Foreigners who buy homes in Marina South may be eligible for a lower ABSD.

Marina Gardens Crescent is now listed on the H1 2024 Government Land Sales programme’s reserve list. The plot can be used to develop residential or commercial properties. Developers who are willing to pay a minimum price for the site that could produce 775 homes can apply.

While we wait for the government to receive an acceptable future offer for Marina Gardens Crescent in the near future, efforts could be made to boost demand for that site.

To rekindle foreign buyer interest, the Government could lower Additional Buyer’s stamp duty (ABSD) for foreigners outside of Singapore who purchase homes in certain areas. Marina South, Sentosa or parts of Downtown Core may be areas less attractive to locals who are looking to purchase homes for their own occupation.

Could ABSD for foreigners that are not SPRs who purchase homes in this area be reduced to 30% from 60%?

Homebuying By Foreigners

Foreigners from outside the SPR who purchased private houses in 2023 fell by around a third when compared with the year prior.

Using data from URA Realis dated February 14, 623 foreigners (non-SPR) lodged caveats in 2023 for private homes in Singapore, excluding executive condominiums. This is compared with 934 in the year 2022; 1,120 in the year 2021; 745 in 2020; 1,005 in 2019; and 1,225 in 2018

The number was down from 477 for the first six-month period. The percentage of foreigners who lodged ECs and caveats for their private homes in H22023 fell from 4.9 to 1.5 percent.

Foreign buyers who are not SPRs face a hike in ABSD.

ABSD has been introduced in December 2011 and the ABSD rate is now 60% for non-SPRs. Last year it was increased from 30 to 60 percent, with effect as of April 27, 2020.

Some non-SPR foreigners pay no ABSD. Singapore citizens and permanent residents who are nationals or permanent residents of Iceland Liechtenstein Norway Switzerland and the US can enjoy the same stamp-duty treatment as Singaporeans under the respective free trading agreements with these nations.

The Urban Redevelopment Authority rejected the single bid of S$770.5M or S$984/sqft per plot ratio for the Marina South site, Marina Gardens Crescent, because the price was too high.

Marina Gardens Crescent could have been overlooked by developers due to uncertainty over the housing market in the Marina South region.

Lack of local schools around the area may hinder demand from locals to buy future homes in Marina South. Developers could also worry that the demand from foreigners (who are not Singapore permanent resident (SPRs), and investors) for homes will be lackinglustre.

Singaporeans do not have to pay ABSD on their initial home purchase.

Non-SPRs who buy homes in Canada from countries like China, Indonesia and India will pay 60% ABSD.

It is clear that policies governing private housing markets should favor locals buying their very first home.

Excessive foreign purchases of private homes in the country can distort markets and make it difficult for locals achieve their aspirations to own private homes.

cide to deepen Singapore’s ties by becoming SPRs or Singapore citizens.

Secondly, non-SPR citizens may choose to rent out their houses here. Rents are competitive and tenants have a variety of options.

Third, non SPR foreigners that buy here homes contribute to tax revenue.

Homeowners are required to pay property taxes as well as transaction taxes when purchasing a new home. The BSD rates are graduated. Residential property taxes are also higher for non owners than for homeowners, and on more expensive properties.

If 100 foreigners, who do not reside in the SPR, buy 100 houses for S$3,000,000 and pay ABSD each, then BSD plus ABSD will total approximately S$102,000,000. ABSD is 30%.

The Budget 2024 included some positive news for home owners, buyers, and developers. If there are reasons to lower ABSD for non-SPRs buying homes in specific areas, perhaps the government can announce a similar change outside of budget 2024.

By lowering ABSD in some areas for foreigners that aren’t SPR, you could risk making those areas hotspots to buy homes by these foreigners. The ABSD could allow non-SPRs to purchase homes in measured steps if it is set at 30%.

Singapore can show that it is open to foreigners by offering lower ABSD for non-SPRs who buy homes in certain areas. This will help demonstrate Singapore’s internationalism at a time where many countries are moving inward. Tax revenue collection can also be improved. It can also increase the speed of development for areas such as Marina South.

Having non SPRs make up less than 5% of all private house transactions (excluding ECs) should not have a significant impact on the market.

While the locals’ private homeownership dreams can be achieved as long the government ensures an adequate supply and the economy is growing, they will also continue to have the ability to do so as long the government works towards ensuring a sufficient supply of private housing.

Benefits to foreigners who buy homes

botany at dairy farm pricing

However, foreigners from outside the SPR can benefit by purchasing a home here.

Singapore aims to attract talent from around the world. It is in the interest of the economy to attract top talent. The economy benefits when top global talent comes to the country.

Non-SPRs who own properties here can spread the Singapore story within their networks and in their countries of origin.

In addition, purchasing a home can help talented non SPR foreigners familiarize themselves with Singapore. Some of them may then de

Add Comment

Your Email address will not be published

error: Content is protected !!
Call for Showflat Appt.