Mr Chua Kheng Wee Louis (Sengkang): Chairman, with a 9% increase in private residential volumes in 2020 despite the absence of foreign buyers and despite COVID-19, the Singaporean aspirations of upgrading from public to private property is stronger than ever. Aspirations for better housing is particularly pertinent for residents aged 35 and below, with 73% aspiring to upgrade according to the HDB’s latest sample household survey.
Enabling financially able Singaporeans to upgrade from HDB to private not only fulfils their aspirations, but it also eases demand for homes in the public residential market. While Additional Buyer’s Stamp Duty (ABSD) has helped reduce excessive demand for property investments, it has also affected genuine HDB owners to upgrade to a private property.
An HDB owner today has to pay 12% ABSD upfront within 14 days of signing the S&P agreement for a private property if he or she has not already sold their current home. Given the rising prices of private property, 12% is no small amount, even though this could be remitted for married couples once they sell their first residential property within the specified timeline. This experience is different for a HDB owner who upgrades to an Executive Condominium (EC) or even buying another larger HDB unit. The Government grants semi-automatic ABSD remission providing them six months after collecting the keys to sell the flat.
Mr Chairman, this remission reduces the pressure of having to pay the ABSD in a short span of 14 days, a relief the HDB owners transitioning to private properties do not enjoy. I would like to ask if there is any rationale behind the absence of remission for a HDB to private property automatically, as a compared to HDB or EC upgraders. Would MND explore harmonising this remission to this group of citizens who wish to fulfil their housing aspirations?
Ministry of Finance
26 February 2021