By Shawna Kwan
(Bloomberg) — Singapore has the highest property tax rate for foreign buyers among major global markets after the city-state doubled the levy on Thursday.
According to Savills Plc., taxes in the city far exceed those of other international centres such as Hong Kong, London and New York, as foreigners currently have to pay an additional 60% stamp duty on a home in Singapore.
“We are pretty sure this will not only deter investment in Singapore, but will actually slow it down,” said Mark Elliott, head of international residential sales at Savills in Hong Kong. “This will be great for London, the US and other markets.”
When purchasing a property worth $5 million, a foreign buyer in Singapore will have to pay 65 percent in taxes, including other levies, compared to around four percent in New York and 15 percent in London, according to data from Savills. That equates to around $3.25 million.
The city-state also charges roughly double the tax rate of Hong Kong and Vancouver, countries that have increased levies on overseas buyers after earlier inflows of money, particularly from mainland China, helped boost property prices.
Hong Kong is likely to benefit from Singapore’s policy change because it will allow more mainland Chinese to buy luxury properties there, according to Bloomberg Intelligence. Although Hong Kong charges 30 percent stamp duty on foreigners buying homes, those who later move there permanently can claim most of it back as part of the city’s efforts to attract talent.
©2023 Bloomberg L.P.
