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Monday, 1 April 2013
No stamp duty relief for singles switching homes
A single person who buys a home to live in will be hit with the additional buyer’s stamp duty (ABSD) if he does not dispose of his existing residence first.
By Esther Teo Property Correspondent 30 March 2013
A single person who buys a home to live in will be hit with the additional buyer’s stamp duty (ABSD) if he does not dispose of his existing residence first.
That means a single person might have to find accommodation in between selling the old home and completing the purchase of the new one.
The clarification came from the Ministry of Finance (MOF) on Thursday, following uncertainty over whether stamp duty concessions for married people would also apply to singles.
Some married couples will get a refund of the ABSD if they dispose of their first property within six months of buying a resale home or the completion of an uncompleted one.
This relief is provided for joint purchases by married couples with at least one Singaporean spouse. Both parties must also not own any other property at the time of purchase to qualify.
But these do not extend to singles, the ministry told The Straits Times.
This means singles will have to sell their existing home first before buying another - even if the new unit is meant for occupation and not investment.
If they do not comply with this rule, they will be hit with a hefty additional tax in the form of the ABSD.
Experts say the rule could mean much inconvenience, with single people having to find a rented place for the short term, bunk in with a family member temporarily or secure an extension of stay with the buyer between the transactions.
The new levy was part of the seventh and most extensive set of property cooling measures that were unveiled in January.
These slapped a 7 per cent ABSD on Singaporeans buying their second home.
An MOF spokesman said that the Government raised the ABSD rates to moderate demand for properties and help cool the market.
It limited ABSD concessions to a narrow group of buyers, namely Singaporean married couples, to help them acquire and upgrade their matrimonial homes.
The MOF spokesman said that if more groups, such as singles, were able to qualify for ABSD concessions, it would defeat the purpose of the cooling measures.
“As such, Singaporeans will need to dispose of their first residential property if they wish to avoid ABSD on their next purchase. Singaporeans, including Singaporean singles, can buy their first residential property without any ABSD,” he added.
“The ABSD measures announced in January are significant, but they are temporary. They will be reviewed in future depending on market conditions.”
Some experts disagree with the policy, noting that all Singaporeans should be treated equally, regardless of their marital status.
Mr Chris Koh, director of Chris International, said singles should not be penalised as long as they will own just one house eventually.
The ABSD relief offered to married couples should be extended to them as well, as long as they commit to selling their current home within six months of the purchase, he said.
“The ABSD tax should apply to just investment homes, and if a single is buying a home for owner occupation, he should be eligible for the refund,” he added.
Most singles The Straits Times spoke to said they were unaware of the policy, but felt that it was unfair.
Real estate agent Isabella Lim, 36, said she was surprised to find out that she had to sell her home first if she wanted to upgrade to a bigger flat without paying the ABSD.
“If I’m not investing in another home, I’m not sure why I would need to pay more in taxes. But this will probably make me stay put for a while,” she added.
1 comment:
No stamp duty relief for singles switching homes
By Esther Teo Property Correspondent
30 March 2013
A single person who buys a home to live in will be hit with the additional buyer’s stamp duty (ABSD) if he does not dispose of his existing residence first.
That means a single person might have to find accommodation in between selling the old home and completing the purchase of the new one.
The clarification came from the Ministry of Finance (MOF) on Thursday, following uncertainty over whether stamp duty concessions for married people would also apply to singles.
Some married couples will get a refund of the ABSD if they dispose of their first property within six months of buying a resale home or the completion of an uncompleted one.
This relief is provided for joint purchases by married couples with at least one Singaporean spouse. Both parties must also not own any other property at the time of purchase to qualify.
But these do not extend to singles, the ministry told The Straits Times.
This means singles will have to sell their existing home first before buying another - even if the new unit is meant for occupation and not investment.
If they do not comply with this rule, they will be hit with a hefty additional tax in the form of the ABSD.
Experts say the rule could mean much inconvenience, with single people having to find a rented place for the short term, bunk in with a family member temporarily or secure an extension of stay with the buyer between the transactions.
The new levy was part of the seventh and most extensive set of property cooling measures that were unveiled in January.
These slapped a 7 per cent ABSD on Singaporeans buying their second home.
An MOF spokesman said that the Government raised the ABSD rates to moderate demand for properties and help cool the market.
It limited ABSD concessions to a narrow group of buyers, namely Singaporean married couples, to help them acquire and upgrade their matrimonial homes.
The MOF spokesman said that if more groups, such as singles, were able to qualify for ABSD concessions, it would defeat the purpose of the cooling measures.
“As such, Singaporeans will need to dispose of their first residential property if they wish to avoid ABSD on their next purchase. Singaporeans, including Singaporean singles, can buy their first residential property without any ABSD,” he added.
“The ABSD measures announced in January are significant, but they are temporary. They will be reviewed in future depending on market conditions.”
Some experts disagree with the policy, noting that all Singaporeans should be treated equally, regardless of their marital status.
Mr Chris Koh, director of Chris International, said singles should not be penalised as long as they will own just one house eventually.
The ABSD relief offered to married couples should be extended to them as well, as long as they commit to selling their current home within six months of the purchase, he said.
“The ABSD tax should apply to just investment homes, and if a single is buying a home for owner occupation, he should be eligible for the refund,” he added.
Most singles The Straits Times spoke to said they were unaware of the policy, but felt that it was unfair.
Real estate agent Isabella Lim, 36, said she was surprised to find out that she had to sell her home first if she wanted to upgrade to a bigger flat without paying the ABSD.
“If I’m not investing in another home, I’m not sure why I would need to pay more in taxes. But this will probably make me stay put for a while,” she added.
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