RESIDENTIAL PROPERTY | Staff Reporter, Singapore

PropNex calls to suspend stamp duty for HDB upgraders

The 12% stamp duty adds to homebuyers’ burden of 20% CPF and cash home payment, it said.

PropNex Realty has submitted a proposal to the Ministry of National Development and the Ministry of Finance to revise the cooling measures implemented in 2018 to ease the load of HDB upgraders purchasing private homes.

The real estate agency stated three recommendations in the proposal, which includes the cancellation of the Additional Buyer's Stamp Duty (ABSD) for HDB Upgraders, the reversion of loan-to-value (LTV) limits for buyers’ first housing loan, and the revision of the ABSD rate for the purchase of second residential property.

“As, due to the rule of purchasing a second property, they [HDB upgraders] are liable for the 12% ABSD rate that is in place. This poses a great strain on their financial cash flow, as the buyers have to prepare the minimum 20% (Cash and CPF) in the initial stages, yet, they have to pay an additional 12% ABSD rate,” PropNex said in a release.

The firm argued that the implementation of the cooling measures had moderated the overall private property price index at the second half of 2018 as it reached 0.5% QoQ and -0.1% QoQ in the Q3 and Q4 respectively.

The firm added that this led to developers selling a total of 8,795 private new homes (excluding ECs) in 2018. This was a 16.8% YoY decrease in the number of units sold as compared
to 2017, which had a total of 10,566 private new homes being sold.

“Hence, we propose that all genuine HDB upgraders, who are purchasing their first private residential property, as their upgraded home, whether it is a newly launched or resale development, should be allowed to undertake to the HDB, agreeing to dispose their existing HDB flat, within 6 months from the time of completion for resale properties or upon TOP date for newly launched properties,” PropNex continued.

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