-year extension. This adjustment applies only to residential land acquired on or after March 6, 2025.

Current ABSD regime and changes

Under the existing ABSD regime, developers must adhere to strict deadlines:

• Construction must begin within 2 years.
• All units must be completed and sold within 5 years.

The ABSD payable by developers remains at 40% of the land price, with:

• 5% paid upfront, which is non-refundable.
• 35% remittable, provided at least 90% of units are sold within 5 years.

Previously, developers had to sell 100% of units within the given timeline. The policy change introduced in the February 2024 Budget lowered this threshold, making it slightly easier for developers to obtain ABSD remission in Singapore.

What are the implications of the revised ABSD remission?

This extension provides much-needed flexibility for developers, reducing risks associated with large-scale projects. Mega developments, in particular, benefit from additional time to offload units, which is crucial given the scale and complexity of such ventures.

Older estates such as Braddell View and Pine Grove could take this opportunity to revisit en bloc attempts. These sites have the potential to introduce approximately 2,000 new homes. However, selling out such large projects within the extended 6- to 12-month timeframe may still prove difficult.

As a whole, the longer sales timeline might ease pressure on developers and their financial backers, providing more breathing room in an otherwise competitive market.

Will we see more en bloc sales due to the revised ABSD remission?

While some analysts think the ABSD remission could result in an en bloc market boost, especially for large collective sales, others believe a sharp increase in en bloc sales is unlikely remain due to several factors: 

• High redevelopment costs.
• A significant number of upcoming private housing units already in the pipeline.
• Potential policy shifts that may introduce new challenges.
• The success of an en bloc sale still depends on price negotiations between buyers and sellers, which are often difficult to resolve.
• Foreign buyers in prime areas face a 60% ABSD, reducing demand for high-end en bloc projects.
• High asking prices for collective sales make it difficult for developers to secure profitable deals. In contrast, state land supply remains competitively priced, making Government Land Sales (GLS) programmes a more attractive alternative for developers.

Overall, the ABSD remission changes are a step toward easing market pressures but are unlikely to trigger a major en bloc resurgence. However, for developers handling large-scale projects, the additional time offers a strategic advantage in navigating our ever-changing property landscape.