http://www.propertywire.com/news/asia/singapore-property-tax-plans-200909163507.html
PropertyWire, 16 Sep 2009
Singapore tries to calm property industry fears over new tax plans
The government in Singapore has moved to clarify proposed changes in
income tax laws which many believed could be harmful to the country’s
property industry.
A change due to take effect in January next year
was widely regarded as a move to combat speculation in the real estate
sector as it was thought it would load more taxes on those who owned
more than one property and sold them within four years for a profit.
But now the Ministry of Finance
has said that there will be no tax on the gains from an individual who
sells a property after 1 January if they have not sold any other
property in the previous four years.
‘The proposed change is therefore not an anti-speculation measure.
It does not mean that individuals
who have sold more than one property within a four year period will
automatically be subject to income tax,’ said the MOF in a statement.
When initial news of the potential change got around, it sparked off
rumours that the government was trying to curb speculation in the
property market.
It sent property investors into panic mode, many of whom returned to the market only recently.
Prior to MOF´s clarification, there were fears that investors might
pull out of the property market due to the rumours and confusion of the
new ruling, which has undermined the prices of several properties.
But despite the reassurance by the government, industry watchers are skeptical of the changes.
Some of whom stand by the anti-speculation theory.
‘We remain believers of the idea that the government may be sending out
a signal through this proposal to cool property transactions,
especially in the high-end, said Donald Chua, an analyst at CIMB.
In 1996, the government imposed tax on the gains of individuals made
from selling properties within three years of purchase. The rule
continued until 2001 when it was abolished.
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