Both the Singapore and Hong Kong Governments have announced increase of stamp duty rates on properties purchased by non-residents. The increase of stamp duty is one of the new measures by the Singapore and Hong Kong Governments to reduce the demand for property investment in these countries which has driven house prices up. The increase of stamp duty rates in Singapore and Hong Kong may see more foreign investment and local investment flow into Australian property as the current stamp duty rates throughout Australia are significantly lower.

Singapore

Just over a year ago, the Singapore government introduced the Additional Buyer's Stamp Duty (ABSD) to be paid by certain groups of people, including foreign residents, who buy or acquire residential properties on or after 8 December 2011. On 11 January 2013, the Singapore government increased the ABSD rates from 10% to 15% for foreign resident buyers, effective from 12 January 2013.

There is also currently Seller Stamp Duty (SSD) which imposes stamp duty on residential properties sold within 4 years (applies to properties acquired after 14 January 2011). The SSD shall be computed, based on the following rates, on the price or market value of the property, whichever is higher:

  • 16% for holding period of 1 year;
  • 12% for holding period of 2 years;
  • 8% for holding period of 3 years;
  • 4% for holding period of 4 years.

The Singapore Government has recently announced that it will also impose a new SSD on industrial properties which are bought or acquired on or after 12 January 2013 and sold or disposed of within three years. The SSD is payable based on the following rates:

  • 15% for holding period of 1 year;
  • 10% for holding period of 2 years;
  • 5% for holding period of 3 years.

The Singapore Government commented the new measures are temporary and will be reviewed based on the future market conditions.

Hong Kong

The Hong Kong Government has also coincidently sought to introduce a new Buyer's Stamp Duty (BSD) for residential properties acquired by non-residents. The Stamp Duty (Amendment) Bill 2012 was introduced into the Legislative Council on 9 January 2013. The new BSD will be charged at a flat rate of 15%. In addition, the Bill also seeks to extend the holding periods and adjust the rates of the existing special stamp duty (SSD) imposed on residential properties acquired on or after 27 October 2012 and disposed within 36 months. The SSD is payable on the amount or value of the consideration of the residential property, using the following rates:

  • 20% for holding period of 6 months or less;
  • 15% for holding period of more than 6 months but for 12 months or less;
  • 10% for holding period of more than 12 months but for 36 months or less.

Subject to enactment of the Bill, the enhanced SSD and new BSD will be applicable to all residential properties acquired on or after 27 October 2012.

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