However, citizens of five countries that have free trade agreements, including the US, Switzerland, Liechtenstein, Norway and Iceland, will avoid the new charge, which has been given the ABSD acronym (additional buyer’s stamp duty). Also exempt are foreigners who are permanent Singapore residents and who are buying their first residential property.
But permanent residents who already own one residence and who are buying a second or subsequent one will pay an ABSD of 3%, the government said in a statement.
The current top stamp duty rate is 3%, and the ABSD is on top of this.
In announcing the new stamp duty, the government said it was necessary for “a stable and sustainable property market,” noting that foreigners have accounted for 19% of all private residential property purchases in the second half of 2011, up from 7% in 1H2009.
“The Government’s objective is to promote a sustainable residential property market where prices move in line with economic fundamentals,” it added.
“Prices of private residential properties…are now 13% above the peak in 2Q1996, and 16% above the more recent peak in 2Q2008.”
Singapore currently ranks as the sixth most expensive city in Asia, ahead of Hong Kong (in ninth place), both because of the cost of living and also because of the strength of its currency, according to the latest report from ECA International, a management consultancy.