Property curbs to tame market add $1b to tax revenue

The raft of cooling measures imposed to tame the red-hot property market has delivered more than $1 billion in additional levies to the taxman.

The surge in revenue was bolstered following the additional buyer's stamp duty (ABSD) of up to 15 per cent that was rolled out in January.

About $158 million in ABSD was netted in February and March, bringing the total until March to $1.03 billion since the tax was introduced in December 2011, the Inland Revenue Authority of Singapore (Iras) told The Straits Times recently.

The January measures - the seventh since September 2009 - also marked the first time that Singaporean investors buying their second homes were penalised with an additional tax.

Foreigners have forked out $580 million in ABSD for 3,041 homes from December 2011 to March this year, while Singaporeans and permanent residents (PRs) have stumped up $386 million for 7,269 homes, Iras noted. Non-individuals such as companies paid a further $66 million in levies for 285 units.

Home owners have also paid $66.6 million in seller's stamp duties since that levy was introduced in 2010.

This tax of up to 16 per cent is meant to curb speculation and applies to those who sell their homes within four years of purchase.

However, no seller's stamp duty has been collected for industrial transactions since the new taxes that apply to the segment were unveiled on Jan 11, said Iras.

The taxman's annual report released last September stated that it collected $2.3 billion in stamp duty from sale and purchase agreements in its financial year ended March 31 last year.

This figure includes levies like the additional buyer's stamp duty and the seller's stamp duty.

Experts say the new-sale market has continued to be healthy despite the measures as developers dangle discounts and other incentives to alleviate the ABSD's sting.

Savills Singapore research head Alan Cheong estimates that 30 per cent to 40 per cent of buyers at new launches since the January measures came in are second, third or subsequent home buyers.

"They are creating reasons to buy. It could be for rental income when the population grows to over six million, capital gains or to hedge against the possibility of their children not being able to afford homes in the future," he said.

Iras said Singaporeans and PRs bought 1,031 homes subject to the ABSD in February and March, contributing $97.7 million in additional taxes. They are subject to ABSD rates ranging from 5 per cent to 10 per cent.

Foreigners, subject to a 15 per cent ABSD for all purchases, bought 232 homes with a total of $58.2 million in ABSD collected in the same period. Non-individuals acquired 13 homes with a total of $1.84 million netted.

Foreigners seem to have retreated from the market after the applicable ABSD rate of 10 per cent was increased to 15 per cent in January.

In February and March last year, when only the 10 per cent levy applied, they bought 315 units, according to caveats lodged with the Urban Redevelopment Authority, 36 per cent more than this year.