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Singapore Hikes Property Taxes

Monday, December 12, 2011

Singapore’s government has announced an Additional Buyer’s Stamp Duty (ABSD) to be imposed on certain categories of residential property purchases, in addition to the current buyer’s stamp duty.

The ABSD applies, at a rate of 10% on the purchase price or market value of the property (whichever is higher), for purchases by foreigners and non-individuals (including corporate, trusts and collective investment schemes, amongst others) of any residential property.

Permanent residents owning one and buying a second and subsequent residential property pay an ABSD of 3%; and Singaporeans owning two and buying the third and subsequent residential property also pay an ABSD of 3%.

The ABSD took effect on December 8, 2011. Remission of ABSD will be given for options granted on or before December 7, 2011 and exercised within three weeks (that is, on or before December 28) or the option validity period, whichever is the earlier.

The ABSD applies in addition to the existing buyer’s stamp duty on property purchases, which is charged at the following rates: 1% on first SGD180,000 (USD140,000) of the purchase consideration or market value of the property (whichever is higher), 2% on the next SGD180,000 and 3% for the remainder.

It was explained that the government's objective is to promote a sustainable residential property market where prices move in line with economic fundamentals. Prices of private residential properties have continued to rise lately, albeit more slowly in the last two quarters. Prices are now 13% above their peak in the second quarter of 1996 and 16% above the more recent peak in the second quarter of 2008.

However, it has been noticed that, even with the current economic uncertainties, the demand for private residential property remains firm. Private property in Singapore continues to attract investors, local and foreign. Concern is expressed that excessive investment demand will make the property cycle more volatile, and thus increase the risks to Singapore’s economy and its banking system.

The government has therefore decided to impose the ABSD to moderate investment demand for private residential property and promote a more stable and sustainable market. A higher ABSD rate for foreign buyers in particular is felt to be necessary, in view of the large pool of external liquidity and strong buying interest from abroad, and the relatively small size of the Singapore market. Foreign purchases accounted for 19% of all private residential property purchases in the second half of 2011.

Tharman Shanmugaratnam, Deputy Prime Minister and Minister for Finance, confirmed that the government will continue to monitor the property market and adjust its property policies in step with changes in the market and the economy.

He added that “we have always had open markets and must keep them that way. However, the reality is that investment flows into our property market are now larger than before, and unlikely to recede as long as interest rates remain low. The additional buyer’s stamp duty should help cool investment demand, and avoid the prospect of a major, destabilizing correction further down the road.”

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Offshore Trusts Guide: Introduction

The History of Offshore Trusts
Development of Professional Competence in the Jurisdictions
What Future for the Trust?
The New Age of Transparency
The Swiss Association of Trust Companies
The Society of Trusts and Estates Practitioners

Offshore Trusts Guide: Jurisdictions

Bahamas

Bahamas: Legal Framework and Formation Rules and Fees
Bahamas: 2006 Private Trust Companies Legislation

Barbados

Barbados: Legal Framework and Formation Rules and Fees
Barbados: Supervisory and Licensing Regime and Fees

Bermuda

Bermuda: Legal Framework and Formation Rules and Fees
Bermuda: Supervisory and Licensing Regime and Fees

British Virgin Islands

British Virgin Islands: Legal Framework and Formation Rules and Fees
British Virgin Islands: Special Trusts Act 2003
British Virgin Islands: The Trustee Act 2003
British Virgin Islands: :Supervisory and Licensing Regime and Fees
British Virgin Islands: New Laws on Private Trust Companies
British Virgin Islands: New Private Trust Company Regulations

Cayman Islands

Cayman Islands: Legal Framework and Formation Rules and Fees
Cayman Islands: Supervisory and Licensing Regime and Fees

Cook Islands

Cook Islands: Legal Framework and Formation Rules and Fees
Cook Islands: Supervisory and Licensing Regime and Fees

Cyprus

Cyprus: Legal Framework and Formation Rules and Fees
Cyprus: Supervision, Licensing and Tax

Gibraltar

Gibraltar: Legal Framework and Formation Rules and Fees
Gibraltar: Legislation, Regulation and Supervision

Guernsey

Guernsey: Legal Framework and Formation Rules and Fees
Guernsey: Trusts Law 2007

Isle of Man

Isle of Man: Legal Framework and Formation Rules and Fees
Isle of Man: Supervisory and Licensing Regime
Isle of Man: Uses Clients and Tax Treatment

Jersey

Jersey: Legal Framework and Formation Rules and Fees
Jersey: Supervisory and Licensing Regime
Jersey: Trusts Amendment Act 2006
Jersey: Foundations

Liechtenstein

Liechtenstein: Legal Framework and Formation Rules and Fees
Liechtenstein: Regulation Supervision and Transparency
Liechtenstein: Characteristics of Liechtenstein Trusts
Liechtenstein: Foundations

Madeira

Madeira: Legal Framework and Formation Rules and Fees

Malta

Malta: Legal Framework and Formation Rules and Fees
Malta: The Trust and Trustees Act 2004

Mauritius

Mauritius: Legal Framework and Formation Rules and Fees
Mauritius: Characteristics of the 2001 Trusts Act
Mauritius: Additional Provisions of the 2001 Trusts Act
Mauritius: Tax Treatment

Monaco

Monaco: Legal Framework and Formation Rules and Fees

Nevis

Nevis: Legal Framework and Formation Rules and Fees

Panama

Panama: Legal Framework and Formation Rules and Fees
Panama: Requirements for Acting as Trust Company in Panama

Seychelles

Seychelles: Legal Framework and Formation Rules and Fees

Turks & Caicos

Turks & Caicos: Legal Framework and Formation Rules and Fees
Turks & Caicos: The Voidable Dispositions Ordinance

Vanuatu

Vanuatu Legal Framework and Formation Rules and Fees




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