Singapore home market unaffected by Indonesian tax amnesty
Singapore home market unaffected by Indonesian tax amnesty
Lower than expected liquidation since the introduction of the tax amnesty program
The implementation of the Tax Amnesty Scheme (TAS) in Indonesia has not had any material impact on Singapore’s residential segment, said Credit Suisse in a report.
Credit Suisse noted that Indonesians have historically been amongst the largest foreign buyers of prime residential property in Singapore. As such, when the TAS was introduced, there were concerns that Indonesians would liquidate their property holdings in Singapore and repatriate the assets back to Indonesia, adding downward pressure on prime residential prices.
However, it was found that only USD9.8 billion (SGD13 billion) of assets have been repatriated, significantly lower than USD184 billion (SGD251 billion) in declared assets.
On the other hand, the TAS has also not resulted in any rise in Indonesians buying prime residential properties. Based on Urban Redevelopment Authority (URA) data up to 20 September, foreigners made up 610 of 1,844 buyers in the prime Core Central Region (CCR), with Indonesians accounting for 136 units.
In fact, year-to-date volumes have continued to be subdued, in light of cooling measures like the Additional Buyers Stamp Duty (ABSD), which is targeted at foreigners.
More: Home prices in Singapore have fallen to a record 7-year low
“Consequently, foreigners represented 33 percent of total CCR sales year-to-date, in line with historical averages, while Indonesian buyers represented 7.4 percent of (the) total (sales), below historical averages of 10.0 percent,” said the report.
As such, the modest increase in foreign buyers at new launches may have been driven by a combination of project attributes and discounts / incentives.
At Cairnhill Nine, for instance, 50 percent of the 215 units sold were bought by Singaporeans, with the remainder well distributed among Indian nationals, mainland Chinese, and Indonesians.
“We understand recent new launches of prime properties such as The Nassim (10 units sold) and Gramercy Park (36 units sold) too saw similar buyer profiles, while 80 percent of buyers at Tower 1 of OUE Twin Peaks were Singaporeans, likely driven by its deferred payment schemes,” added Credit Suisse.
This article originally appeared on PropertyGuru.com.sg on 30 September 2016
Tax and real estate law will be one of the discussions in the next Property Report Congress on 13 October 2016 at the Fairmont Jakarta. The whole-day conference Property Report Congress Indonesia is a dedicated, high-level forum for industry leaders, VIPs, and real estate professionals to discuss how to continue driving growth and excellence in one of the world’s dynamic real estate markets. For tickets, partnerships and enquiries, visit the official website or contact [email protected].
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Source: Property Report