Singapore Developers & REITs Hit By Higher Buyer’s Stamp Duty Rates

SINGAPORE – The stock or unit prices of local property developers and Singapore-listed real estate investment trusts (S-REITs) fell on Wednesday a day after the government announced higher buyer’s stamp duty (BSD) rates for both residential and commercial properties, reported The Straits Times on Wednesday afternoon (15 February, SGT).

This occurred amidst a general sell-off in Asian markets after inflation figures in the United States resulted in rate hike fears.

As of 11:40 pm on Wednesday, Singapore’s benchmark Straits Times Index dipped 1 percent to 3,285.19 points.

At the same time, the unit price of CapitaLand Integrated Commercial Trust (CICT), the biggest REIT listed on the local bourse, slid by 2.04 percent. The stock price of one of the city-state’s largest commercial property landlord, City Developments Limited (CDL), also fell by 2.8 percent.

As for Mapletree Logistics Trust and real estate developer Hongkong Land, their stock/unit prices declined by 1.8 percent.

In his Budget speech on Tuesday, Finance Minister Lawrence Wong said the BSD rate will be hiked for more expensive non-residential properties, such as office space, retail premises, and industrial assets.

Specifically, the part of a property’s selling price over S$1 million but up to S$1.5 million will be taxed at 4 percent, while any amount more than S$1.5 million will be taxed at 5 percent. This is up from the previous BSD rate of 3 percent for non-residential properties.

On the other hand, the BSD rate will increase from 4 percent to 5 percent for part of the selling price of residential properties between S$1.5 million and up to S$3 million. For the portion in excess of S$3 million, it will be taxed at 6 percent.