Government backs away from proposed changes to property tax laws
From our Correspondent
Succumbing to public pressure, the government has aborted a proposed change to the tax laws dealing with gains made from property sales.
The public consultation process for the proposal attracted 64 responses with 60 opposing the change.
Under the proposal, an individual who sells a property would be taxed on the profit if he had sold another property within the preceding four years.
Touted as a measure to curb speculation in the property market, the announcement of the news led to a two day slump in property stocks.
In a statement yesterday, MOF said there was feedback that the proposed change ‘could bias purchase decisions towards investing in one bigger property, rather than numerous smaller properties’.
The scrapping of the proposed changes means the prevailing tax regime remains in place.
The government has already earned considerable profits from the stamp duties collected from property transactions as well as levy from resale of HDB flats.
Capital gains from property sales remain untaxed though Inland Revenue Authority of Singapore assesses a small number of individuals who makes regular property transactions each year.
The Singapore property market has made a remarkable recovery since hitting a low at the beginning of the year. Prices are now comparable to the peak in 2007.
Mass market homes have led the way with a recent project in Ang Mo Kio fetching prices at above $1,000 psf which is unsustainable according to most analysts.
Despite the high prices, Singaporeans are still flocking to new launches. For many HDB upgraders, the desire to live in a condominium overrides all other monetary concerns.
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Jim on Sat, 22nd Aug 2009 1:02 pm
As you can see, the rich will get richer, together with our pro-business Goverment.
Isn’t it logical to tax rich people more than the poor? Furthermore, the proposed tax rule only reduces profits from property sales, which will not make the sellers poorer in any case, but just less richer.
Anonymous on Sat, 22nd Aug 2009 1:46 pm
“Succumbing to public pressure….” what talking you!
The elites are the ones resist taxing the gains from property sales, and mind you, in very big sums.
You think the poor have anything to sell (other than the single roof over their heads) at all.
reader on Sat, 22nd Aug 2009 2:13 pm
I find it amusing that the govt states one of their main rationale as not wanting to scare away foreign investors.
Yes yes, property prices here are not high enough, let’s get more foreign investors to come here and push up prices.
We need more speculation to prevent property prices from going down, which will be a great disaster!
Let’s obtain money through other avenues, eg. regressive taxation like higher GST!
After all, GST affects rich people less than poor people. We need more rich people to help prop up our economy (or to be more specific, our GDP numbers)!
WhereMyMoneyGo on Sat, 22nd Aug 2009 5:20 pm
Govt wont tax the rich and elites.
Only the rich and elites can buy and sell houses every 4 years
cy on Sat, 22nd Aug 2009 8:30 pm
just because only 60 opposed changes,govt backdown.
if 60 ppl demand open book on temasek/gic accounts, will govt backdown?