- Singapore imposes the highest stamp duty on foreign buyers
- Hong Kong and Cape Town trail Singapore in stamp duty rates
- Major American cities have much lower stamp duty rates
At a whopping 64% of the selling price, Singapore ranks as the highest in the world for total stamp duty rates for foreigners looking to snap up a residential property, according to a study by Savills.
This is in the wake of the Singapore government’s recent action to increase the Additional Buyer’s Stamp Duty (ABSD) by 100% for foreigners purchasing residential property from 30% to 60%.
Foreign property purchases make up 5% to 7% of the total sales, with the investment value for residentials totalling S$1.58 billion.
The Singapore residential sector recorded a quarterly growth of 12.5% in the fourth quarter of 2022. Prime residential prices remain steady, supported by the resilient Singapore dollar and inundation of high net worth individuals setting up companies and family offices.
Executive Director of Research & Consultancy at Savills Singapore Alan Cheong says this high ranking is to Singapore’s benefit.
“Although Singapore has the highest stamp duty payable by foreigners buying private residential properties, it is a testament of Singapore’s attractiveness as a safe haven pad for the ultra high net worth individuals.”
Alan Cheong, Executive Director of Research & Consultancy, Savills Singapore
Cheong added that Singapore has been using ABSD since 2011 as a means to restrict the flow of foreign money pouring into residential properties, and that the latest recalibration is an attempt to nurture a stable private property market.
“The need to add friction to the free flow of foreign money into the residential sector here stems from the belief that real estate prices should reflect fundamentals,” he said.
“Because of Quantitative Easing, the global pool of money is more than what real economies can absorb to generate a productive return.
“If left unchecked, runaway prices would create domestic social discontent as working Singaporeans find themselves priced out of their aspirations.”
Buying, holding, and selling a $2M property (April 2023)
Hong Kong trails Singapore with 31.3% tax, followed by Cape Town at 13.5%.
On the lower end of the scale, New York, Los Angeles, San Francisco and Miami stamp duties come in at 4%, 1.1%, 0.9%, and 0.5% respectively.
But since April 1 of this year, Los Angeles has implemented a 4% tax on all residential and commercial properties that are transferred or sold for more than US$5 million and a 5.5% tax for all properties transferred or sold for US$10 million or more.
However, Canada’s two-year ban on foreign ownership of residential property came into effect in January of this year.
Ireland and Portugal have cancelled their golden visa programs, citing various effects that it had on the property markets. This program allowed the option for wealthy individuals to acquire a residence permit and even citizenship by purchasing a house or making a relatively large investment.
