SINGAPORE: With developers facing potential charges for unsold private residential units that could amount to S$100 million, the Real Estate Developers’ Association of Singapore (REDAS) renewed its call on Thursday (Feb 18) for the Government to review the property cooling measures.
“The real estate market is reeling from the compounding effects of an oversupply situation, rising vacancy rates, weak demand and increasing interest rates,” REDAS president Augustine Tan said at the association’s Spring Festival Lunch.
“There is therefore an urgent need for action to bring stability and ensure a soft landing to prevent further damage to the fragile economy,” he added, citing weak global growth, turmoil in financial markets and Singapore’s own restructuring journey as risks to the economy.
Mr Tan, who is also the executive director for property sales at Far East Organization, noted that as at the end of last year, there is a supply of more than 60,000 units in the pipeline and a record 26,500 vacant units.
In addition to the building supply, developers are also facing pressure from measures such as the Additional Buyer’s Stamp Duty (ABSD) and Qualifying Certificate (QC).
The ABSD, first introduced in 2011 and revised upwards in 2013, is a tax levied on both individual property purchasers and developers.
The amount of ABSD individuals have to pay depends on their residency status and the number of properties they own, while developers are required to pay 10 to 15 per cent of land cost unless they build, complete and sell all units within five years of the date of the land acquisition.
On top of ABSD, developers with foreign holdings also have to meet QC rules which stipulate that they must complete construction within five years of buying the land and sell all dwelling units in the next two years. Those who need more time to meet these requirements are required to pay extension charges pro-rated to the proportion of leftover, unsold units. Land sold through the Government Land Sales programme and on Sentosa Cove do not need QC.