Singapore Raises Foreign Buyer Stamp Duty by 60%... Targeting Chinese Investors

Acquisition Tax Rate Raised from 30% to 60%
Permanent Residents Also Required to Pay Stamp Duty When Purchasing a Second Home

Singapore has decided to double the property acquisition tax rate for foreigners in an effort to stabilize its real estate market. This policy appears to be aimed primarily at Chinese individuals and Chinese companies who have been purchasing large amounts of property in Singapore.

On the 28th, Bloomberg reported that the Singapore government raised the Additional Buyer's Stamp Duty (ABSD), a type of acquisition tax, the day before. The increased rate took effect immediately from that day.

With this measure, foreigners will now have to pay a stamp duty amounting to 60% of the property price when purchasing a home. The previous rate was 30%. Permanent residents purchasing more than one home will be required to pay a stamp duty of 25-30%. From the third home onward, the ABSD will increase from the previous 25% to 30%. However, for citizens and permanent residents without any housing, the ABSD will remain unchanged at 0% and 5%, respectively, when purchasing residential property.

This policy is interpreted as a measure to curb speculative real estate purchases by Chinese buyers. According to Bloomberg, Chinese buyers make up the largest proportion of foreign investors in Singapore. Last year, foreigners purchased 6.9% of Singapore's private apartment supply, and it is estimated that the majority of these buyers were Chinese.

Singapore's real estate industry expects that with the reopening of the economy, Chinese investors will flock to the market, and the proportion of Chinese buyers in the overall housing market this year is predicted to exceed 10%.

Due to speculation by Chinese buyers, housing prices and rents in Singapore have been steadily rising. Singapore's housing prices increased by 0.4% in the fourth quarter of last year and jumped 3.2% in the first quarter of this year.

The Singapore government is concerned that speculation by Chinese buyers will exacerbate wealth polarization. Previously, in December 2021 and September last year, two rounds of real estate market stabilization measures were implemented. The government stated that while these measures slowed price increases, recent rising demand in the real estate market has shown signs of prices surging again, prompting the introduction of additional measures.

Bloomberg stated, "This measure is a preemptive step by the Singapore government to prepare for a further increase in Chinese investors. It can be seen not as an immediate regulation to reduce foreign buyers but as a proactive measure to continuously stabilize the real estate market."

This content was produced with the assistance of AI translation services.