More property cooling measures incoming: Deutsche Bank

[DKSG]

Do the rental thing yourself, especially the renewals.

Wont your agent create a scene and still proceed to invoice you ?

Do we have a right NOT to pay for agents' commission for renewal ?

This is a very good topic - anyone can enlighten me ?

DKSG

[Kelonguni]

get specialist letter for downgrade lol, i alrdy C9L9. bye bye reservist and ippt

C9L9 still easily called up for reservist. Just excuse IPPT & field activity.

[kane]

I believe we have the intelligence to help the less fortunate.

Office Boy has been using intelligent ways to help the less fortunate.

How do we know the monies collected from Stamp Duties, ABSD, GST, Prop Tax, Income Tax, SSD goes to the poor ? And not to the guy who bought the subsidized HDB and now moved on to PC, rent out HDB and show off in ST ?
I am very sure he did not use his lesser intelligence to help the less fortunate.

DKSG

Honestly, there won't be a full proof way. But since we have successfully this fella, hopefully, we can seriously help the lower income. That fella probably payed a couple of rounds of GST and is paying his dues as well.

[sh]

Wont your agent create a scene and still proceed to invoice you ?

Do we have a right NOT to pay for agents' commission for renewal ?

This is a very good topic - anyone can enlighten me ?

DKSG

Agents always try to put the agents commissions for renewals into the contract. I have always insisted that the clause be removed... So they know that they are not getting the commissions for renewal. It's a deal breaker for me if the clause stays. So far, I have been successful.

[delirious_jeff]

Wont your agent create a scene and still proceed to invoice you ?

Do we have a right NOT to pay for agents' commission for renewal ?

This is a very good topic - anyone can enlighten me ?

DKSG

If you hire them, you need to pay them. If you don't hire them, DIY... Advertise yourself, google and d/l sample TA, or get your lawyer to provide TA and submit the stamp duty thing online via IRAS yourself. Very easy...

Strictly speaking there is no such thing as "renewal", in my opinion. The TA needs to stipulate the new tenancy period and new stamp duties need to paid. I would recommend that any clauses related to "renewal" be removed from any doc.

[DKSG]

Agents always try to put the agents commissions for renewals into the contract. I have always insisted that the clause be removed... So they know that they are not getting the commissions for renewal. It's a deal breaker for me if the clause stays. So far, I have been successful.

This is one of the best advice I got from here these few years!

Thank you for sharing!

This seriously lowers my cost of rental income !

DKSG

[sh]

This is one of the best advice I got from here these few years!

Thank you for sharing!

This seriously lowers my cost of rental income !

DKSG

Also means you have get a new contract yourself, get it stamped yourself without the agent. Not difficult anyway. I usually copy the original contract, blank out the dates and signatures, fill in new dates, new rental and you're good to go!

stamping is now easily done online.

[radha08]

This is one of the best advice I got from here these few years!

Thank you for sharing!

This seriously lowers my cost of rental income !

DKSG

otherwise just hope by time rental due for renewal ur agent is no more an agent...maybe became security guard ....

[TMATT]

Can don't pay as long that statement (to pay commission when tenatns renew...) remove from the contract.

We save about $9000 when tenants renew it for another 2yrs, save the 1month commission to agent.

Not that we don't want to pay, but by doing nothing get $9K really a bit ...
Google search the rental agreement online, there lot of sample, just that inventory need to key ourself.

tks

Wont your agent create a scene and still proceed to invoice you ?

Do we have a right NOT to pay for agents' commission for renewal ?

This is a very good topic - anyone can enlighten me ?

DKSG

[jwong71]

C9L9 still easily called up for reservist. Just excuse IPPT & field activity.

so far so good, only standby MOB

[teddybear]

I'm 100% disagree with you!

Your view is superficial and you have overlooked the costs incurred due to gst.

Though gst registered business can claim back gst, however, they still need to set up a system to administer this. A whole replacement of new system as opposed to status quote. In addition, they need to hire more stuffs to administer n do papers to track n claim. All these additional costs are real and they are going to pass down to consumer!

Imagine the whole supply chain! The accumulated costs are significant!

Some company has voluntarily GST registered, you thought they will not keep that 7% gst and treated it as additional admin cost incurred?

In conclusion, The nett effect of GST or consumption tax does add pressure to inflation once it was implenemted.

Also, the collection of GST is NOT a trade off for other taxes such as property tax, income tax etc etc etc. Regardless of what types of taxes or gst, all texas are to increase business costs and hence inflation.

Just to throw you some figure for all to see:
Rich Man earned 10M a year.
Based on previous income tax of 25%, he needs to pay about 2.5M
Tax reduced to 20%, he just needs to pay about 2M. In order to pay 500k gst so that his total taxes are the same as 2.5M, he needs to consume at least 7M of goods or services in Singapore! You think this is possible. The Richmen are more likely to spend their monies oversea. You just save 500k for them to spend more oversea!

Gst benifts Richmen more than majority upper middle income! In Singapore, middle income and upper middle income are being squeezed

The government introduced GST rebates for the poor. The nett effect was that the poor was not quite affected by the introduction of GST during the introduction stage.

GST registered businesses are not affected by GST as it is a consumption tax. The collection of GST is a trade off for other taxes such as property tax, income tax etc etc etc. Such taxes are more likely to increase business costs and hence inflation.

The nett effect of GST or consumption tax does not add pressure to inflation once it is implenemted and passed that stage.

[Leeds]

For the benifit of other foruners who want to learn.

April 16, 2005

An oft-voiced concern in countries introducing value-added tax is that the introduction of the tax would set in motion a spiral in which tax, prices and wages would feed on each other -- that is, VAT would be inflationary.
If the inflationary impact is taken to mean a sustained increase in the rate of inflation then the concern would be conceptually misguided. The introduction of VAT, or any tax for that matter, can never, by itself, lead to a sustained increase in the rate of change in the price level.
Such a change in the inflation rate can only be produced by an expansionary monetary policy under all circumstances. If, however, the term is interpreted as an increase in the price level (or a one-period increase in the inflation rate), then whether VAT is inflationary in this sense would depend on a number of factors.

The Crisis Over VAT: Complete Coverage

Consider, some examples of VAT in other countries. After VAT was first introduced, a survey was conducted by Alan S Tait on its impact in several countries on the basis of International Monetary Fund data, which shows that VAT is never introduced in isolation.
There are a number of variables influencing price change, and therefore, it is difficult to empirically assess the effect of VAT on prices. The impact of VAT on prices, therefore, cannot be strictly segregated from the general trend in inflation. First, the taxes that have been replaced are also relevant. They could be a wholesale sales tax of the cascading type, a simpler VAT, a multistage ring system, a cascade production tax and so on.
Second, the design to yield equal or higher revenue also makes a difference.
Third, other concurrent changes such as rise in oil or steel prices in international and internal markets, increase in utility rates, changes in wage levels, administrative changes such as tighter monetary policy, price control, monitoring of prices and so on, make due impact on the price rise.
According to the survey, in 22 countries, no major impact on the consumer price index was identified.
In another eight, the introduction of VAT was associated with a highly defined once and for all shift in the consumer price index; only in one of these cases it could be said to have accelerated the rate of increase of the consumer price index.
In seven other cases, although the shift was permanent there was no acceleration in the rate of change in prices attributable to VAT.
Therefore, in 29 cases (22 plus seven) -- 83 per cent of the total sample -- the introduction of VAT did not alter the rate of price change.
Price control measures can be used effectively to dampen the potential price-wage acceleration of inflation after the introduction of VAT -- some good examples are Austria, France, Korea, Norway and the Netherlands.
Perhaps the most important conclusion of the survey is that there seems to be nothing inherently inflationary about the use of VAT. In 33 out of 41 cases reviewed -- over 80 per cent -- (the "shift" cases and the "little or no effect" cases), VAT was not a contributory factor to inflation.
There is another empirical study on the Netherlands on the issue of price rise. The Central Planning Bureau in the Netherlands calculated the price effect of VAT from 1969 to 1980.
While VAT was introduced in the country in 1970, the study goes up to 1980 and the trend in price rise due to VAT can clearly be seen as insignificant, or none at all.
In Indonesia, there were widespread apprehensions of substantial price rise before VAT was introduced in April 1985. However, in practice nothing like that happened.
In fact, price indexes for consumer products fell slightly in the first week after adoption of VAT, and domestic inflation for the subsequent year was well below that for the previous year.
It is evident from the discussion that inflation had not surfaced in the countries under the study, which cover a cross section of countries from the world over, because of VAT alone.
There may be a minor one-shot increase or once and for all impact to begin with under certain circumstances due to replacing other taxes and consequent adjustments by the traders and also because the overall number of tax payers would increase, but the crucial question is whether this one time increase would lead to further price escalation.
There would be offsetting price effects because of the elimination of the cascading tax. The media has reported that some sellers of consumer durable goods have said that the 12.5 per cent rate is higher than the previous one.
They are suppressing the fact that now the manufacturers shall be getting input credit for the sales tax paid on the raw materials and machinery.
Moreover, 4 per cent is lower than most of the existing rates. So the overall VAT rate will prove to be the same as the effective rate prevailing before.
The net price effect of VAT would be nil. If the VAT is an equal-yield tax, and that is how it has been designed to be in India, there would not be any effect on the overall price change, although there may be changes in relative prices.
The tax being revenue neutral, the aggregate demand is unchanged and so there would be no impact on the aggregate price level. There is unanimity among the economists all over the world that there seems to be nothing inherently inflationary about the use of VAT.
Thus, this brings us to another aspect related to VAT administration, that is, the potentially inflationary effect can be constrained by government policies to inform the public and traders about the expected effect of VAT on prices, the use of price controls, monitoring of prices, offsetting adjustment in other taxes and generous provisions to ensure full credit for previously paid taxes on inputs.
One can criticise VAT for other reasons, but it cannot be called inflationary.
Powered by

[teddybear]

You are NOT a good researcher at all. First and foremost, before you even buy in the whole concept and idea, please check what is their VAT components n basis in the article. Your understand is flawed and better appreciate me as a good teacher to educate you and pointing out your mistake.

First of all, Singapore didnt have any exemption for all necessities which constitue majority of the costs if not all. People in western world can avoid the luxury items if they don't have any money or poor. However, all those neccessities items like healthcare, medication, basic foods and clothing and children goods are all exempted for vat. Of course, the inflation due to vat is insignificant to them if they don't buy luxury items.


However, there is not exemption to all these basic neccessities such as children foods, healthcare, medication, basic foods and clothing in Singapore. Also, your article is very the old la with data from 40 years ago for same. At that time, all the items are very low and a fraction of it would be low too. Please ask IMF to conduct a new reaserch now for Singapore.

For the benifit of other foruners who want to learn.

[Leeds]

For the benefit of other forumers who are not following in another thread on the same subject. I rest my case with Mr Teddybear.

When Amber explained in simple layman term that GST does not contribute toward inflation, you challenged her in a very confronting way asking her to prove which economist say so. When I posted an article in this very thread an emphirical study showing that consumption tax does not contribute toward inflation, you continue your unappreciating way towards your 'teachers' instead of acknowledging them with thanks.

You learn from your own practical experience that GST is inflationery. However, today, you learn something new from your least appreciating people in this forum that your understanding has been wrong. However, you show no appreciation to the people who are so willing to share with you.

I always try to be polite with forumers here but your behaviour is simply perplexing. Why would Amber or indeed anyone else wants to continue engaging with you?

[phantom_opera]

many things u read in media you must take it with a pinch of salt ...even within the economic circles, there are people like Paul Krugman who believes Bernanke should print even more (well, he must like the new BOJ chief)

I prefer to do my own jalan jalan to check out prices ... I can tell u that inflation in Singapore within the last few years is simply scary

mind u, there are 3 types of inflation:

1. Price go up, quantity/quality same
2. Price same, quality drops
3. Price same, quantity less

government will always under-report inflation as many statistics like real wage growth, gdp growth will look very good with lower inflation

[SQ008]

Finally I can buy that ever elusive Conservation shophouse on cantonment road. Hopefully the price falls from 8.3M back to the good old days when it was 1.3M or lower.

[Lovelle]

Wont your agent create a scene and still proceed to invoice you ?

Do we have a right NOT to pay for agents' commission for renewal ?

This is a very good topic - anyone can enlighten me ?

DKSG

just strike off the clause in the TA

[teddybear]

I tell you, inflation are just super under-reported.
Take my example of toilet paper, prices gone up by 20%, but quality drop 70%! In order to buy same quality toilet paper, the prices must have gone up by >200% !!!
But as you know, in the CPI basket, you think they still take the price of the same quality toilet paper? I can bet with you that they don't!

Why is there a need to under-report inflation? Very simple, so that workers cannot ask for higher pay increment because inflation is low!

Why under-reporting of inflation happened? We don't know, probably due to flaws in the way CPI basket is constructed, and there is no will-power to correct that (for reasons I cited above)...

many things u read in media you must take it with a pinch of salt ...even within the economic circles, there are people like Paul Krugman who believes Bernanke should print even more (well, he must like the new BOJ chief)

I prefer to do my own jalan jalan to check out prices ... I can tell u that inflation in Singapore within the last few years is simply scary

mind u, there are 3 types of inflation:

1. Price go up, quantity/quality same
2. Price same, quality drops
3. Price same, quantity less

government will always under-report inflation as many statistics like real wage growth, gdp growth will look very good with lower inflation

[teddybear]

Why must buy conservation shophouses ? Why can't buy normal shophouses? Do you know you have to pay premium to maintain the conservation shophouses?

Finally I can buy that ever elusive Conservation shophouse on cantonment road. Hopefully the price falls from 8.3M back to the good old days when it was 1.3M or lower.

[teddybear]

Of course you rest your case because you don't have any basic to support your points of printing money and gst will not affect inflation.

.

For the benefit of other forumers who are not following in another thread on the same subject. I rest my case with Mr Teddybear.

[teddybear]

Back to the case about why rich men and high-income earners are getting better deal with below policies:
1) Income tax and corporate tax reduced from 25% to 20%
2) Estate duties abolished
3) GST implemented to make up for the short-falls due to (1) & (2).

Now, assuming a high-income earners (or businessmen) earning $10m a year.

Because of (1) above, he saved $500k a year in income taxes.

Because of (2), his wealth will not be taxed when he passed on to his children (contrary to what our minister saying that the way forward is to tax wealth, and yet the removed the very grandfather scheme, i.e. estate duty, that really tax wealth! So, isn't time for them to bring back the same old estate duty?! ).

Now, people will say, rich people pay more GSTs wah. Well, they earn $10m a year, but there is a limit to what they can consume. So, most likely they only spend $1m a year on family expenses (say they do so before GST of 7% implemented), and after 7% GST they pay GST of $70k.

Wow, because of (1) & (3), they have a net savings of $430k in taxes!
Oh my, I have not even mentioned that they will not even spend all $1m in Singapore, so the GST they pay is even less!

----------------------------
Next, we compare to the poor middle-income earner, say earning $100k a year.

Because of (1), they probably save 1% in tax or $1k a year.

They don't benefit from (2).

Now, with 7% GST, how much they pay in taxes for GST? Most middle income earners spent most of their money on living, most likely about $70k a year on their family expenses (say before GST implemented). After GST implemented, they will need to pay GST taxes of $4900 a year.

Wow! The poor middle income earners are now slapped with additional taxes of $3900 a year!

So, as we see, over the past few years, the tax changes actually favoured the rich and made them save more taxes vs the poor middle income earners who are made to pay more taxes!
Is these tax changes progressive?
What is "progressive"? Is "progressive" good?

I'm 100% disagree with you!

Your view is superficial and you have overlooked the costs incurred due to gst.

Though gst registered business can claim back gst, however, they still need to set up a system to administer this. A whole replacement of new system as opposed to status quote. In addition, they need to hire more stuffs to administer n do papers to track n claim. All these additional costs are real and they are going to pass down to consumer!

Imagine the whole supply chain! The accumulated costs are significant!

Some company has voluntarily GST registered, you thought they will not keep that 7% gst and treated it as additional admin cost incurred?

In conclusion, The nett effect of GST or consumption tax does add pressure to inflation once it was implenemted.

Also, the collection of GST is NOT a trade off for other taxes such as property tax, income tax etc etc etc. Regardless of what types of taxes or gst, all texas are to increase business costs and hence inflation.

Just to throw you some figure for all to see:
Rich Man earned 10M a year.
Based on previous income tax of 25%, he needs to pay about 2.5M
Tax reduced to 20%, he just needs to pay about 2M. In order to pay 500k gst so that his total taxes are the same as 2.5M, he needs to consume at least 7M of goods or services in Singapore! You think this is possible. The Richmen are more likely to spend their monies oversea. You just save 500k for them to spend more oversea!

Gst benifts Richmen more than majority upper middle income! In Singapore, middle income and upper middle income are being squeezed

Leeds[/B]]
The government introduced GST rebates for the poor. The nett effect was that the poor was not quite affected by the introduction of GST during the introduction stage.

GST registered businesses are not affected by GST as it is a consumption tax. The collection of GST is a trade off for other taxes such as property tax, income tax etc etc etc. Such taxes are more likely to increase business costs and hence inflation.

The nett effect of GST or consumption tax does not add pressure to inflation once it is implenemted and passed that stage.

[samuelk]

my take is that the measure seems to already hit the max. Anymore cooling and it will end in a tail spin.

[sgbuyer]

my take is that the measure seems to already hit the max. Anymore cooling and it will end in a tail spin.

Not really, I still see a lot of bullishness in the market. I think the existing buyer ABSD and loan caps is sufficient and the government should change tack and impose further increases in property taxes and seller's ABSD to convey the message that it is impossible to make money in Singapore properties if you hold less than 4 years.

Seller's ABSD should be raised to:

Holding period of 1 year : 30% of price or market value, whichever is higher
Holding period of 2 years : 24% of price or market value, whichever is higher
Holding period of 3 years : 20% of price or market value, whichever is higher
Holding period of 4-6 years : 16% of price or market value, whichever is higher
Holding period of 7 to 9 years : 12% of price or market value, whichever is higher
Holding period of 10 to 12 years : 8% of price or market value, whichever is higher
Holding period of 13 to 15 years : 4% of price or market value, whichever is higher

[DKSG]

Not really, I still see a lot of bullishness in the market. I think the existing buyer ABSD and loan caps is sufficient and the government should change tack and impose further increases in property taxes and seller's ABSD to convey the message that it is impossible to make money in Singapore properties if you hold less than 4 years.

Seller's ABSD should be raised to:

Holding period of 1 year : 30% of price or market value, whichever is higher
Holding period of 2 years : 24% of price or market value, whichever is higher
Holding period of 3 years : 20% of price or market value, whichever is higher
Holding period of 4-6 years : 16% of price or market value, whichever is higher
Holding period of 7 to 9 years : 12% of price or market value, whichever is higher
Holding period of 10 to 12 years : 8% of price or market value, whichever is higher
Holding period of 13 to 15 years : 4% of price or market value, whichever is higher

I think you may not have viewed many resale units.
With the 4 year SSD, supply of resale/subsale condos is now very dry.

This acts as a silent push or support for prices.

With the loan caps and ABSD, more properties are held back by foreigner investors. Talk to ANY Indons who own more than 3 properties in Sg, ask them what price they will sell their units - they will give you some ridiculous price like 20% above valuation.

DKSG

[indomie]

I think you may not have viewed many resale units.
With the 4 year SSD, supply of resale/subsale condos is now very dry.

This acts as a silent push or support for prices.

With the loan caps and ABSD, more properties are held back by foreigner investors. Talk to ANY Indons who own more than 3 properties in Sg, ask them what price they will sell their units - they will give you some ridiculous price like 20% above valuation.

DKSG

Office boy extra-ordinary. Your "on the ground knowledge" is amazing.

[DKSG]

Office boy extra-ordinary. Your "on the ground knowledge" is amazing.

Thank you for your kind compliments.

Very much appreciated.

DKSG

[mosaic]

I think the most effective measure is to do what the HK government is doing. Force the banks to raise the reserve requirements, make them push up the interest rates to 3-4%. Than people will start to feel the pinch of owning multiple properties. But it will be painful for everyone, including non investors.

[teddybear]

Wah, your suggestion is asking the GLC REITs shares price to go straight into a tailspin first! They are fully/highly geared up because of low interest rate!

I think the most effective measure is to do what the HK government is doing. Force the banks to raise the reserve requirements, make them push up the interest rates to 3-4%. Than people will start to feel the pinch of owning multiple properties. But it will be painful for everyone, including non investors.

[mosaic]

Wah, your suggestion is asking the GLC REITs shares price to go straight into a tailspin first! They are fully/highly geared up because of low interest rate!

ok lah. alot of them have been tapping the bond markets for long term financing. Don t think their situation will be so jialat.

[teddybear]

That basically just delays their inevitable? When will REITs crash with increases in interest rate? They can't last for more than 3 years before their stock prices crash!

ok lah. alot of them have been tapping the bond markets for long term financing. Don t think their situation will be so jialat.