Lighten ABSD, young local singles and PR couples moving home
SINGLE Singaporeans have something to cheer about from Budget 2024 in the area of housing. Single Singapore citizens aged 55 years and older can claim an additional buyer’s Stamp Duty paid for the second house.
The ABSD refund is a significant amount since a Singapore citizen purchasing a second property pays ABSD of 20 percent. The ABSD refund is $300,000 when the local purchaser of an additional home invests S$1.5million.
To be qualified to receive a refund in full, the local single has to sell their first home within 6 months of purchasing the second home. This is true if it was a finished property. The price of the second home must also be lower than the cost of the first.
At present, married couples with at the very least one Singaporean citizen may get ABSD remission if they buy a second house together, subject to certain conditions being satisfied, which includes the disposal of their primary residence within the time frame specified.
While married locals enjoy various advantages over singles in the housing market, supporting singles is crucial as singles are a large population.
In 2023, singles made up 30.4 percent of those in their 30s, 14.9 per cent of those in their 40s, 11.8 per cent of those in their 50s, and 10% of people in their 60s. The proportion of people in the 30s had 24.5 percent, 14.8%, 11.7 percentage and 7.5 7.5%.
Given Singapore’s land scarcity and the need for homes, they should be constructed for private use. Having curbs in the private market for housing to ensure that prices don’t fluctuate and the market does not have boom and bust cycles must be embraced by the various stakeholders such as agents, owners, developers and buyers.
Singapore’s home ownership rate is amazing 90% of Singaporeans are homeowners by 2023.
However, housing mobility matters too as many households may find their housing needs changing over time. And households face sub-optimal results if they face major obstacles in moving from one residence to another one that is more suitable for their needs.
Changing household size can be the main reason behind the need to move house. The household size can increase as an elderly parent is moved in with adult children, or a couple has children. A household may shrink when grown-up children move out of their parents’ home.
Certain families might wish to relocate to a place near their school or the place of work to save on travel time and costs.
The financial aspect can be a key driver for shifting homes. Perhaps a household want to move up to a top district condominium or a house that is landed to commemorate your business or career success.
A homeowner might decide to sell a costly property to acquire an affordable house when his financial situation is changing or he is retired. This can save some cash and reduce financial stress.
In addition, in an getting older Singapore there are elderly people who might want to relocate to a place that is less stressful or more suitable to their needs as their health decreases.
A house that is the right size, price or location can improve the mental health of a family and bring peace.
A household that sells one house to another owner-occupied property isn’t trying to increase the number of property it owns. Therefore, it seems to be unfair for a household like this one might be required to pay the ABSD rate for homeowners who purchase a second house.
The ABSD program be more welcoming for locals who currently enjoy more favorable ABSD treatment when purchasing their second home when, among other things they are able to sell their home within a certain timeframe?
Before granting a refund let locals pay ABSD for their second residence prior to requesting the refund. Instead, they may be made to pay ABSD for their second home, if their first home is not sold within the stipulated timeframe.
In the event of paying ABSD before receiving an amount back could put a significant stress on the family’s cash flow. It could also prevent them from moving.
You could consider the possibility of making ABSD more favorable for groups that trade a home they own for another. For instance local singles younger than 55 years of age and married permanent resident (PR) couples.
The benefits of helping PR couples could be justified by the economic contribution that PRs can make. As it stands the rate of ABSD payable for home purchases clearly favors the people over PRs.
Presently, singles in the local area who are younger than 55 years old and couples with PRs would have to sell their solely-owned house before purchasing an alternative home so that they do not have to pay ABSD applicable to purchasing another home.
Thus, these local couples, both single and married, might have to deal with the expense and hassle of renting a home during the interim. Also, if prices escalates the homeowners who decide to sell their own property first before purchasing their new home could end up in a sticky situation.
Additionally, perhaps the ABSD refund for singles who are eligible could apply even if one trades in an homeowner-occupied house for a more expensive one.
The world’s best planning, top quality public housing, and a good transport connections support mobility for housing in Singapore. Locals can fairly seamlessly move from private to public housing and vice versa or relocate anywhere on the island.
However, the costs of shifting from an owner-occupied house to a different one can hinder housing mobility.
The stamp duty for a home worth S$1.5m is around 3 percent. For an S$3m home, it’s around 4 percent. ABSD is a significant cost for the transaction.
To help with housing mobility Let’s create ABSD much friendlier for residents who want to move from their home that is owned by an owner to another.
