Cooling measures: Hong Kong couple still willing to pay nearly $1m in stamp duty for S'pore condo

Grace Leong
Senior Business Correspondent

15 January, 2022

SINGAPORE - The new property cooling measures took property agent Jaeson Lin's foreign clients by surprise but they decided to bite the bullet and buy their new apartment.

The couple from Hong Kong had been scouting for homes in Clementi, Bukit Timah and Orchard Road for the past year and were still willing to fork out nearly $1 million in ABSD on a $3.3 million penthouse at Verdale, a 258-unit condo in Bukit Timah.

Mr Lin, who is from Propnex, said the couple moved to Singapore in July 2020 when their IT company relocated its headquarters here.

They had been renting a three-bedder in Orchard Road for about $10,000 a month for over a year.

The old additional buyer's stamp duty (ABSD) rate of 20 per cent would have meant a levy of $660,000 for the 1,830 square foot penthouse, but the new rate of 30 per cent pushed that up a further $330,000 to make an eye-watering taxbill of $990,000.

Still, his clients stuck with the deal due to Singapore's political stability and safe-haven investment status.

"Their two children are also studying at international schools here, so they decided to buy a home instead of continuing to rent," said Mr Lin.

Another couple, Ms Ashley Chua and boyfriend Daryl Kwa, both 29, also bought a condo at Verdale on Dec 29 - a week or so after the cooling measures - but the Singaporeans are not subject to ABSD because they are first-time buyers.

They had been trying for over a year to buy a Build-To-Order (BTO) flat and also applied for a Sale of Balance Flat in the Bidadari HDB estate but gave up after being rejected about four times.

"It's easier to win a lottery than get a BTO ballot," said Ms Chua, who is a director of operations with a media company. Mr Kwa is an accounts director at the same company.

In December, they decided to explore private housing and found their 700 square-foot two-bedder after viewing five condos. Concerns over possible price increases in 2022 prompted the couple to put down a 5 per cent booking fee of $64,000 on Dec 29 for their nearly $1.3 million condo.

"A day later, we found out the developers at Verdale were going to raise prices on Jan 6," Ms Chua said.

Fellow Singaporean Jessica Ong, 44, and husband, KL Hoon, 45, bought a three-bedroom condo at Normanton Park on January 5 for $1.6 million. They are also not subject to ABSD because they had sold their previous condo in Sengkang last November before making the purchase.

They have taken out a $1.2 million loan at about 1 per cent interest for 21 years, and will use some of their Central Provident Fund (CPF) savings for the purchase.

"The interest will be paid from sale proceeds of the Sengkang condo," Ms Ong said.

Despite the higher ABSD rates for Singaporeans buying a second property, Ms Ong, a medical technologist at SGH, said it is "still possible to have that dream of owning an investment property".

"But we should have a reserve fund of about two to three years' worth of both our salaries. Just in case, one of us isn't working, so we can pay for the property," she said.

The couple, who have a nine-year-old daughter, will rent for two years until the Normanton Park condo receives its Temporary Occupation Permit (TOP) in 2024.