ABSD reduction for foreign buyers of CCR homes pushed

It suggests halving the ABSD rate to 30% from 60% for properties priced above $5m.

The Additional Buyer’s Stamp Duty (ABSD) rate must be reduced for foreigners purchasing high-end homes in the Core Central Region (CCR), PropNex said.

In its commentary, PropNex suggests halving the ABSD rate to 30% from 60% for properties priced above $5m.

This adjustment aims to revive the luxury home market in the CCR, which has been significantly impacted by the 2023 ABSD hike. The measure could stimulate interest from foreign buyers, who have traditionally been key contributors to this market segment, without negatively affecting local demand.

It also proposed to increase the Mortgage Servicing Ratio (MSR) for executive condominiums (ECs) to 40% from 30%. This change accounts for the rising prices of new ECs, which have doubled since 2013

PropNex highlighted that the 30% MSR, unchanged since 2013, no longer aligns with the significant price growth of ECs, making this adjustment timely and necessary.

Additionally, PropNex advocates for harmonising ABSD remission treatment for HDB upgraders. Currently, HDB owners upgrading to private homes must pay ABSD upfront and seek remission by selling their HDB flat within six months.

PropNex suggests aligning this policy with the treatment for EC buyers, who are not required to pay ABSD upfront. This change would alleviate the financial strain on families transitioning to private housing, reduce unnecessary rental expenses, and minimize disruptions caused by interim housing arrangements.

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