SINGAPORE: In a bold move to rejuvenate the struggling luxury home market, property agency PropNex Realty is advocating for a significant reduction in the Additional Buyer’s Stamp Duty (ABSD) for foreign investors looking to purchase high-end properties in Singapore’s prestigious Core Central Region (CCR). The agency suggests slashing the current ABSD rate from a staggering 60% to a more palatable 30% for luxury homes priced over $5 million.

The request comes on the heels of an ABSD increase imposed in 2023, which has dramatically curtailed interest from foreign buyers—typically a vital segment for CCR real estate. This reduced foreign investment has led to a noticeable decline in market activity and property sales, prompting PropNex to argue that a lower ABSD rate could reignite foreign interest while simultaneously ensuring that local demand remains unaffected.

In addition to advocating for changes to the ABSD, PropNex is calling for an adjustment in the Mortgage Servicing Ratio (MSR) for Executive Condominiums (ECs), proposing an increase from the current 30% to 40%. With EC prices having doubled since 2013 without any change in the MSR, PropNex has raised concerns about the growing affordability issues faced by potential buyers, asserting that this alignment will better reflect the realities of the current property market and help ease financial burdens for those purchasing ECs.

Furthermore, PropNex is urging the government to revise its ABSD remission policies, particularly for HDB owners upgrading to private properties. Currently, homeowners must pay ABSD upfront when they move from HDB to private sectors, although they can apply for a refund after selling their HDB flat within six months. EC purchasers, in contrast, enjoy an exemption from paying the upfront charge. PropNex’s proposal includes extending the same exemption to HDB upgraders, helping to alleviate financial pressures and reducing unnecessary costs associated with temporary housing arrangements during the transition to private properties.

As the luxury segment struggles amidst shifting market dynamics, PropNex’s recommendations aim not only to enhance affordability and accessibility but also to stimulate overall activity within Singapore’s real estate landscape. With rising interest rates and economic uncertainties, stakeholders are keenly watching how these proposed changes could reshape the high-end market and attract foreign investors back to Singapore. Will these changes revive the luxury property scene? Only time will tell!