Singapore (Commonwealth Union)_ In an effort to calm the city-state’s housing market, the Singaporean government has doubled the stamp duty for foreigners purchasing a home in the city-state. This move is also part of the government’s major attempt to maintain a sustainable property market and prioritize housing for owner-occupancy. The revised rates for stamp duty took effect on April 27, 2023.
Under the revised rates, foreigners buying a home in Singapore will now have to pay a stamp duty of 60%, double the previous rate. For Singaporean citizens, the government has increased the tax from 17% to 20% when buying a second residential property, while it has been raised to 30% for those buying their third or subsequent home. Permanent residents purchasing a second residential property will also have to pay the same rate.
However, Singaporean citizens buying their first residential property will no longer have to pay any stamp duty. Further, married couples with one Singaporean spouse who jointly purchase a second residential property can apply for a refund of the stamp duty, subject to certain conditions, including selling their first residential property within six months of purchasing the second one.
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The government’s move to increase stamp duty rates for foreigners is the latest in a series of measures to maintain a sustainable property market in Singapore. In December 2021, the government imposed tax increases, and in September 2022, it tightened home-loan limits. However, according to the government’s statement, despite these measures and global slowdowns caused by rising inflation and interest rates, Singapore’s real estate prices have remained robust, showing renewed signs of acceleration last quarter.
According to the government, “Demand from locals purchasing homes for owner-occupation has been especially strong, and there has also been renewed interest from local and foreign investors in our residential property market”. However, the government has expressed concerns that if left unchecked, property prices could increase at a faster rate than the economic fundamentals, posing a risk of sustained price increases relative to incomes. Therefore, the government has taken this step to cool down the housing market and promote a sustainable property market.
