PropertyGuru’s budget wishlist wants 15-month wait period cut, ABSD tweaked

The firm also calls for the return of estate duty.

PropertyGuru stressed the need to give homebuyers a reprieve in its budget wish list 2024, with the property portal agency calling for a shorter wait-out period policy for downgraders as well as a review of the hefty additional buyer’s stamp duty (ABSD). 

Tan Tee Khoon, county manager at PropertyGuru, said the 15-month waiting period for private homeowners who wish to buy non-subsidised HDB resale flats should be reduced since the policy, rolled out in September 2022 as a temporary measure, already helped moderate demand and temper prices of HDB flats. 

“The market is at a new stage, so we should revisit some of the assumptions,” Tan said, noting that the secondary public housing market had shown signs of cooling with the BTO supply alleviating pent-up demand.

Despite the restrictions on downgraders, data showed transactions for million-dollar flats increased throughout 2023 due to strong demand for those who can afford pricer homes. He said these buyers are likely to be upgraders wanting larger homes priced out in the private residential segment. 

“Removing the barriers to owning HDB flats could lead to sharp price jumps and a hot market,” Tan said. “Such effects could be countered by raising the minimum occupation period or imposing a capital gains tax pro-rated to prevent private homeowners from gaming the situation.”

In the private residential market, he recommended that the ABSD be withheld for the second property of Singaporean families to curb the financial stress of homeownership. He said couples tend to decouple homeownership to acquire additional property, which leads to their inability to pool resources or diversify risks when purchasing a second home. 

“Enabling married couples to buy homes can inadvertently increase the supply of rental properties,” Tan said. “While the government’s initiative to introduce long-stay serviced apartments as a means to balance short-term rental demand fluctuations would address part of the demand, the impact on the cost of living for talent may remain limited if only a few market players participate.”

READ MORE: Cooling HDB resale market calls for review of wait-out period policy

He added that balancing both owner-occuppied and rental properties was crucial in keeping Singapore’s property market healthy and stable.

Lee Nai Jia, PropertyGuru’s head of real estate intelligence, also suggested the government to bring back estate duty, which was abolished in 2008 in a bid to attract wealthy Asian individuals to transfer their assets to the country, causing a boom in private banking, family offices, and asset management in the city-state.

The central bank in 2021 proposed a reintroduction of inheritance tax to address the wealth inequality in the city-state, although it raised concerns that reintroducing estate duty might push rich individuals to relocate their assets away from Singapore. 

Fearing this return would compel individuals to seek alternatives like Hong Kong and deter Singapore’s status as a regional financial hub, Lee suggested rolling out special provisions to soften the blow of the tax reintroduction.

“Estate duties should encompass more than just high-net-worth individuals,” Lee said. “They
should be applicable to the broader population, with rates adjusted according to the value and type of housing owned. This approach would ensure a more equitable distribution of the tax burden across different segments of society.”