SINGAPORE:

In a bold move to revitalize the luxury home market in Singapore’s Core Central Region (CCR), PropNex Realty has called for a significant overhaul of the Additional Buyer’s Stamp Duty (ABSD) imposed on foreign buyers. The property agency is advocating for a reduction of the ABSD rate from a staggering 60% to a more palatable 30% for high-end properties priced above $5 million.

This proposal comes on the heels of the ABSD increase implemented in 2023, which has led to a noticeable downturn in market activity. Foreign investors, who have historically been crucial players in the purchasing of luxury CCR properties, have been deterred by the soaring costs, causing a slowdown in transactions. By halving the ABSD, PropNex believes it can stimulate foreign interest while simultaneously ensuring that local demand remains unaffected, potentially breathing new life into the luxury market.

Additionally, PropNex is urging the government to increase the Mortgage Servicing Ratio (MSR) for executive condominiums (ECs) from the current cap of 30% to 40%. With EC prices skyrocketing—having doubled since 2013—this adjustment would reflect the evolving economic landscape and help alleviate the financial constraints potential buyers face when securing financing.

Another key recommendation from PropNex is the harmonization of ABSD remission policies for homeowners transitioning from Housing and Development Board (HDB) flats to private properties. At present, HDB owners are required to pay the ABSD upfront when upgrading, with the possibility of a refund only if they sell their flat within six months. In contrast, buyers of ECs enjoy an exemption from making this upfront payment, creating an uneven playing field for HDB upgraders.

By extending the same exemption to HDB owners, PropNex argues that the financial burden would be eased. This change would not only alleviate stress for families moving to private housing but would also help reduce unnecessary rental costs and disruptions associated with temporary living arrangements.

As Singapore's luxury property market navigates these challenging waters, industry experts are keeping a close eye on how these proposed changes may reshape the landscape, making it imperative for policymakers to consider the implications of such adjustments. Will these proposed measures succeed in invigorating the luxury segment? Only time will tell, but one thing is clear: PropNex is ready to advocate fiercely for what it sees as necessary changes for the future of the Singapore real estate market.