Wednesday, February 13, 2013

Real property transaction values to be reflected after Amendment Bill is introduced

Feb 13, 2013 - By: Singapore

An Amendment Bill has been introduced for first reading in Parliament to promote greater transparency of home prices in the property market.

The Controller of Housing would be empowered to require developers to disclose any benefits that they give to buyers in a sales transaction. The benefits they have to declare include reimbursements of stamp duty, discounts and vouchers. In addition, the Controller is also entitled to publish the information and use it for analysis and research purposes.

At present, developers are already required to submit monthly sales data on their projects, including prices of units sold based on options granted. The Urban Redevelopment Authority (URA) then releases the data on the 15th of the following month. However, the prices would not reflect any additional benefits that have been received by the buyers, such as reimbursements which are usually given after the option is exercised or upon the completion of the transaction. As a result, the developers’ sale prices submitted to URA each month and lodged in the caveats may not reflect the true property values.

Analysts in the real estate market largely welcome the Amendment Bill as it comes with the overall objective of providing the purchaser and public better clarity, accuracy and transparency with respect to sale prices and details as to what discounts were offered.

Apart from enabling URA to collect and publish more comprehensive and timely information on transacted prices of private homes, amendments to the Bill would also regulate the set-up of showflats to ensure greater accuracy in how developers' represent the housing units on sale.

In addition, the criteria for granting licenses to housing developers would be tightened. For instance, a license would not be granted to a developer if any directors had been convicted of, or has served a sentence of imprisonment for a fraud or dishonesty-related offence in or outside Singapore within a period of five years before the date of the license application.

As the fine stipulated in the current Act was set in 1965, the Government also proposed to increase the fine amount by five-fold to sustain the deterrent effect. The changes are expected to be tabled for a second reading at the next Parliament seating.

Martin Koh | 86666 944 | R020968Z
Sherry Tang | 9844 4400 | R020241C

Senior Sales Director
DTZ Property Network Pte Ltd (L3007960A)

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