Revised ABSD rules for upgraders, more GLS sites in OCR among PropNex’s Budget 2023 wishlist

PropNex Realty has issued a wish list in anticipation of the Budget 2023 announcement on Feb 14. The wish list, outlined in a Jan 12 press release, “hopes to further support home ownership as well as to meet housing aspirations of Singapore households”. Ismail Gafoor, executive chairman and CEO of PropNex, remarks “In Budget 2023, we hope that some housing policies could be tweaked to help certain segments of the population own homes and upgrade to a private property”.

PropNex’s wish list includes a revision of additional buyer’s stamp duty (ABSD) remission rules for married couples who are upgrading from HDB flats to private homes. Currently, HDB upgraders need to pay ABSD upfront within 14 days of signing the sales and purchase agreement. They can apply for an ABSD remission if they sell the HDB flat within six months after the date of purchase or temporary occupation permit (TOP) or certificate of statutory completion (CSC), whichever is applicable. Noting that the 17% ABSD payment is “the biggest hurdle” for upgrading to private property, the company advocates for aligning the rules to those applicable to buyers upgrading from an HDB flat to an executive condominium (EC). In this scenario, buyers do not need to pay ABSD upfront and are required to sell their flat six months after their new EC receives its temporary occupation permit.

Another call for clarification is in relation to the wait-out period announced as part of the cooling measures rolled out in September 2022. The 15 month wait-out period for private homeowners to buy an unsubsidised HDB resale flat does not apply to seniors aged 55 years and above. At the time of the measure’s announcement, the government had referred to the wait-out period as a temporary measure that would be subsequently reviewed. PropNex is recommending further details be provided, “hoping that the government can provide more clarity as to when this rule will be reviewed, and perhaps offer an update in the second half of 2023 on the initial impact of the wait-out period on moderating resale flat demand and prices”.

To address supply issues, PropNex is requesting for an increase in Government Land Sale (GLS) sites located in the Outside Central Region (OCR) under the 2H2023 GLS Programme. Last month, the government unveiled the 1H2023 GLS Programme with seven sites on the Confirmed List and nine sites on the Reserve List. The sites can yield a total of 4,090 residential units including ECs, with 2,120 units located in the OCR. This figure is lower than the 2,550 OCR units released under the 2H2022 GLS Programme — 2,550. The company believes that the injection of more OCR residential Bukit Batok EC supply will play a part in keeping mass-market home prices stable in the future.

Lastly, PropNex is suggesting the government reduce waiting times for Build-to-Order projects from the current length typically exceeding four years down to three years. As borders reopen, workers return and productivity measures usable, “perhaps the government can consider building more BTO projects in advance ahead of the sales launch”.