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Thread: Investor gets $442,680 cut in stamp duty

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    Default Investor gets $442,680 cut in stamp duty

    http://www.straitstimes.com/Singapor...ry_700829.html

    Investor gets $442,680 cut in stamp duty

    Lower stamp duty on separate contracts

    Judge says block buy should be treated as 83 separate ones

    Published on Aug 11, 2011


    AN INVESTOR who paid about $226 million for a whole tower block at Keppel Bay has been given a $442,680 discount on her stamp duty following a landmark High Court judgment.

    Madam Lily Lai, in her 50s, had appealed against her $6,788,775 bill, arguing that her purchase should be treated not as a single contract but as 83 separate ones. This worked out cheaper because the rate of stamp duty is lower on the first $360,000 of every purchase, meaning she saved $5,400 each time.

    Justice Choo Han Teck reversed the taxman's ruling in what industry players see as a test case which could set a precedent for other buyers.

    Madam Lai was born in Taiwan but is now a Singapore citizen. She is said to be a low-profile real estate investor who is interested in long-term developments.

    It is understood that she first caught sight of the development, called Reflections at Keppel Bay, while she was returning from a trip to Batam. She decided to invest in an entire tower block because a Buddhist shifu, or master, told her that the condo, which is 'backed by a mountain and faces water', has good fengshui, said a close friend of Madam Lai. The friend, who did not want to be named, told The Straits Times: 'We had just driven past a banner advertising the property and decided to take a look. After bringing shifu there, we decided that it was a good investment.'

    Madam Lai paid $226,472,460 for all 83 units of Tower 1A in 2007, but took the case to court after receiving the bill from the Commissioner of Stamp Duties.

    The Inland Revenue Authority of Singapore's (Iras) lawyers Foo Hui Min and Patrick Nai argued that correspondence between Madam Lai and the developers before the sale pointed to a single contract on which the stamp duty bill should be based. But Madam Lai, represented by lawyers Ong Sim Ho and Amolat Singh, said there was no understanding that there would be a single contract.

    Justice Choo found that Madam Lai had 'offered persuasive and bona fide commercial reasons for structuring the bargain in that manner'.

    Madam Lai also confirmed in court documents that she would not have accepted a single sale and purchase agreement to buy all the units 'as a collective interest'.

    'A single agreement would have constrained her ability to obtain financing from more than one financial institution,' said Justice Choo.

    'She would also face difficulties in the event of the sub-sale of one or more of the units because the developer would have to cancel the sale and purchase agreement and re-issue her with fresh sale and purchase agreements.'

    Justice Choo also rejected the Commissioner's reliance on a circular issued by the Iras on March 13, 2008.

    This said that when it came to stamp duty, block property purchases should be treated as having a single purchase price. This would prevent block buyers taking advantage of the tax scheme by treating the purchase as single units.

    But Justice Choo said that the circular was irrelevant as it was published after the case had arisen. The judge held that there 'cannot be uniform treatment of all block purchases'. He said the taxman must treat each case separately.

    Mr Ong said the move could have important implications. He added: 'The official Iras circular insisting on stamping 'block purchases' as a single block appears now not to be valid as the court rightly ruled that each case must be looked at based on its own facts.'

    An Iras spokesman said yesterday: 'We are reviewing the grounds of decision by Judge Choo Han Teck before deciding on the next course of action.'

    Madam Lai's friend said the units will be marketed and sold by Leadway Property, which also operates from and owns an 18th-floor office space at The Central Mall. According to the friend, Madam Lai spends most of her time overseas.

    When The Straits Times visited a four-room flat in Clementi - Madam Lai's last known registered address - a woman who answered the door said there is no such person living there.

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    Lower stamp duty on separate contracts

    $226,472,460
    Purchase price for all 83 units of Tower 1A at Reflections at Keppel Bay

    $6,788,775
    Stamp duty bill for the purchase, based on a single contract

    Madam Lily Lai said her purchase should be treated as 83 separate contracts and not just one.

    The rate of stamp duty is lower on the first $360,000 of every purchase, meaning she would save $5,400 on each one.

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    How about enblock?

    Can treat each as it's own or lump all as one?

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    $226 mil purchase, but engaging lawyer to fight over $0.4mil stamp duty. I think she is trying to proof her point.

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    Quote Originally Posted by hyenergix
    $226 mil purchase, but engaging lawyer to fight over $0.4mil stamp duty. I think she is trying to proof her point.
    Got implications forward, fighting for developers who enblock. Got two situations and the lines between them could be blurred.

    Same situation, developer who enblock will pay more stamp instead as it is to be treated as one.

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    $226 mil is not a small sum. There wasn't any firesale in 2008 after she bought in 2007. She must have very solid backing and related to some rich and influential figures in Taiwan.

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    Mrs Chen's $?
    Quote Originally Posted by hyenergix
    $226 mil is not a small sum. There wasn't any firesale in 2008 after she bought in 2007. She must have very solid backing and related to some rich and influential figures in Taiwan.

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    Quote Originally Posted by DC33_2008
    Mrs Chen's $?
    Sound fishy leh. Her last known address was a 4 room flat in Clementi.. Maybe she's in the laundry business. .

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    At $226m, I would rather purchase GLS instead. Muahahah...

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    $226,472,460 for all 83 units of Tower 1A. Since she now own the whole tower, Wonder if she can change the name of Tower 1A to her liking...

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    Quote Originally Posted by avo7007
    Sound fishy leh. Her last known address was a 4 room flat in Clementi.. Maybe she's in the laundry business. .
    She can change job to be developer liao! Bought whole block!

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    Quote Originally Posted by ysyap
    She can change job to be developer liao! Bought whole block!
    With nearly a quarter billion, she has more financial muscle than some of the smaller developers. I wonder why she would buy "off the shelves". There is certainly more than meets the eye.

    I don't think she is a "laundry" woman though. Because if she is, she wouldn't want any attention drawn to her. $0.4M is peanuts and not worth the scrutiny that she may be receiving from the publicity. It has also made IRAS look closer at her now.

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    Quote Originally Posted by howgozit
    With nearly a quarter billion, she has more financial muscle than some of the smaller developers. I wonder why she would buy "off the shelves". There is certainly more than meets the eye.

    I don't think she is a "laundry" woman though. Because if she is, she wouldn't want any attention drawn to her. $0.4M is peanuts and not worth the scrutiny that she may be receiving from the publicity. It has also made IRAS look closer at her now.
    wat u said make lots of sense

    aiya, jus take it tat she got tons of bana notes and mabe really 100% full faith on her FSM lor......buying off the shelves is hassle free mah rite?

    she maybe gd at making $$$ from stocks/forex/other businesses but know nothing much about building a project rite? jus wana park her spare cash into ppty

    its like giam siap ppl like me tend to handle our own renovation rather den paying a hefty sum to ID? whahahaha

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    who's that lucky agent(s) to service her?

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    Quote Originally Posted by hopeful
    who's that lucky agent(s) to service her?
    Maybe no agent. Just contact developer directly! If its one agent, then the agent met quota for 2 years running already. Can take 1 year vacation and travel the world to recharge! Even at 1% commission, agent can get $2.2m. Wow!

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    'A single agreement would have constrained her ability to obtain financing from more than one financial institution,' said Justice Choo.

    'She would also face difficulties in the event of the sub-sale of one or more of the units because the developer would have to cancel the sale and purchase agreement and re-issue her with fresh sale and purchase agreements.'


    think she fighting for this & not the money, taxman more concern of $$$. The commission should be given to the FS sifu instead of agent.
    Got mountain got sea = 1 tower sold

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    Wonder whos the property agent and how much is the comission
    Affordable means small

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    Quote Originally Posted by maisonjai
    'A single agreement would have constrained her ability to obtain financing from more than one financial institution,' said Justice Choo.

    'She would also face difficulties in the event of the sub-sale of one or more of the units because the developer would have to cancel the sale and purchase agreement and re-issue her with fresh sale and purchase agreements.'


    think she fighting for this & not the money, taxman more concern of $$$. The commission should be given to the FS sifu instead of agent.
    Got mountain got sea = 1 tower sold
    does she have to pay more if developer cancel the S&P agreement?

    Thought that every subsale, developer will cancel and reissue fresh S&P agreement.
    so what the difference?

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    Quote Originally Posted by hopeful
    does she have to pay more if developer cancel the S&P agreement?

    Thought that every subsale, developer will cancel and reissue fresh S&P agreement.
    so what the difference?
    say 100 units.

    u dun have to cancel and re issue for each and every deal. Redo the unsold ones for what?

    if 100 individual S&P, just cancel and reissue the right ones will do.

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    Quote Originally Posted by kingkong1984
    say 100 units.

    u dun have to cancel and re issue for each and every deal. Redo the unsold ones for what?

    if 100 individual S&P, just cancel and reissue the right ones will do.
    if she sell 50 units at different times to different owners,
    if consolidated S&P, developer cancel re-issued 50 times.
    if individual S&P, developer also have to cancel and re-issued 50 times.

    same no of times.
    perhaps lawyer charge less for individual S&P. since they only need to check legal ownership for that individual unit instead of 100 units.

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    Quote Originally Posted by hopeful
    if she sell 50 units at different times to different owners,
    if consolidated S&P, developer cancel re-issued 50 times.
    if individual S&P, developer also have to cancel and re-issued 50 times.

    same no of times.
    perhaps lawyer charge less for individual S&P. since they only need to check legal ownership for that individual unit instead of 100 units.
    makes sense... very troublesome lah.

    keep it simple.

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    very chim, if she using several banks for loan, with 1 contract & decides to sell at different timing, keep paying penalty if within log in period?

    1 contract for 83 units must very thick, use NTUC trolley to cart. haahaa.
    Maybe someone here ever bought a whole floor can advise. i can only afford 1 tower of beer heehee

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    I dont think she is citizen, otherwise she can buy landed liao ~

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    Quote Originally Posted by august
    I dont think she is citizen, otherwise she can buy landed liao ~
    Its for investment and by it, I don't think she's looking such a long term investment as buying a landed even if she's a citizen. Even Mr Peter Lim bought the entire stack or is it block from a condo in orchard for own stay! Not all citizens like landed!

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    Quote Originally Posted by august
    I dont think she is citizen, otherwise she can buy landed liao ~
    She is a Taiwanese who became a citizen.

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    She's wise to park her cash in properties not only because of investment but also because she's so so rich, there's always a high chance that friends and relatives might knock on her door to borrow money. She maybe always too kind hearted to lend but never get those money back! Just look at that European couple who struck lottery of some 3xx mil euros and quickly disappeared for fear of being robbed or taken advantage of!
    Last edited by ysyap; 12-08-11 at 17:14.

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    Quote Originally Posted by ysyap
    She can change job to be developer liao! Bought whole block!
    She can also run her own management committee for her block.

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