The Venue Residences must be fully sold by September 2017 in order for CDL to avoid the ABSD charge.
Despite the multi-million dollar fines involved if they fail to sell all their residential units within five years, property developers in Singapore are unlikely to cut home prices to attract buyers, reported The Straits Times.
“I don’t think they will be slashing prices drastically, as many of them still have some holding power,” said Alan Cheong, Head of Research at Savills Singapore. OrangeTee’s Head of Research and Consultancy also concurs, saying “developers have been largely keeping prices steady in 2016 as the demand for new homes has picked up”.
Under the Additional Buyer’s Stamp Duty (ABSD) rules introduced in December 2011, developers must construct and dispose of all units in residential projects within five years of acquiring their sites. Otherwise, they need to fork out a 10 percent levy based on the land price, plus a five percent interest. Subsequently, the levy was increased to 15 percent for sites purchased from January 12, 2013 onwards.
Among the projects with imminent deadlines is CDL’s Bartley Ridge, but its developer is optimistic that it can offload the remaining two units there before the January deadline, as well as the remaining 97 units in another project, The Venue Residences, before September next year. If it fails to sell the unsold units, CDL would need to pay ABSD plus interest of around S$79 million.
“To further speed up sales, we have initiated various marketing and promotional activities, such as the CDL Dream Draw, which is applicable to The Venue Residences and three other projects,” said a spokesperson.
Meanwhile, The Trilinq by IOI Properties still had 303 remaining units as of October 31. If these units are not disposed of by January, the developer is liable to pay S$50.9 million.
SingLand has three developments with unsold inventory: Mon Jervois, Pollen & Bleu, and Alex Residences. If it fails to find buyers for these projects by February, June and December respectively, it must fork out a total of about S$70 million.
“For Mon Jervois, if we have to pay ABSD, I think our margins will be able to absorb that and still provide a decent profit,” noted Michael Ng, Group General Manager of UIC, the parent firm of SingLand. “It may be better to hold on to the units and try to sell at a higher price later on, as the market for this segment is improving,” he added.
Cheryl Marie Tay, Senior Journalist at PropertyGuru, edited this story. To contact her about this or other stories, email cheryl@propertyguru.com.sg
