During the Committee of Supply debates on Friday (Feb. 26), Workers' Party (WP) Member of Parliament (MP) Louis Chua asked why the remission of the Additional Buyer's Stamp Duty (ABSD) does not apply to married Singaporean HDB owners who wish to upgrade to private property.

Chua argued that while the ABSD helps to reduce excessive demand for property investments, they also affect "genuine HDB owners" who wish to upgrade to private property.

Chua started off by mentioning that the "Singaporean aspirations" of upgrading their homes from public to private property "is stronger than ever".

He attributed this to the nine per cent increase in private residential volume in 2020, despite the absence of foreign buyers and the pandemic.

Chua added that 73 per cent of Singaporean residents aged 35 and below aspire to upgrade, according to the latest HDB sample household survey.

However, the ABSD poses an obstacle to such "genuine HDB owners who upgrade to a private property", as they have to pay 12 per cent ABSD upfront within 14 days, or within two weeks of signing the Sales and Purchase (S&P) agreement if they have not already sold their current home.

This is unlike those who are upgrading to an Executive Condominium (EC) or a larger HDB unit, Chua says. These buyers will receive an automatic ABSD remission. The remission only applies to married Singaporean HDB owners.

He argued that 12 per cent is no small amount, even for those who are able to sell their first residential property within a stipulated timeline.

Lawrence Wong responds

Speaking in his capacity as the Second Minister for Finance, Lawrence Wong responded that the aim of ABSD is to moderate demand and to ensure a stable and sustainable residential property market.

Wong explained that only Singaporean married couples purchasing an HDB flat or a new EC unit are granted the remission because they are subject to HDB regulations that prohibit them from owning an additional residential property or to dispose of their existing residential property within HDB’s stipulated timeline.

There are no such regulations for private residential properties, Wong added.

Wong concluded:

"MOF is committed to ensuring that our overall fiscal system is fair and progressive, achieves good value-for-money outcomes, and importantly, sustainable over the long term."

Top image via MCI's Youtube video/Rigel on Unsplash