Bargains starts as developers’ ABSD looms

Additional Buyer Stamp Duty was introduced on 8 Dec 2011. Developers have to complete and sell all the units in residential project within 5 years or else they will have to pay either 10% or 15% (raised on 12 Jan 2013) .

The first five year deadline comes at the end of this year. The Trilinq project at among the first few sites if not the first to be affected under the rules. The median price for until sold in Q4 2015 was $1329psf, down from $1545 psf in Q12013. So far the project in Clementi sold 220 of 755 units as of last year.

Other projects that saw price drops include Mon Jervois and Kingsford@Hillview Peak, which could incur ABSD from early 2017. The prices dropped from $2087psf to $1852psf and $1340psf to $1288psf for the respective projects.

Developers of projects on Government Land Sales (GLS) could pay out as much as $39.6m, $566m and $568m for years 2016, 2017 and 2018. 

In another regulation which affects foreign players, Qualifying Certificate (QC) rules stipulates non Singaporean developers to finish building a residential site within 5 years of buying a site and sell all units within 2 years of completion. The additional charges that developers must pay to extend the deadlines are pro-rated based on the quantity of unsold units.

However ABSD fees applies even if there is only one unsold unit. Developers could work around the fees by buying over the unsold units which in turn will incur 15% ABSD. So for buyers out there it could be a good bargain hunting in the primary market.

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