The Straits Times
Published on Jan 15, 2013

Take action to stop market-distorting rebates


THE new property cooling measures are a good move by the Government to ease the burden on aspiring first-time home owners here ("Tough action to cool property market"; last Saturday).

However, there continue to be attempts to circumvent the spirit of these regulations.

Right after these were announced last Friday, advertisements by certain developers over the weekend offered rebates on the increased Additional Buyer's Stamp Duty.

By professing to absorb the stamp duty increase, it is possible for developers to keep supporting the headline price (it could even be higher), even though the actual prices that end-buyers see, after rebates, are in fact lower than before.

In other words, the opaque use of rebates is a market-distorting mechanism.

This has been a tactic used by some developers ever since the first Additional Buyer's Stamp Duty regulations were put into place some time back.

The Government should do something about this.

For any set of measures to be truly effective, the authorities should be alert to any "creative" marketing and sales tactics that could potentially be adopted by the developers and sales staff.

This is especially important now because interest rates are so low that they can only go up from now on.

Tan Teck Leng