Mar 5, 2013 - PropertyGuru.com.sg
The latest property taxes on Singapore’s luxury homes drew mixed reactions from analysts with some saying it will unlikely turn off investors, reported World Property Channel.
“If we look at it in absolute quantum, in thousands of dollars, the increase is only a few thousands of dollars,” said Executive Director of Research and Consultancy at SLP International, Nicholas Mak.
“And I think if the person is able to spend a few million dollars on a high-end luxury property, I believe they can well afford this increase in property tax,” he added.
The government unveiled the new property tax — which could increase by over 20 percent, depending on the use and type of property — a few days after Hong Kong announced a similar tax increase.
“From a progressive tax view point, it's to be expected and probably quite fair,” said Tan Su Shan, DBS Group Wealth Management Managing Director.
“From a developers' point of view, it's yet another pill to swallow.”
However, a number of analysts see the new tax increase as a game-changer. Leonard Ong, tax partner in KPMG Singapore, expects landlords to pass the costs “on to tenants in the form of increased rents” while some may turn to commercial properties instead.
“This will drive up the cost of commercial properties and overall business costs,” Ong added.
Property firm Knight Frank stated that home prices in Singapore jumped 50.5 percent from Q4 2006 to the end of 2011. Notably, an increase of 33 percent in home prices soared in 2007 alone.
“The property tax is a wealth tax and is applied irrespective of whether lived in, vacant or rented out," explained Finance Minister Tharman Shanmugaratnam in his budget speech. “Those who live in the most expensive homes should pay more property tax than others.”
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