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Global Property Guide
real estate regulations
Khaw Boon Wann
national development minister
Singapore Property Regulation
Property investment in Singapore has just got more complicated, with the government announcing another round of tight real estate regulations. While the most sensationalist changes will affect the residential sector, commercial property has not been exempt, the Global Property Guide reported.
Deputy prime minister and minister for finance Tharman Shanmugaratnam claim the measures are to avoid serious price corrections, while national development minister Khaw Boon Wann added that the changes will "ensure that housing will remain affordable to Singaporeans". However, for those looking to expand their portfolios in the country, the reforms are likely to prove somewhat of a headache. The main areas affected for commercial buyers are executive condominium (EC) developments and industrial properties. For ECs, medium-term rates are now used to determine monthly mortgage instalments from MAS-regulated financial institutions, while sales of new dual-key EC units are restricted to multi-generational families. Maximum strata floor area of new EC units has been capped at 160 square feet to make properties more affordable to middle-class Singaporeans, with private enclosed spaces and roof terraces will be treated as gross floor area. What's more, developers of EC sale sites from the government's Land Sales programme can only launch units for sale 15 months from the date of award of the sites or after the completion of foundation works. For industrial property, the government has introduced a Seller's Stamp Duty. This comes on the back of price rises, which have now outpaced rentals, and increased speculation. According to government figures, in the first eleven months of 2012, approximately 18 per cent respectively of all transactions of multiple-user factory space were resale transactions on properties bought just three years previously or less. Seller's Stamp Duty is hoped to stop this short-term speculative development, which has been attributed to the distortion of property prices. The duty will apply at 15 per cent if the property is sold in the first year of purchase, ten per cent if sold in the second year and five per cent if a sale takes place in the third year. However, this will only apply to properties bought on or after January 12th 2013.
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