Time to introduce capital gains tax on property

[reporter2]

http://www.businesstimes.com.sg/sub/...83140,00.html?

Published April 3, 2012

LETTER TO THE EDITOR

Time to introduce capital gains tax on property


ALTHOUGH the government has introduced an array of property cooling measures, it should consider a capital gains tax and complement the stamp duty to rein in the property market fever while providing a good source of government revenue.

Stamp duty on property transactions or inheritance tax can be avoided or minimised through setting up a corporate vehicle to buy and hold the property.

Creative tax arbitrage opportunities may exist for individuals to buy and hold properties through special-purpose vehicles (SPVs) to avoid or minimise stamp duties, if the stamp duty rate on residential property transactions is higher than on share transfer transaction of the company holding the properties.

In addition, the SPVs can be set up in an offshore tax haven to further exploit tax advantage between Singapore and these jurisdictions.

Further, tax loopholes can be potentially exploited through avoidance of inheritance tax or estate duty when the property is passed on.

The government should consider implementing a capital gains tax on all property transactions unless they are held for, say, more than 10 years.

It should also impose such a tax on, say, second non-owner-occupied homes, regardless of the holding period.

This would protect genuine long-term investors seeking wealth protection instead of pursuing short-term trading profits at the expense of a healthy property development industry in Singapore, foreigners and locals included.

In addition, the current additional buyer's stamp duty should be revised upwards for high-end property transactions worth more than, say, $5 million.

The UK government recently introduced a slew of changes, including hiking stamp duty on residential property transactions worth more than £pounds;2 million (S$4 million) and imposing a 15 per cent stamp duty on purchases made through companies in its 2012 Budget.

This has been done amid rising property prices driven by foreign purchases, and acts as a stabiliser against declining corporate income tax revenue after legislated reductions in income tax rates.

We can take a leaf out of the UK government's book to simultaneously rein in the property bubble and add to the state's coffers. Hopefully, this would provide sustainable fiscal support to enable the government to hold back GST increases beyond the five years promised.

Ee Teck Siew

[carbuncle]

Selfish pr*** who want to squash dream of 80% over home owners to make profit from selling their home just to bring down the price of his fish at the wet market... Well guess thats all he can afford.

[teddybear]

Ai yo, another missed the boat one cow-pay-cow-bull asking govt for help!
To provide good source of govt revenue, since he likes to compare to UK so much, Singapore govt should take a leave out of UK Govt's book and do the following:
1) Increase corporate tax to 40% (just like UK)
2) Increase income tax to 40% (just like UK)
3) Increase GST to 17.5% (just like UK)
4) Impose headcount tax, $1000 per person per year (now still have in UK?) (with 5.5m population means govt can collect $5,500m or $5.5b!)

In Singapore context, to rein in property fever, govt should:
1) Ban all developers' CASH-BACK, otherwise new launch buyers paying only 15% instead of 20% upfront!
2) Regulate minimum size required for bedrooms! Regulate min size for properties with 1,2,3 bedrooms! Don't let developers build MM units and milk super high $PSFs! 3BRs must be at least 1000 sqft! 2BRs must be at least 850 sqft! 1BR must be at least 650 sqft!
3) 4-years SSD countdown for new launch purchase should start from date when buyer pay up 100% (just like resale, you see, resale dead and prices going down, while new launch still going up, means must look at what works to make resale down and sure will be effective on new launch!)
4) Enforce 40% LTV! No 20% deferred payment for 3 years! (just like resale, you see, resale dead and prices going down, while new launch still going up, means must look at what works to make resale down and sure will be effective on new launch!)
5) Time to check why banks can match valuation of new launch and can't match valuation of resale nearby that is >20% cheaper? Banks and developers drink-coffee together is it?

Why he not happy with foreigners? Like that might as well ask govt to send all foreigners and PRs home then he will be happy?
Why should rich people pay more stamp duty when the stamp duty already by fixed % and the more expensive property means they already pay more taxes?

http://www.businesstimes.com.sg/sub/...83140,00.html?

Published April 3, 2012

LETTER TO THE EDITOR

Time to introduce capital gains tax on property


ALTHOUGH the government has introduced an array of property cooling measures, it should consider a capital gains tax and complement the stamp duty to rein in the property market fever while providing a good source of government revenue.

Stamp duty on property transactions or inheritance tax can be avoided or minimised through setting up a corporate vehicle to buy and hold the property.

Creative tax arbitrage opportunities may exist for individuals to buy and hold properties through special-purpose vehicles (SPVs) to avoid or minimise stamp duties, if the stamp duty rate on residential property transactions is higher than on share transfer transaction of the company holding the properties.

In addition, the SPVs can be set up in an offshore tax haven to further exploit tax advantage between Singapore and these jurisdictions.

Further, tax loopholes can be potentially exploited through avoidance of inheritance tax or estate duty when the property is passed on.

The government should consider implementing a capital gains tax on all property transactions unless they are held for, say, more than 10 years.

It should also impose such a tax on, say, second non-owner-occupied homes, regardless of the holding period.

This would protect genuine long-term investors seeking wealth protection instead of pursuing short-term trading profits at the expense of a healthy property development industry in Singapore, foreigners and locals included.

In addition, the current additional buyer's stamp duty should be revised upwards for high-end property transactions worth more than, say, $5 million.

The UK government recently introduced a slew of changes, including hiking stamp duty on residential property transactions worth more than £pounds;2 million (S$4 million) and imposing a 15 per cent stamp duty on purchases made through companies in its 2012 Budget.

This has been done amid rising property prices driven by foreign purchases, and acts as a stabiliser against declining corporate income tax revenue after legislated reductions in income tax rates.

We can take a leaf out of the UK government's book to simultaneously rein in the property bubble and add to the state's coffers. Hopefully, this would provide sustainable fiscal support to enable the government to hold back GST increases beyond the five years promised.

Ee Teck Siew

[carbuncle]

Mr Ee still lives in the colonial rule era where mata wears shorts....

[Allthepies]

whining mr eeeee should just hand up his citizenship and join uk, provided uk want him:P

[phantom_opera]

Uk dental free, can?

[teddybear]

Can, don't forget UK PM get salary of about GBP150k a year only.
UK jobless got unemployment benefits!

Uk dental free, can?