Policy change aims to provide flexibility in a challenging market
Singapore’s government has announced a reduction in the Additional Buyer’s Stamp Duty (ABSD) clawback rate for housing developers who sell at least 90% of their units within the prescribed sale timeline. This adjustment, revealed by Finance Minister Lawrence Wong in the 2024 Budget speech, is designed to offer developers greater flexibility in a slower property market.
Currently, developers receive a 35% remission on the 40% ABSD, provided they sell all units within five years. However, if they fail to meet this deadline, they must repay the ABSD with interest, making it a significant financial burden. Under the new rules, developers who sell 90% or more of their units within the deadline will face a lower ABSD clawback rate, easing pressure on sales strategies.
Industry experts have welcomed this change, noting that:
Developers will have more flexibility in pricing and marketing their projects.
The adjustment offers partial relief, but many developers will still aim to sell out their projects within five years.
The luxury property market may benefit the most, as high-end units tend to take longer to sell.
Despite the revision, analysts emphasize that developers are still incentivized to meet the full sales target to avoid ABSD penalties. The government maintains its property cooling measures while providing targeted relief to the sector.
