SINGLE Singaporeans were able to be happy about in Budget 2024, particularly on the housing front. In the event of meeting certain requirements one Singapore citizen who is 55 or over can now claim an amount of refund for Additional Buyer’s Stamp Duty (ABSD) which is paid on the second house they purchase.
The ABSD refund is a substantial amount, as a Singaporean who purchases a second property pays ABSD at a rate of 20%. For example, the full ABSD refund for a local who is eligible totals $300,000 for a S$1.5 million second-home purchase.
In order to be qualified for a refund in full, the local single has to sell their home within 6 months after purchasing the second home. This is the case even if it was a finished property. The value of the second property must also be lower than the value of the first.
In the present as of now, married couples that include at the very least one Singapore citizen are entitled to ABSD remission when they jointly buy an additional house, subject to different conditions like the requirement to dispose of the primary property within a specified time.
Singles have a lot of advantages in the housing market over married couples.
In 2023, the percentage of singles in the population aged 30 to 60 will be 30,4%, 14,9%, 11,8 percent, and 10% respectively. In 2010, the percentage of residents in their 30s was 24.5 percent, 14.8%, 11.7 percent and 7.5 7.5%.
Due to the limited land available in Singapore it is recommended that homes are built for the owner-occupier. All stakeholders, including owners, developers and agents, must welcome reductions in the market for private homes that will guarantee the stability and predictability of the market where prices don’t fluctuate and the market isn’t subject to fluctuations of boom and bust.
Singapore is a great homeownership rate of around 90 percent of the households own their homes in 2023.
But, the issue of mobility in housing is important as a lot of households find their housing needs changing over time. Families can also experience suboptimal outcomes if they encounter major obstacles when moving from one house to another.
The size of the household changing can be a key reason for the need to move house. As an example, a household grows because couples have children or elderly parents move in with their grown-up children. A household can shrink as the children grow older and leave their parents’ home.
Certain families might wish to relocate to a place near their school or the place of employment to cut down on cost of travel and expenses.
Finances can also be the main reason for moving homes. A household may want to relocate to a condominium in a luxury area or to a landmarked property to celebrate a career or business accomplishment.
A homeowner might decide to sell a costly home in order to buy a more affordable one when his financial situation is changing or he is retired. A lot of money can be freed up in the process, and financial strain substantially alleviated.
In a rapidly ageing Singapore the elderly may be tempted to move into a home which is easier to maintain or more suitable for their needs since their health is declining.
Owning a house with the proper size, cost or location can boost the mental health of a family and bring peace.
A household that trades one owner-occupied house for a different one isn’t looking to add to the number of properties it owns. It would seem unfair to charge a home owner who trades one home owned by the owner for another the ABSD rate.
In fact, could the ABSD program be made more welcoming to residents who are in the position of being eligible for a more favorable ABSD treatment when they buy their second house, provided, among other conditions, they can sell their first property within a specified timeframe?
Before granting a refund allow locals to pay ABSD for their second home before requesting a refund. Instead, they may be forced to pay ABSD on their second home in the event that their primary home isn’t sold within the timeframe specified.
For one thing, paying ABSD first, and then requesting a refund subsequently can significantly impact the cash flow of some households, and be an obstacle to the process of moving houses.
Additionally, you should consider the possibility of making ABSD treatment more accommodating to others who exchange an owner-occupied home to another, for example local singles who are below 55 and married permanent resident (PR) couples.
The financial benefits of many PRs could justification helping couples of PR. In addition, at present the rate of ABSD that are payable on home purchases clearly favours citizens over PRs.
To avoid having to pay ABSD for a second home, single locals and couples who are under 55 have to get rid of their primary residence first.
These local singles or couples who are from PR could have to rent a house for the time being. This could be a hassle and cost. If the prices rise, those who decide to sell their house prior to buying a new one could end up in a difficult situation.
The ABSD discount for singles who qualify should be available when they make a trade in their existing home for a more costly one.
Singapore’s housing mobility is supported by an international plan, excellent public housing and excellent transportation connectivity. Singaporeans are able to move between public and private housing or vice versa. They can also move to any part of the island.
The expenses associated with the cost of moving from one house owned by a homeowner to another could limit your housing mobility.
Buyer’s Stamp Duty is around 3 percent for a S$1.5 million house and 4 per cent for a home worth S$3 million. ABSD is a significant expense to the purchase.
To encourage mobility in housing, let’s help make ABSD more welcoming to those who are looking to move from one owner-occupied home to another.