You can lower the ABSD if foreigners buy a home in Marina South or other areas.

Benefits of foreigners purchasing homes

There are still benefits for foreigners who don’t hold SPR visas to buy homes in the SPR.

Singapore is first attempting to attract global talent. By attracting top talent, the economy benefits. It is easier to attract top talent from around the world to come and live, work and enjoy themselves in Singapore if non-SPR citizens are not subjected too many restrictions when buying a home.

Non-SPR Foreigners who own property here can help to spread the Singapore Story in their homelands as well as within their network.

The purchase of a property here will also allow talented foreigners, who aren’t SPRs, to get familiarized with Singapore. Some of these people may later deepen Singapore ties, and even become Singapore citizens or SPRs.

The Marina Gardens Crescent site may have been a target for developers who were cautious due to the uncertainty surrounding housing demand.

Locals may be less interested in future homes in Marina South if there are no local schools nearby. Developers might also fear that foreigners and investors who are not Singapore Permanent Residents (SPRs), or those who do not own homes, may be less interested in buying a home.

Marina Gardens Crescent plot which is suitable for both residential development and commercial expansion has been placed on the reserve list under the H1 2024 Government Land Sales Program (GLS). Developers may apply to sell the land, which is expected to generate approximately 775 homes for private use, at a price the government will accept.

While we await to see if a government-acceptable offer will be forthcoming for the Marina Gardens Crescent property in the future, maybe efforts should made to increase the demand for this site.

To stimulate foreign buyers, the government might consider lowering stamp duty rates on homes purchased by foreigners not registered in Singapore. Marina South and Sentosa are two areas where locals may have a harder time buying homes to live in.

Could ABSD rates on foreigners not SPR who buy properties in these locations, be reduced by half from 60 to 30 percent?

Homebuying by Foreigners

The number of non-SPR foreigners purchasing private homes fell by approximately one-third between 2023 and the previous year.

According to URA Realis data on 14th February, there were 623 caveats filed by foreigners not belonging to the SPR for private residences here in 2023 (excluding executive condominiums, or ECs). This compares with 934 in 20,22, 1,120 2021, 745 2020, 1,005 2019 and 1,225 2018

The number of non-SPR foreigners lodging caveats in H2 was 146. This is down from the 477 lodged in the first six month. The number of non-SPR aliens who lodged caveats in respect to private homes, excluding ECs in H2 2020, fell from 477 in the first six months.

You can blame the increase in ABSD on foreigners who do not have SPR.

ABSD rates for foreigners who are not SPR citizens have risen dramatically since ABSD was implemented in December 2011. Most recently, it was raised from 30% to 60% with effect on April 27, 2023.

Some non-SPR foreigners pay no ABSD. Singaporeans and permanent residents from Iceland, Liechtenstein (Norway), Switzerland, Switzerland, and the US are treated the same as Singaporeans in terms of stamp duty under the respective free trade agreements with these countries.

Singapore citizens do not pay ABSD when they buy their first house. They will only pay 20 percent on their second home purchase, 30 percent on the third.

When buying a home in the United States, non-SPRs, such as Chinese, Indonesians and Indians, will pay 60 percent ABSD.

The policies that govern private housing should certainly favour locals purchasing their first home.

The excessive purchase of private properties by foreigners can cause a market distortion and make it more difficult for the locals to realize their dream of owning a private residence.

watten house pricing

Second, non-SPR residents may rent their homes in the country. There is a large supply of private rental houses for foreigners working or studying in Singapore as well locals who want to rent a house. This gives tenants a choice and allows them to get rented at competitive prices.

Third, the foreigners who purchase homes in this country but are not SPRs contribute to tax revenues.

Property taxes are paid by homeowners who purchase a home. Rates of the Buyer’s Stamp Duty. The residential property tax rate is higher for non owner-occupants than for owners-occupants, and also for more expensive homes.

If foreigners who are not SPR citizens buy 100 homes at S$3 million per home and pay ABSD then the amount collected for BSD and ABSD is approximately S$102,000,000. This assumes ABSD of 30%.

Budget 2024 had some good news for homeowners, homebuyers, and housing developers. Since there are valid reasons for lowering ABSD rates on non-SPR foreigners purchasing homes in some areas, the government may announce a change other than Budget 2024.

The risk of lowering ABSD rates for non-SPR internationals in some areas is that these areas will become hotspots where foreigners buy homes. If the ABSD rate was 30 percent, non-SPR foreigners would be able to buy homes in a more measured manner.

Singapore’s willingness to welcome foreigners can be shown by lower ABSD rates. Many countries are turning inward. Tax revenue can be increased. A similar move could also speed up development in places like Marina South.

Having non SPR foreigners make up close to 5% of the total number of private home transactions in Singapore, excluding ECs is unlikely to distort our private home market.

As long as the government is able to provide an adequate number of private homes, and as the economy continues to grow, locals can achieve their private home ownership aspirations.

The Urban Redevelopment Authority (URA), which oversees the development of Marina South, has recently rejected the only bidder for the 99-year leasehold Marina Gardens Crescent Site in Marina South. This bid was nearly S$770.5million or S$984per square foot per plot rate (psf ppr).

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