(Bloomberg) -- Singapore is raising property taxes in a bid to cool the housing market, which has defied the slump afflicting other countries.
The government is increasing stamp duties for second-home buyers and foreigners purchasing private property, it said in a statement.
The measures follow tax increases that were imposed in December 2021 and a tightening of home-loan limits in September 2022. While those moves had a “moderating effect,” property prices last quarter showed “renewed signs of acceleration amid resilient demand,” the statement said.
Singapore's property sector has remained buoyant even as countries elsewhere face slowdowns due to soaring interest rates and inflation.
“Demand from locals purchasing homes for owner-occupation has been especially strong, and there has also been renewed interest from local and foreign investors in our residential property market,” the government said. “If left unchecked, prices could run ahead of economic fundamentals, with the risk of a sustained increase in prices relative to incomes.”
The government raised the Additional Buyer's Stamp Duty to 20% from 17% for Singapore citizens buying a second home. It was increased to 30% from 25% for citizens purchasing their third or subsequent home, and for permanent residents purchasing a second residential property.
For more details on the move, click here
For foreigners buying any home, the rate jumped to 60% from 30%. The increases take effect on Thursday according to the statement, which was issued by the Ministry of Finance, the Ministry of National Development and the Monetary Authority of Singapore.
Home prices could rise as much as 5% in 2023 after gaining 3.2% in the first quarter, due to higher rents and favorable supply-demand dynamics, according to Bloomberg Intelligence.
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