Visitors to show-flats yesterday were upbeat after the change in seller's stamp duty (SSD) rules announced by the Government on Friday, saying that it gave them more of an incentive to invest.
Among the property measures announced was the change in the SSD rules. Buyers who buy a property from yesterday will not have to pay SSD if they sell it after three years. Previously, property investors could only avoid SSD if they sold their properties after four years. The SSD rates were also cut by four percentage points for each tier.
Consultant Debbie Lam, 31, said she has been looking over the past six months at investing in a property and said that the change in rules gives her more peace of mind. "I feel more assured now as I have more flexibility to sell earlier if I want to," she said.
She was at the show-flat of Australian developer LendLease's Park Place Residences at Paya Lebar Quarter, which opened for preview yesterday. The show-flat was crowded with property investors and first-time buyers, as Paya Lebar Quarter has been touted as an up-and-coming regional hub.
The 429-unit project is the third condominium project to hit the market this year, after UOL's The Clement Canopy in Clementi and CEL's Grandeur Park Residences in Tanah Merah. Even before the new property measures were announced, new launches over the past few months have seen a good response with strong sales.
What the new changes mean
• The seller's stamp duty (SSD) rates have been cut by four percentage points at each tier, and apply only for three years. Buyers who sell their properties within a year will pay only 12 per cent duty, instead of 16 per cent under the previous rules.
For those who sell within two years, they will pay only 8 per cent duty instead of 12 per cent, and for those who sell within three, they will pay only 4 per cent duty, down from 8 per cent. The new rates applya to properties bought from yesterday.
•The total debt servicing ratio (TDSR) on loans for owners who borrow against their residential properties was also tweaked. If a home owner's total outstanding loans are 50 per cent or below of his property's value, the TDSR rules no longer apply. This move could help retirees, for example, who can raise money on their property.
Mr Mark Goh, 40, a manager in the construction industry who was also at the show-flat, said the changes had partly prompted him to turn up for the preview.
"The change in SSD is better for investors and will definitely motivate more people to buy, as there are fewer restrictions," he added.
Mr Goh, who has several investment properties, said earlier he would have preferred selling only after four years to avoid paying the SSD but was pleased that he has now the option to sell earlier.
Some seasoned investors, however, said that the change in duty has minimal impact on their investing decision. Mr Joshua Lai, 46, a chief financial officer, said that he saw the change as a sweetener for developers rather than buyers.
"It's good news, but being able to sell after three rather than four years is not a big difference for investors. It mainly helps developers, as they will be able to increase prices with better buyers' interest."
A prospective buyer interested in The Clement Canopy, who wanted to be known only as Miss Yip, reckons the change in SSD would mainly benefit young families who can upgrade from their HDB flats to a condo. "The change in SSD definitely helps buyers by providing more options in the future, but it mainly benefits upgraders," she said.
Mr Tay Kah Poh, executive director and head of residential services at Knight Frank Singapore, said that the changes sent a "helpful signal" to property buyers, giving them more flexibility in their options to sell. "The changes were a happy surprise, and will benefit the momentum of the recent new condominium launches," he added.
He thinks that transaction volumes will improve but does not expect immediate changes to prices.
"Developers are more concerned about improving volumes rather than raising prices. They are hoping for a return of optimism to buyers and the property market," he said.
•Additional reporting by Samuel Chan