No stamp duty relief for singles switching homes
The
Straits Times | March 30, 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.
Martin Koh | 86666
944 | R020968Z
Sherry Tang |
9844 4400 | R020241C
Senior Sales Director
DTZ Property
Network Pte Ltd (L3007960A)
Email: marshe_inc@yahoo.com.sg