Singapore has announced a fresh round of cooling measures aimed at tackling surging property prices amid concerns that they could outpace economic fundamentals. The government said both local and foreign buyers of residential properties will now have to pay higher additional buyers’ stamp duties.

The changes, which take effect from today, will be the third round of cooling measures implemented by Singapore following previous similar moves.

The Ministry of Finance, National Development Ministry and Monetary Authority of Singapore issued a joint statement highlighting that earlier measures taken in December 2021 and September last year had a “moderating effect.”

However, “property prices showed renewed signs of acceleration amid resilient demand” in the first quarter of 2023.

“Demand from locals purchasing homes for owner-occupation has been especially strong, and there has also been renewed interest from local and foreign investors in our residential property market,” they said.

The biggest jump in the latest round of cooling measures is the doubling of stamp duties for foreign buyers from 30% to 60%, which the government hopes will help to “moderate investment demand.”

However, analysts at Citigroup criticized the doubling of taxes on foreigners as “draconian,” given that foreign purchases have only accounted for between 5% to 7% of total transactions in the past four quarters.

Real estate stocks were hit the hardest by the news, with City Development falling 5.74%, UOL Group dropping 4.9% and Keppel Corp down 4.4%.

The government has said that the latest revisions will also help efforts “to ramp up supply, to alleviate the tight housing market for both owner-occupation and rental.”

Singapore citizens and permanent residents will also face increases in stamp duties, but the rate revisions are much smaller. The so-called additional buyer’s stamp duty, or ABSD, will be raised from 17% to 20% for Singapore citizens buying their second residential property, and from 25% to 30% for those buying their third and subsequent property.

For Singapore permanent residents buying their second residential property, the stamp duties will rise from 25% to 30%, and the rates will increase from 30% to 35% for those purchasing their third and subsequent residential property.

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