{"id":65295,"date":"2023-05-05T18:26:26","date_gmt":"2023-05-05T10:26:26","guid":{"rendered":"https:\/\/www.99.co\/singapore\/insider\/?p=65295"},"modified":"2023-05-05T18:26:26","modified_gmt":"2023-05-05T10:26:26","slug":"singapore-stamp-duty-rates-highest-foreigners-buying-homes","status":"publish","type":"post","link":"https:\/\/www.99.co\/singapore\/insider\/singapore-stamp-duty-rates-highest-foreigners-buying-homes\/","title":{"rendered":"Singapore ranks No. 1 in the world for highest stamp duty rates on foreigners buying homes"},"content":{"rendered":"
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The Additional Buyer\u2019s Stamp Duty (ABSD)<\/a> rate hike last week was perhaps the most punitive for foreigners planning to buy a home in Singapore.<\/p>\n

Among the rate increases announced<\/a> late Wednesday night on 26 April 2023, the hike for foreigners was among the highest at 100%, doubling from 30% to 60% on any residential property purchase from 27 April 2023 onwards.<\/p>\n

Foreigners accounted for 7% of private home sales in Q1 2023<\/h2>\n

According to Minister for National Development Desmond Lee, the ABSD increases were aimed at dampening investment demand<\/a>. This is especially as home prices have been at an all-time high for the past couple of years, with private home prices up by 3.3% in the first quarter of 2023, after a 0.4% increase in the previous quarter.<\/p>\n

The minister also noted that while the proportion of private property transactions by foreigners has fallen from 20% in 2011 to 3% to 4% in the last few years after cooling measures were introduced, it has started increasing again to 7% in the first quarter of 2023.<\/p>\n

Property analysts have also highlighted the increase in foreign buyers recently, with Lee Sze Teck, Senior Director of Research at Huttons Asia, adding that foreigners made up 3.1% of private home sales in the first quarter of 2022.<\/p>\n

60% ABSD for foreigners buying residential properties in Singapore<\/h2>\n

The ABSD was first introduced in 2011 to cool down the property market, with foreigners slapped with a 10% rate<\/a> on any residential property purchases.<\/p>\n

Since then, there have been four hikes, with the latest one the highest, increasing from 30% to 60%.<\/p>\n

\"absd<\/a><\/p>\n

This stamp duty is paid on top of the Buyer\u2019s Stamp Duty (BSD)<\/a>, which is payable on any property purchases, regardless of nationality and residency status. The government also raised the BSD earlier in February for homes above S$1.5 million.<\/p>\n

With the 60% ABSD and the BSD, Singapore now ranks the highest in the world for total stamp duty for foreigners buying a home, according to Savills.<\/p>\n

\"singapore<\/a><\/p>\n

For a USD$2 million property purchase in Singapore, the total stamp duty rate will come up to around 64% of the purchase price.<\/p>\n

The study assumes that the property will be used as a second home for less than nine months of the year over a five-year hold. No capital growth has been applied to avoid the complication of having to forecast that for each city.<\/p>\n

\"stamp<\/a>
Source: Savills. The study assumes a non-resident overseas buyer purchasing a $2 million property (which in the UK equates to \u00a31.6 million at April 2023 exchange rates). This is for use as a second home for less than nine months of the year over a five-year hold. No capital growth has been applied, avoiding the complication of having to forecast that for each city.<\/figcaption><\/figure>\n

In fact, this is double the total stamp duty rate payable by a foreigner for a similarly priced property in Hong Kong (31.3%), notorious for its sky-high home prices.<\/p>\n

\"hong<\/a><\/p>\n

Savills noted that the prime residential prices in Singapore have remained strong, supported by the strong Singapore dollar and inflow of high-net-worth individuals setting up companies and family offices.<\/p>\n

\u201cAlthough Singapore has the highest stamp duty payable by foreigners buying private residential properties, it is a testament of Singapore\u2019s attractiveness as a safe haven pad for ultra-high-net-worth individuals<\/a>,\u201d says Alan Cheong, Executive Director of Research & Consultancy, Savills Singapore.<\/p>\n

Condos above 2,000 sq ft for sale<\/h4>\n
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