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Budget 2024 and its implications

Four Budget Announcements Related To The Real Estate Market



Budget Announcement 1:

Owner-Occupier Residential Properties get Property Tax Relief from 2025



Owner-occupied residential properties will pay lower property tax from 2025 due to higher annual value bands.

  • Annual values rose amid the surge in rents, owner-occupier residential properties were impacted by a significant jump in their property tax.

  • Relief for majority of homeowners as the revised tax bands will see most of them pay lower property tax from 2025.






In addition, eligible retirees can opt for 24-month instalment plan to pay their property tax wef 19 Feb 2024


Eligible retirees living in properties with high AV can opt for a 24-month instalment plan (interest-free)

  • To help retirees living in higher-end homes facing cash flow issues

  • To be eligible, retirees must

    • Be aged 65 and above,

    • living in the property they own,

    • and have an assessable income of $34,000 or less.

    • Have outstanding property tax payable for the property.



Budget Announcement 2:

Single Singapore Citizen (SC) Seniors to get ABSD Concession


Easier for single seniors to right-size their private property

  • Single SC Seniors to get the concession on Additional Buyer’s Stamp Duty (ABSD) when they right-size their homes

  • They are required to pay the 20% ABSD upfront, which will only be refunded after they sell their first private property.

  • To qualify, these buyers will need to fulfil conditions including:

    • Be aged 55 years and above

    • Sell their residential property within six months of purchasing a replacement lower-value private property

    • Not own more than one property at time of purchase




Who will benefit from this change?

  • Examples of those who may benefit from this change:

    • Single Seniors

    • Senior Divorcees

    • Senior Widows And Widowers

  • Those unable to cover the initial 20% ABSD must still sell their existing property before making a purchase.


Budget Announcement 3:

Lower ABSD clawback rate for new home developments

  • Previously, developers’ ABSD remission claw-back rate is fixed at 35% of the land value, subject to 5% compound annual interest, if they fail to sell all units 5 years from land purchase date

  • From 16 Feb 2024, the claw-back rate will be reduced if they sell 90% or more of the units 5 years from land purchase date

  • Provides flexibility while ensuring that the supply of new homes is released in a timely manner

  • Give developers some respite and confidence to bid for upcoming GLS sites.




However…

  • The ABSD remission will not move the needle and developers would rather sell 100% of units within 5 years.

  • Change is only to offer developers leeway if they fail to sell 100%.

  • Depending on the developer and the location of the projects, some developers may choose to pay the ABSD.


Budget Announcement 4:

Parenthood Provisional Housing Scheme (PPHS) Vouchers

  • PPHS helps to temporarily house families as they await the completion of their new BTO flats.

  • Eligible families waiting for their BTO can soon get voucher of $300 a month for one year to defray rents for a HDB flat or bedroom on the open market.

  • The initiative will run from July 2024 to June 2025.

  • To qualify applicants will need to meet conditions including:

    • must have a monthly household income of $7,000 or below,

    • and have booked an uncompleted flat from HDB's sales exercises.

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