Property market gets the chills
Singapore government’s measures to curb property speculation sent shares of city-state’s biggest developers down the most in 11 months today.
The Straits Times Real Estate Index fell 0.3% at the close, with three stocks falling for every two that gained. CapitaLand, Southeast Asia’s biggest developer, fell 3.4%, while City Developments, the second largest, declined 4.6%, both retreating by the most since Feb 22.
The new cooling measures include extending the holding period of sellers stamp duty (SSD) from the current three years to four. The SSD has also been raised to 16%, 12%, 8% and 4% for properties that are bought after Jan 14 and sold within the first to fourth years respectively. This is payable regardless of whether the property is eventually sold at a gain or a loss. Also, unlike capital gains tax where sellers are taxed on their gains, the SSD is taxed on the full consideration of the property sold. This measure is therefore a significant deterrent for short-term speculators, research house Macquarie surmises.
Meanwhile, the loan-to-value (LTV) limit on housing loans for property purchasers who are not individuals will also be lowered to 50% while the LTV for individuals with one or more housing loans at the time of purchase will be lowered to 60%. The measures also take effect from Jan 14.
