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.