Budget 2024: Implications on Singapore’s Real Estate

Jee Sheong

February 17, 2024

Table of content

In Deputy Prime Minister (DPM) Lawrence Wong’s Budget 2024 speech, several points directly affect the real estate market, with potential implications both positive and negative. While it’s too early to determine the long-term effects of these announcements, similar to past housing measures, they aim to maintain a resilient and strong local real estate market. This article provides a summary of the key points from the Budget 2024 speech impacting real estate.

Extension of Additional Buyer’s Stamp Duty (ABSD) Concessions

Presently, married couples with at least one Singaporean Citizen can seek a refund of Additional Buyer’s Stamp Duty (ABSD) upon buying a new private residential property. To be eligible, they must sell their first property within six months of purchasing the replacement or its completion. 

In Budget 2024, DPM Lawrence Wong announced an extension of this concession to singles aged 55 or older. This change aims to support senior citizens looking to downsize. Similar to married couples, eligible singles must sell their initial property within six months. The additional requirement is that the replacement property must be of lower value than the first property to qualify for the ABSD refund. This change will take effect on February 16, 2024.

The ABSD rates for private residential developers will be decreased. Previously, developers would be granted ABSD remissions if they manage to sell all units in the development within five years; otherwise, they face a full clawback. Now, they’ll face lower ABSD rates if they sell 90% of units within a 5-year timeframe. This change aims to ensure timely housing supply and give developers more flexibility. More information will be released in a statement on February 16.

New Annual Value (AV) Bands for Property Tax

Property taxes for residential properties are determined by their market value, with rates varying based on annual value bands. The lowest band threshold will rise from $8,000 to $12,000, and the highest threshold will increase from over $100,000 to over $140,000. Adjustments will also be made to intermediate bands. This adjustment means homeowners can expect to pay the same or lower property taxes within each band, assuming no change in their annual values and before any rebate. Annual values, on which property taxes are based, reflect the estimated yearly rent if the property were rented out. Owner-occupied homes receive lower tax rates. These new annual value bands will take effect in January 2025. The table below outlines the current and upcoming annual value bands.

Property tax rateCurrent annual value bandFrom January 2025
0%S$0 to S$8,000S$0 to S$12,000
4%>S$8,000 to S$30,000>S$12,000 to S$40,000
6%>S$30,000 to S$40,000>S$40,000 to S$50,000
10%>S$40,000 to S$55,000>S$50,000 to S$75,000
14%>S$55,000 to S$70,000>S$75,000 to S$85,000
20%>S$70,000 to S$85,000>S$85,000 to S$100,000
26%>S$85,000 to S$100,000>S$100,000 to S$140,000

1-Year Voucher for HDB Rentals in the Open Market

Image courtesy of HDB’s posting on X

This initiative aims to assist families, particularly those with young children, in securing a rental HDB flat from the open market while they await the completion of their Built-To-Order (BTO) flats. Presently, the Housing Board provides subsidised rental housing through the Parenthood Provisional Housing Scheme. To enhance support for young families facing urgent housing needs, the Government will introduce a Parenthood Provisional Housing Scheme (Open Market) Voucher, which will be valid for one year.

In Summary

In conclusion, Budget 2024 introduces significant measures impacting Singapore’s real estate landscape. Deputy Prime Minister Lawrence Wong’s speech outlines extensions to the Additional Buyer’s Stamp Duty (ABSD) concessions, offering relief to both married couples and senior singles. Moreover, the reduction in ABSD rates for private residential developers aims to stimulate housing supply and foster flexibility in the market. Additionally, adjustments to annual value (AV) bands for property tax signal a recalibration to ensure fair taxation, benefiting homeowners across different property segments. Lastly, the introduction of a Parenthood Provisional Housing Scheme (Open Market) Voucher underscores the government’s commitment to supporting families, particularly those with young children, in their housing needs. These initiatives collectively reflect a proactive approach to maintain a resilient and robust real estate sector while addressing the evolving needs of Singaporean households.

We will continue to keep you informed about the effects of these announcements and any upcoming housing measures. Stay tuned to stay informed about the latest developments in the local real estate market.

If you are looking for guidance in your real estate journey, feel free to reach out to us. We will be glad to guide you through the process and offer a tailored consultation to help you reach an informed decision. 

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