With the local economy continues to work itself out of the shadow of financial downturn and H1N1 flu, the Singapore property market has been doing brisk business.The business is so great that government has turned cautious on the sustenance of the current phenomena. Past two years has seen a flurry of buying activities and bullish developers have been assaulting our senses with their incessant advertisements on a daily basis, all hawking for our attention on their properties.
No doubt the experience of the mid nineties boom and bust cycle still stays fresh in the administration's mind.With the benefit of past experience, government is ready to pull out all stops to make sure this would not repeat itself in the near future.
Among them are land supply decision, money supply tightening and tax policies. We are about to tell you how this individual measure works and how effective it can put the overheated market under control. There are actually a few tools at Singapore government's disposal to better handle any similar incident.
As a result, speculation of newly built property would cut down drastically.Land Supply Decision - Government is the biggest land owner in this island and when they do decide to cut down land supply for development, it will have a direct impact on the property market. Developers would have nowhere to turn to for the building of their luxury properties and correspondingly minimize the new launches.
The maximum allowed loan quantum is 90 percent of property value.Credit Tightening - A popular rumor is making rounds in the property sector that a comprehensive review of the credit market is underway. When government does decide to bring this down to 80 percent, or even lower, the whole market would be hit hard.
Government introduced capital gains tax at the height of nineties property boom but has since abolished it. Capital Gains Tax - This is a tax derived from the profit obtained from the sales of property. When this taxation is applied, it will treat profit as income and subject to the prevailing tax rate at either individual or corporate level.If this is brought back into the fray, it is expected demand would be slowed down significantly and will be effective to discourage speculation as profit would be reduced.
Property Tax - Another effective way to deal with an overheating market is to raise the property tax.Again based on reduced profit psychology, speculative activities could be significantly reduced due to the perceived small profit.
Double Stamp Duty - A legislative change may necessitate that both buyer and seller pay stamp duty. When it is implemented both ways, it is hoped that sellers/speculators would be more reluctant to freely sell/trade a piece of property.Currently stamp duty applies to buyer only.
But it is still early to tell if the current property interest is genuine and thus sustainable or if really another bubble in the making.These are just some of the measures that government can use in its attempt to put the property market under control. - 29904
No doubt the experience of the mid nineties boom and bust cycle still stays fresh in the administration's mind.With the benefit of past experience, government is ready to pull out all stops to make sure this would not repeat itself in the near future.
Among them are land supply decision, money supply tightening and tax policies. We are about to tell you how this individual measure works and how effective it can put the overheated market under control. There are actually a few tools at Singapore government's disposal to better handle any similar incident.
As a result, speculation of newly built property would cut down drastically.Land Supply Decision - Government is the biggest land owner in this island and when they do decide to cut down land supply for development, it will have a direct impact on the property market. Developers would have nowhere to turn to for the building of their luxury properties and correspondingly minimize the new launches.
The maximum allowed loan quantum is 90 percent of property value.Credit Tightening - A popular rumor is making rounds in the property sector that a comprehensive review of the credit market is underway. When government does decide to bring this down to 80 percent, or even lower, the whole market would be hit hard.
Government introduced capital gains tax at the height of nineties property boom but has since abolished it. Capital Gains Tax - This is a tax derived from the profit obtained from the sales of property. When this taxation is applied, it will treat profit as income and subject to the prevailing tax rate at either individual or corporate level.If this is brought back into the fray, it is expected demand would be slowed down significantly and will be effective to discourage speculation as profit would be reduced.
Property Tax - Another effective way to deal with an overheating market is to raise the property tax.Again based on reduced profit psychology, speculative activities could be significantly reduced due to the perceived small profit.
Double Stamp Duty - A legislative change may necessitate that both buyer and seller pay stamp duty. When it is implemented both ways, it is hoped that sellers/speculators would be more reluctant to freely sell/trade a piece of property.Currently stamp duty applies to buyer only.
But it is still early to tell if the current property interest is genuine and thus sustainable or if really another bubble in the making.These are just some of the measures that government can use in its attempt to put the property market under control. - 29904
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