Singapore Budget 2018: Higher stamp duty not a cooling measure, say analysts

From today, buyer stamp duty will be increased by 1% for home buyers whose purchase of a private residential apartment costs $1 million and above. Announced during 2018 Budget speech yesterday, this move is seen as a tax on those with higher income, rather than a cooling measure.

This means any residential property with value above $1 million will be charged a stamp duty of 4%, whereas any value below that remain unchanged at 1% for the first $180,000, 2% for next $180,000 and next $640,000 at 3%.

 Old  stamp duty
First $180,000 1%
Amount above $180k
and below $360k
Amount above $360k 3%
 New stamp duty
First $180,000 1%
Amount above $180k
and below $360k
Amount above $360k
and below $1m
Amount above $1m 4%

This move applies to only residential properties, and therefore commercial and industrial properties remain unchanged at a maximum of 3% for stamp duty.

Not Cooling Measure, so does it affect home buyers?

While this announcement caught many by surprise, property experts opined that the increase on stamp duty payable will not affect most home buyers.

KEO of ERA, Mr Eugene Lim says the additional stamp duty is not significantly large “to affect the current momentum adversely”, as most home buyers go for HDB flats, and very few of them are valued at above $1m.

Mr Lim further added that for minority buyers who purchase private residential apartments, 36% of them go for below $1m properties, and one-third buy homes valued at between $1m and $1.5m.

For a $1.5m private residential apartment, home buyers have to fork out an additional $5,000 for stamp duty.

Other property experts expressed that:

  • the higher stamp duty is unlikely to dampen buying demand, as private property prices are expected to grow between 5 per cent and 7 per cent this year
  • new launches would also benefit as the current mix of homes in most condominiums tends to tilt towards smaller units
  • developers keeping an eye on the market for collective sales, however, may “pull back a little”, as the stamp duty would be hefty for such deals, which run into the hundreds of millions of dollars
  • Government is sending a little signal that they are monitoring the market and do not want to see prices increasing beyond fundamentals


For the full Straits Times article, please click here.