Singapore raised taxes on private property purchases in a surprise move late on Wednesday night that includes a doubling of stamp duties for foreigners to an eye-watering 60%.
Authorities in Singapore, where real estate is a safe haven investment for wealthy foreigners, keep close tabs on property prices to ensure housing remains affordable for locals and stays in step with economic fundamentals.
The additional buyer's stamp duty (ABSD) for Singapore citizens and permanent residents will also face increases but much smaller ones, and only on their second and subsequent properties, according to a joint statement from the finance ministry, national development ministry and central bank.
The ABSD on Singaporeans' second and subsequent home purchases will rise to 20% from 17%, and 30% from 25%, respectively. Meanwhile, those for permanent residents will rise by 5 percentage points to 30% and 35%, respectively, for their second and subsequent properties purchases.
The revised rates will apply from Thursday.
The government said in a news release that property prices showed "renewed signs of acceleration amid resilient demand."
"If left unchecked, prices could run ahead of economic fundamentals, with the risk of a sustained increase in prices relative to incomes," the authorities said.
The government had introduced two rounds of cooling measures over the last two years. The last time it raised stamp duties was in December 2021, when it said the property market was "buoyant" despite the economic impact of COVID-19.
The government said that based on last year's data, it expects the stamp duty changes to affect roughly 10% of residential property transactions.
Singapore's private home prices increased by 3.2% in the first quarter of this year, a jump from the 0.4% increase in the previous quarter, according to Urban Redevelopment Authority (URA)'s flash estimates earlier this month.
Property prices and rents in Singapore have been climbing steadily over recent years due to construction delays caused by the COVID-19 disruptions.
