Music of the night
You mean it applies to any listed companies with existing stocks ? How about those lands bought by CDL many years go in Pasir Ris and Flora road area?Originally Posted by august
FEO does not face this problem bcos it is not a listed company. This is why it could hold on to its units without selling for as long as it likes. There is a brief explanation of this in today's papers.
Ride at your own risk !!!
Newbie
Business Times
http://www.businesstimes.com.sg/sub/...469019,00.html
Published December 9, 2011
New terms may hit large collective sales
To avoid paying ABSD, developers must build, sell all units on residential sites within 5 years
By KALPANA RASHIWALA
(SINGAPORE) The latest measures unveiled by the government are expected to have major implications for developers buying residential land, especially involving collective sale sites. They will have to develop any residential sites they buy from Dec 8 and sell all the units in the new project within five years - if they want to avoid paying the new 10 per cent additional buyer's stamp duty (ABSD).
'This can be very onerous especially when the property market is slow,' said Credo Real Estate executive director Ong Teck Hui.
Drew & Napier head of tax practice Ong Sim Ho said: 'For developers, it has become more difficult and costly to land bank.' He suggested one intention of the new rule could be to give more certainty to supply numbers on the completion of private homes.
Information in the Inland Revenue Authority of Singapore e-tax guide on the ABSD indicates that the new 10 per cent ABSD is payable by corporate entities buying vacant land and development sites for residential use - although they can apply for upfront remission if the buyer (developer) undertakes to develop and dispose of all units in the new development (which must have more than four residential units) within five years of the date of contract or agreement to buy the site, among other conditions.
If this condition is not met, the ABSD (with interest) becomes payable immediately upon the expiry of five years. The residential sites include Government Land Sales (GLS) plots and private-sector sites including en bloc sales.
Market watchers say that with the five-year limit to complete the project and sell all units, developers will have to weigh their land purchase decisions more carefully.
'They must be confident of developing the project and disposing of all residential units in it within five years - taking into account the possibility of any turn in market conditions and in the case of en bloc sales, the risk of a possible delay in court approval,' says Lee Liat Yeang, partner in real estate practice group at law firm Rodyk & Davidson.
For en bloc sales, the date of contract or agreement refers to the date when the site is awarded by the Sales Committee. From this point, it can take six to 12 months or even longer for legal completion of the site's purchase (including court approval of the en bloc sale).
This additional time eats into the five-year limit the developer has to complete building the new residential project on the site and selling all the units, said Mr Lee.
But for sites bought through the GLS programme, the impact will be less as there is certainty that the legal completion of the land purchase will take place by the 90th day of the site's award (the latter is deemed date of contract), added Mr Lee.
Credo's managing director Karamjit Singh said the new rules will hit big collective sales very badly. 'For the small and medium-sized en bloc sale sites, most developers would already aim to buy the site, develop it and sell new units within five years, even before the new rules kicked in - whereas for the bigger sites it can be very difficult to be certain that you can clear all your units within five years.'
This will further reduce the attraction of bigger en bloc sale sites, which have already put developers off due to their steep pricing, say analysts.
There has not been any collective sale deal this year exceeding $200 million.
KPMG partner, tax services, Leonard Ong, said: 'The ABSD will certainly increase the costs of acquisition by developers who are unable to meet the conditions for remission.
'These costs are then likely to be passed on to end-buyers when the developed residential properties are sold. This would be regardless of who the properties are eventually sold to, including first-time home buyers. This cannot be the intention of the government.'
Under the new rules that took effect yesterday, foreigners and non-individuals (that is, corporates) buying any private residential property in Singapore will pay the 10 per cent ABSD. However, foreigners of certain nationalities - the United States, Switzerland, Liechtenstein, Norway and Ireland - who fall within the scope of respective free trade agreements will be accorded the same treatment as Singapore citizens.
Singaporeans pay a 3 per cent ABSD for their third or subsequent residential property purchase. Permanent residents pay the same ABSD rate when they buy their second or subsequent home in Singapore.
Even before the ABSD kicked in yesterday, any developer buying a GLS residential site has been given a five-year limit by the state to complete the project, although the GLS conditions do not stipulate any timeframe on the sale of units.
However, when it comes to buying a private sector residential site (for example, through an en bloc sale), foreign developers have to obtain a Qualifying Certificate, conditions for which include a five-year limit to obtain Temporary Occupation Permit (TOP) for the project and another two years from TOP date to finish selling all the units in the project.
Any developer with even a single non-Singaporean shareholder or director is deemed 'foreign'. Hence all the big listed developers, including City Developments and CapitaLand, are counted as foreign developers.
Hitherto, Singapore developers (such as Far East Organization and Hoi Hup) have been spared any time limit for completing or selling a residential project on a private site, although they face the five-year limit to complete GLS projects.
'So now the Singapore developers too will face a time limit to complete and sell units in all residential projects on sites bought from Dec 8, - if they wish to avoid ABSD,' said Mr Lee.
Music of the night
Hmm that means developers will probably do away with any big, hard to sell units, no more penthouses, 5br, strata houses etc to avoid being caught by this 5y must clear rule
Enbloc of any decent size project is pronounced dead
I am shivering to think about CM6
Ride at your own risk !!!
Junior
THE LAGUNA PARK potential en-bloc is gone case already..
even if they lower their price somemore there wont be takers also..
Newbie
Yes. Espada is good. Love the location as well
Newbie
I think the layout is quite ok for an MM. Not the 3xx sqft ones though.
Senior
Aiyo, with this ruling, developers might as well build all MM units. Or might as well all build the same hdb flats.
Actually with so much restrictions, might as well change business haa haa.... Crappyland become F&B company haa haa.
Junior
Henry Park site sold for $175.9m in collective sale
By Wong Siew Ying | Posted: 09 December 2011 1857 hrs
SINGAPORE : A collective sale site at Henry Park located off Holland Road has been sold to Kentish View Pte Ltd, a unit of Far East Organization, for S$175.888 million, making it the largest en bloc deal by value this year.
Its marketing agent Credo Real Estate says it has been a closely contested exercise that attracted five submissions for the prime District 10 apartment site.
The 999-year leasehold site with a land area of nearly 100,000 square feet comprises 48 apartments and 16 shop units.
If the sale is approved by the Strata Titles Board, each apartment owner stands to pocket gross proceeds of between S$2.3 million and S$2.9 million, while the shop owner could receive between S$3.2 million and S$4.7million each.
Credo says this would be the largest en bloc sale deal by value out of the 47 known deals done this year, the average of which has been S$60 million.
The Henry Park sale surpasses the collective deal for Hong Leong Garden Shopping Centre which fetched S$171 million in September.
Credo says the sale price for Henry Park Apartments translates to a land rate of about S$1,258 psf per plot ratio.
It adds that the developer has also made an application to purchase an adjoining State land parcel of nearly 1,400 square feet.)
If the application is accepted, Credo says taking the same sales price, it will translate to a land rate of about S$1,246 psf per plot ratio.
- CNA/ch
Newbie
i am sure private developers can sell their unsold units to property funds or subsidiary or relatives etc with the intention of buying back later.
Junior
Funds buying considered corporate entity rite ? That's 10% more, same as foreigner. Sorry this door is closed.
Junior
and pay stamp duty?
Newbie
FEO has impelmented counter ABSD measures liao.
Junior
what counter ABSD measures?FEO has impelmented counter ABSD measures liao.
Senior
The other developers will follow too... buyers are the biggest beneficiaries...FEO has impelmented counter ABSD measures liao.
Junior
haha good. outsmart govt with good results and long q.FEO has impelmented counter ABSD measures liao.
whacked them up down left right again.
More drastic cms
Newbie
For affected buyers, FEO will give 3% discount + 2% furniture voucher. Looks like a classic game of cat and mouse.
Junior
Feo is wrrying that buyers will let it lapsed.
Unless buyers do not know simple maths. Buy later at 30%, - the current promotion 5%. Total savings 25%!!
Look out for the next headlines. More units returned
Senior
Chey, same as Jan this year where they give straight 5% furniture vouchers during the launch of waterfront isle.For affected buyers, FEO will give 3% discount + 2% furniture voucher. Looks like a classic game of cat and mouse.
Newbie
FEO official discount is 3% + 2%, but ST is reporting that buyer can negotiate up to 16% more in discount privately......wow that's a 21% discount?
Junior
So developers see a gloomy future ahead??FEO official discount is 3% + 2%, but ST is reporting that buyer can negotiate up to 16% more in discount privately......wow that's a 21% discount?
Headlines: 21% discount when u buy at new launch!!
Senior
Its only 3rd day since the announcement of the measure and its already 21% discount... wow... watch out drivers... downhill up ahead...FEO official discount is 3% + 2%, but ST is reporting that buyer can negotiate up to 16% more in discount privately......wow that's a 21% discount?
Junior
listed price up 20%, so net 1%?
Senior
Aiya, 21% discounts by FEO is very normal lah. Their list price is usually out of this world type. E.g. Waterfront isle during launch. 15% discount + 2% loyality discount + 5% furniture vouchers.
Don't be fooled.
Junior
we paid BSD/ABSD before or after discounts from FEO? ie we pay stamp duties on the list price?Aiya, 21% discounts by FEO is very normal lah. Their list price is usually out of this world type. E.g. Waterfront isle during launch. 15% discount + 2% loyality discount + 5% furniture vouchers.
Don't be fooled.
genuine question, no sarcasm involved.
Newbie
I think you pay ABSD on the amount stated in the S&P. Furniture vouchers and such wouldn't count.
Newbie
If CM5 stays, for future developments, Far East can't sit tight n be official landlord to collect rent liao. The best way is for Far East to set up another subsidiary to buy the remaining unsold units. Pay 10% ABSD on unsold units is better than paying 10% ABSD on land price.
Bigger plots will see less agggressive bids compared to smaller plots. Maybe eliminate townhouse concept also in future sales.....
Junior
How about projects that are exclusively service apartments, but on residential land? Companies built condos just for the sole purpose of renting out.
What do they fall under?
Do they incur ABSD on unsold units?
They can actually get quite good rental yield if based on their purchase price, construction cost.
Senior
As expected, developers still need to eat, so they cut into their margins. At the end of the day, their margins are over 10% at least, for the sake of moving inventory, they would be wise to absorb the extra 3% at least.
Junior
with yesterday headlines 30% drop in prices. i doubt so buyers care-less for the absorbation of 3%.. minimium 20-30% absorbation.
70% locals buyer are pouring in their money into properties, because;
- in hope for capital appreciation,
- hot monies,
- foreigners buyers.
now confidence and dreams shattered..
no more foreigners.
it's a case of u sell to me, and i sell to u.
or u scratch my back, and i scratch ur back
Junior
realtor agency maangment's faces sure look wise and "happy" when interviewed on air, wf regards to the latest CMs..
body language and expression tells it all..
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