Legislative changes will be made to solve issues.
The Singapore government will be working to review and solve several issues concerning the residential stamp duties.
Speaking before the Parliament, National Development Minister Lawrence Wong said the concept of ownership of residential properties should be reviewed such that if a residential property is held by a corporate entity or a special purpose vehicle, and the shares of the company are transferred from seller to buyer, the normal residential stamp duties should apply.
" In principle, we should treat transactions in residential property on the same basis, regardless of whether a property is transferred directly or through a transfer of shares in a company whose primary business is in residential property in Singapore," he said.
Wong noted that they are already planning legislative changes to amend loopholes.
"The aim or the intent is not to impact the ordinary buying and selling of shares in such companies, where they are listed on the stock market by retail investors. However, significant owners of residential-property-holding entities will be subject to the usual stamp duties when they transfer equity interest in such entities, like what would happen if they were to buy or sell the properties directly," he explained.
In the current setting, a direct purchase of the residential property will require buyer's stamp duty of 3%, with up to 15% additional buyer's stamp duty imposed depending on the buyer's citizenship. However, buying of shares in a firm which owns the property incurs a tax of only 0.2% of the firm's net asset value.
Some major developers made bulk purchases of condo units this way.
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