Monday, January 14, 2013

Permanent residents hit by changes


The Straits Times
Monday, Jan 14, 2013

PERMANENT residents (PRs) now face unprecedented limits on their ability to buy property in Singapore.

To buy a first property, whether a private unit or a Housing Board resale flat, PRs must pay an additional 5 per cent stamp duty. If they buy a second or subsequent property, the stamp duty is an extra 10 per cent, up from the current 3 per cent more.

Also, PRs who own an HDB flat can no longer sub-let their entire flats, although they may still rent out individual rooms.

Those already sub-letting their flats can do so only until the end of the current approved period.

Finally, while Singaporean flat owners can buy a private property and keep their HDB flats too, PRs will no longer be allowed this dual ownership: On buying a private property, they must sell off their flats within six months.

The changes take effect today.

PRs were stunned by the severe measures, which the Government, said Deputy Prime Minister Tharman Shanmugaratnam yesterday, had "thought hard about".

Although PRs have never been given access to new, subsidised HDB flats, this is the first time they are being "taxed" for all property purchases, private or public.

Mr Tharman said the move was "necessary, particularly because of the HDB resale market, where PRs are taking up a larger share of new buying".

While PRs own only a small proportion of HDB flats, they formed "a rising component of demand in the last year" for all forms of housing, he said.

There are 49,190 PR households that own HDB flats. Latest data show 2,142 PR-owned flats are rented out - about 5 per cent of flats approved for sub-let.

PRs last night were dismayed.

"It's not fair," said Chinese national Thomas Feng, on the new sub-let ban.

"In this case, why let PRs buy flats at all?"

The accountant, a Henan native in his early 30s, has been a PR since 2007 and owns a four-room flat in Kallang.

Myanmar software developer Zarni Win said she could accept the policy last year that set the duration of the sub-let limit at five years.

"But this new change is too much. What if we have a job posting overseas, then we have to continue paying a mortgage without staying in the flat?" said the 34-year-old.

Briton Francis Chandler, 41, an IT professional, who has been a PR since 2010 said: "The PRs I know are all living in their property. Whereas I know a lot of Singaporeans who have multiple properties for investment."

Others were resigned.

"Of course it is unfair," said Filipino architect Ram Poyaoan, 48, who owns a five-room flat in Pasir Ris. "But what can we do? It's like living in your uncle's house. You don't get the same treatment."



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