Propnex’s Comments On Property-related Announcements In The Singapore Budget 2024
FOR IMMEDIATE RELEASE
16 February 2024, Singapore – Deputy Prime Minister and Finance Minister Lawrence Wong delivered the Singapore Budget 2024 in Parliament today, with the Budget titled Building Our Shared Future Together. In his Budget statement, DPM Wong made several announcements relating to the real estate segment, as summarised below:
a) One-year Parenthood Provisional Housing Scheme (PPHS) voucher for eligible families to rent an HDB flat in the open market while they wait for their new BTO flats to be ready.
b) Single Singaporean seniors aged 55 and above will be able to claim a refund of the additional buyer’s stamp duty (ABSD) when they right-size their housing to a lower-value private property to replace their existing home, provided they sell their first property within 6 months from purchasing the replacement private property.
c) More flexibility for developers under the ABSD regime. The ABSD clawback rate will be lowered for residential projects that have sold at least 90% of the units within the stipulated 5-year timeline. Presently, acquisition of sites by housing developers are subject to 40% ABSD rate of which, 35% ABSD may be remitted upfront subject to conditions, while the other 5% ABSD is non-remittable and is payable upfront. The 35% remittable portion will be clawed back with interest if the developers do not sell all units in the development within the 5-year timeframe.
d) Revisions to annual value bands for owner-occupier residential property tax rates from 1 January 2025. The lowest AV band threshold will be increased to $12,000 from $8,000, while the highest threshold will be raised from over $100,000 to over $140,000. Corresponding adjustments will be made to bands in between.
Mr Ismail Gafoor, CEO of PropNex Realty:
“We think these property-related announcements are very targeted and timely, given the prevailing property market conditions and challenges.
The one-year PPHS voucher, for instance will help eligible young families with pressing housing need to rent a flat in the open market, while they are waiting for their build-to-order (BTO) flat to be completed. Although the dollar value of the voucher was not disclosed, we believe it should go some way to help families rent an HDB flat as interim housing and defray the rental expenses.
It will be particularly helpful since HDB flat rentals have risen over the last couple of years. According to rental transactions, the average monthly rents for HDB flats have risen substantially from 2021 to 2023 (see Table 1) across all flat types. Therefore, the PPHS voucher will come in handy to offset the rental expenses. That being said, we hope the government will consider extending the PPHS voucher beyond one year, providing eligible families with continued support until their BTO flat is ready; this will also help to minimise any disruption to their housing in the interim should their new flats take more than a year to complete.
Table 1: Average monthly rentals of HDB flats by flat type by year
| HDB Average Monthly Rental | 1-ROOM | 2-ROOM | 3-ROOM | 4-ROOM | 5-ROOM | EXECUTIVE |
| 2021 | $1,200 | $1,470 | $1,882 | $2,197 | $2,300 | $2,366 |
| 2022 | $1,436 | $1,756 | $2,228 | $2,634 | $2,759 | $2,850 |
| YOY % Change | 19.7% | 19.4% | 18.4% | 19.9% | 20.0% | 20.5% |
| 2023 | $1,786 | $2,147 | $2,647 | $3,166 | $3,369 | $3,472 |
| YOY % Change | 24.3% | 22.3% | 18.8% | 20.2% | 22.1% | 21.8% |
(Source: PropNex Research, data.gov.sg)
