This is the third round of cooling measures since December 2021.

File photo of private residential homes in Singapore's Keppel Bay area. (Photo: iStock/tobiasjo)

SINGAPORE: Foreigners buying any residential property in Singapore from Thursday (Apr 27) will have to pay an additional buyer’s stamp duty (ABSD) of 60 per cent after it was doubled from 30 per cent.

This was the steepest increase among the cooling measures the government announced late on Wednesday night.

Singaporeans buying their second residential property will pay an ABSD rate of 20 per cent, up from 17 per cent, while those buying their third and subsequent residential property will have to pay an increased rate of 30 per cent, up from 25 per cent.

The rate of 30 per cent also applies to permanent residents buying their second residential property. PRs buying their third and subsequent residential property will pay an ABSD of 35 per cent, up from 30 per cent.

The increases in ABSD are to "promote a sustainable property market and prioritise housing for owner-occupation", said the Ministry of Finance (MOF), the Ministry of National Development (MND) and the Monetary Authority of Singapore (MAS) in a joint statement on Wednesday night.

They noted that the earlier measures in December 2021 and September 2022 have had a "moderating effect". However, property prices in the first quarter of 2023 showed "renewed signs of acceleration amid resilient demand".

“Demand from locals purchasing homes for owner-occupation has been especially strong, and there has also been renewed interest from local and foreign investors in our residential property market," said the authorities.

"If left unchecked, prices could run ahead of economic fundamentals, with the risk of a sustained increase in prices relative to incomes.”

Based on 2022 data, the ABSD rate increases will affect about 10 per cent of residential property transactions.

The ABSD rates for Singapore citizens and permanent residents purchasing their first residential property - which constitutes about 90 per cent of residential property transactions based on 2022 data - will remain at 0 per cent and 5 per cent respectively.

For acquisitions made jointly by two or more parties of different profiles, MOF, MND and MAS said the highest applicable ABSD rate will apply.

Married couples with at least one Singaporean spouse, who jointly purchase a second residential property, can continue to apply for a refund of ABSD, subject to conditions.

These conditions include selling their first residential property within six months after the date of purchase of the second residential property if it is a completed property, or the issue date of the Temporary Occupation Permit (TOP) or Certificate of Statutory Completion (CSC) of the second residential property, whichever is earlier, if the second property is not completed at the time of purchase.

The ABSD currently does not affect those buying a Housing and Development Board (HDB) flat or executive condominium unit from housing developers with an upfront remission, if any of the joint acquirers or purchasers is a Singapore citizen. There will be no change to this policy.

The revised ABSD rates will apply to all residential properties acquired on or after Apr 27, 2023.

There will be a transitional provision, where the ABSD rates on or before Apr 26, 2023, will apply for cases that meet all the following conditions.

Correspondingly, the additional conveyance duties for buyers (ACDB), which applies to qualifying acquisitions of equity interest in property holding entities (PHEs), will be raised from up to 46 per cent to up to 71 per cent.

A PHE is an entity which has at least 50 per cent of its total tangible assets comprising prescribed immovable properties in Singapore. More information on PHEs and prescribed immovable properties are available on the Inland Revenue Authority of Singapore's (IRAS) website.

According to the joint statement, the revisions to the ABSD rates to help moderate investment demand will complement the government's efforts to ramp up supply in order to alleviate the tight housing market for both owner-occupation and rental.

"We have increased the supply of private housing on the Confirmed List to 4,100 units for the 1H2023 Government Land Sales (GLS) programme, from 3,500 units for 2H2022. In 2022, we had injected a total of 6,300 units under the Confirmed List," said the authorities.

"For public housing, we have launched more than 23,000 flats in 2022 and will launch up to 23,000 flats in 2023. We are also prepared to launch up to 100,000 new flats in total between 2021 to 2025. We will continue to maintain a steady pipeline, to cater to growing housing demand."

While COVID-19 had led to severe delays across private and public housing projects, the government said it had made good progress to get back on track.

"With almost 40,000 public and private residential property completions in 2023, and near 100,000 units expected to be completed from 2023 to 2025, there will be significant housing supply coming onstream over the next few years."

The latest measures have been calibrated to moderate housing demand while prioritising owner-occupation, as well as providing sufficient housing supply, said the authorities.

They added that the government will continue to adjust its policies as necessary to ensure that they remain relevant and promote a sustainable property market.