Singapore | Home tax hike not a market cooling move, minister says

Singapore’s tax increase on home purchases exceeding SGD1 million (USD758,960) is aimed at making duties more equitable rather than imposing an additional property curb, said S. Iswaran, minister of trade and industry.

Stamp duty on the portion of a property’s price above SGD1 million was raised starting yesterday to 4 percent from 3 percent, the government said in its budget Monday. Home prices have rebounded in the past two quarters, prompting aggressive land bids from developers as the property market shrugged off cooling measures ranging from additional taxes to limits on loans to emerge from a four- year slump.

“The measures have had the desired effect,” Iswaran said. “If in fact there’s any concern, you would have seen far more significant measures.”

While a recovery in home prices is not a cause for concern, “exuberance” in the so-called en-bloc market for redevelopments may not be warranted, Ravi Menon, the managing director of the Monetary Authority of Singapore, said at a conference last month. Collective apartment sales for redevelopment in the first two months of 2018 totaled more than SGD3.1 billion, almost double the SGD1.66 billion seen in same period during the last en-bloc market peak in 2007, Nomura analyst Min Chow Sai wrote in a note dated Feb. 19. MDT/Bloomberg