Singapore To Prevent Boom Buzz Cycle In Real Estate Market
As the local economy works to shrug off the scars of the recent financial meltdown and the H1N1 Influenza, Singapore property market has been the darling of the moment. In the last two years, property transactions are close to its record peak and market analysts have nothing but nice commentary about real estate market in the coming months. But in the middle of all these optimism, Singapore government has raised the alert in November 2009 that it is worried about a repeat of the 1996 boom buzz cycle.
Older Singaporeans would no doubt remember the mid nineties property craze, perhaps more so for people who got burned by it subsequent and sharp retraction. Now more knowledgeable and more alert, government is not about to get caught again in another similar situation.
Aside from the market driven philosophy, the Singapore property sector can be influenced by quite a few legislations, some of them include land supply, credit control and tax policies.Let's try to understand each of them and study the possible implications.
Land Supply Strategy - This has always been use to good effect by the government to contain the over zealousness of super bullish developers.As government releases less land for residential and industrial development, this would slow down the supply for new commercial buildings as well as residential projects, hence reducing the speculative play on new launches.
Credit - More effective control is tightening the money supply. There was a report circulating in the area of real estate that the government is considering a review of the lending guidelines for housing loans. Current law authorizes up to 90 percent of the purchase price to be paid to qualified buyers. It is feared that this amount may, in the 80-percent level or lower level of 75% placed.
Capital Gain Tax - This can be one of the more drastic measures. It was first introduced in mid nineties to curb over speculation but was subsequently abolished. Government may consider enforcing laws to compel buyer who buys properties in this period to hold on for one year before releasing back to the market in order to be exempted from tax. It has been a powerful tool during the mid nineties to counter excessive speculation in Singapore market. If this is to be re-enforced, surely a lot of players would be hit hard.
Property Tax - For example, buyers who do not conform to minimum stay requirement as in the above explanation may have to be subject to a higher tax than the existing 10 percent. Has selective implementation on property tax.For owner-occupiers, they typically pay less than half of this amount.
Two Way Stamp Duty - A two way stamp duty makes buyer and seller pay stamp duty. Currently only buyer needs to pay stamp duty.
The top looks to use some of the possibilities of government can, in order to cool the overheated market. If you are active in real estate speculation, make sure to keep knowing developments. - 23210
Older Singaporeans would no doubt remember the mid nineties property craze, perhaps more so for people who got burned by it subsequent and sharp retraction. Now more knowledgeable and more alert, government is not about to get caught again in another similar situation.
Aside from the market driven philosophy, the Singapore property sector can be influenced by quite a few legislations, some of them include land supply, credit control and tax policies.Let's try to understand each of them and study the possible implications.
Land Supply Strategy - This has always been use to good effect by the government to contain the over zealousness of super bullish developers.As government releases less land for residential and industrial development, this would slow down the supply for new commercial buildings as well as residential projects, hence reducing the speculative play on new launches.
Credit - More effective control is tightening the money supply. There was a report circulating in the area of real estate that the government is considering a review of the lending guidelines for housing loans. Current law authorizes up to 90 percent of the purchase price to be paid to qualified buyers. It is feared that this amount may, in the 80-percent level or lower level of 75% placed.
Capital Gain Tax - This can be one of the more drastic measures. It was first introduced in mid nineties to curb over speculation but was subsequently abolished. Government may consider enforcing laws to compel buyer who buys properties in this period to hold on for one year before releasing back to the market in order to be exempted from tax. It has been a powerful tool during the mid nineties to counter excessive speculation in Singapore market. If this is to be re-enforced, surely a lot of players would be hit hard.
Property Tax - For example, buyers who do not conform to minimum stay requirement as in the above explanation may have to be subject to a higher tax than the existing 10 percent. Has selective implementation on property tax.For owner-occupiers, they typically pay less than half of this amount.
Two Way Stamp Duty - A two way stamp duty makes buyer and seller pay stamp duty. Currently only buyer needs to pay stamp duty.
The top looks to use some of the possibilities of government can, in order to cool the overheated market. If you are active in real estate speculation, make sure to keep knowing developments. - 23210
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posted by X - Men @ 5:56 AM
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