SINGLE Singaporeans have plenty to be pleased about in the Budget 2024. Single Singapore citizens aged 55 or older are eligible for the benefit of a rebate on Additional Buyer’s Stamp Duty that they pay for the second property.
The ABSD refund is a significant amount, as anyone who buys a second property pays ABSD at 20 percent. The ABSD refund is $300,000 if the local purchaser of the second property spends S$1.5million.
Among the conditions to get a full refund, the local single must sell his first home within a period of six months following the date of purchase for the second property for the property to be completed, or the date of issue for the Temporary Ownership Permit / Certificate of Statutory Completion or the earlier date in the event that the property was not fully completed at the point of the purchase. The value of the second home must be less than the value of the first.
At present, married couples with at minimum one Singaporean citizen are able to get ABSD remission if they buy a second house together, subject to certain conditions being met, including disposing of their primary residence within a specified period.
Although married locals have many advantages over singles in the housing market, supporting singles is crucial because singles constitute a huge segment of the population.
In 2023, singles accounted for 30.4 per cent of residents who were in their 30s. They also comprised 14.9 per cent of those in their 40s, 11.8 per cent of those in their 50s, and 10 per cent of those in their 60s. The proportion of people who were in their 30s was 24.5 percent, 14.8%, 11.7 percentage and 7.5%.
Because of Singapore’s limited land it is recommended that homes are constructed for the owner-occupier. The introduction of curbs to the private housing market to guarantee that prices do not run away and the market doesn’t have periods of boom and bust should be welcomed by stakeholders including developers, owners, agents and buyers.
Singapore boasts a prestigious homeownership rate of about 90 per cent of resident households own their homes in 2023.
Mobility in housing is a crucial aspect because the needs for housing of many households can change as time passes. Families could also see subpar outcomes if they encounter major issues when moving from one house to another.
A change in household size could be the primary reason behind moving home. The size of a household may increase when an elderly parent is moved in with adult children, or when a couple adds children. A household’s size decreases as children grow older and leave their parents in their homes.
Certain families might wish to move to a location near their school or the place of work in order to reduce travel time and costs.
Financial reasons can also be the main reason for shifting homes. The family may decide to relocate to a condominium in a posh area or to a land-locked property to celebrate a career or business accomplishment.
A homeowner might decide to sell a costly house to purchase an affordable house when his financial situation is changing or he is retired. Many dollars can be freed up in the process, and financial stress significantly eased.
In addition, in an getting older Singapore there are elderly people who might be looking to move to a place that is easier to manage or more appropriate to their needs as their health gets worse.
The house you live in with the right dimensions, price or location can enhance your family’s mental wellbeing and peace.
A family that exchanges an owner-occupied home to another does not intend to add to the amount of properties it owns. Therefore, it seems absurd that a family may need to pay the ABSD rate for those who buy a second property.
Indeed, could the ABSD program be made more welcoming to those who are currently qualified for better ABSD treatment when they purchase their second property, if, among other conditions, they are able to sell their primary residence within a specified timeframe?
It might be possible to allow the locals to not pay ABSD on their second home first, before getting a refund. Instead, they could be required to pay ABSD on their second property when their first residence isn’t sold within the timeframe specified.
In the event of paying ABSD prior to receiving the refund could be a significant strain on the household’s cash flow, and may prevent them from moving.
You could consider making ABSD more favourable for groups who exchange a house they own in exchange for another. For example, local singles under 55 years of age and married permanent residents (PR) couples.
The financial benefits of many PRs can justify helping PR couples. As it stands, ABSD rates for home purchase clearly favor the citizens over PRs.
Local singles who are under 55 years old, and PR couples would need to sell their solely-owned home first before they buy another home, in order not to pay ABSD for acquiring an additional home.
Local couples or singles from PR may require a rental for the time being. This could be a hassle and cost. Also, if prices escalates the homeowners who are able to sell their property first before purchasing their replacement home might find themselves in a bind.
Additionally, perhaps it is possible that the ABSD refund for eligible singles could apply even if one trades in an owner-occupied home for a pricier one.
The world’s best planning, top quality public housing and excellent transport connectivity support housing mobility in Singapore. Locals are able to move between private and public housing, and vice versa. They are also able to move anywhere on the island.
However, transaction costs of the move from a home owned by an owner to another can impede housing mobility.
Buyer’s Stamp Duty can be as low as 3 percent for an S$1.5 million home and 4 percent for a house worth $3 million. ABSD is a significant expense to the purchase.
To support housing mobility Let’s create ABSD more welcoming to those who want to move from one owner-occupied home to another.