Annex A
Axing of estate duty good for high-end property segment

In the past, the rich minimised estate duty by holding more assets in residential property - rather than stocks, cash and insurance. With the hefty exemption of $9 million for houses, the death tax tended to encourage people to channel money into property.

The super-rich would also set up a trust, a legal arrangement enabling them to give away their assets, such as shares and property, to named beneficiaries. A trustee, typically an institution, administers the trust.

On a broader level, one of the more significant impacts of scrapping the death tax is that it may attract new wealth to relocate to Singapore. Wealthy families may be encouraged to live in Singapore permanently, keep their assets here and own real estate here.

There appears to be more pros than cons for real estate agents, though the incentive to own more residential homes, except for the one that they are using at the moment, is no longer present with the abolition of the death tax.

This is because more wealthy individuals will be encouraged to move their wealth here and take up permanent residence here. And that means they would need a beautiful roof over their heads.
The high-end property segment should be getting a shot in the arm when it needs it most. However, the inflow of funds will not happen suddenly but gradually, perhaps over two to three years.

Likewise, rich Singapore family enterprises used to invest their money overseas to avoid paying taxes such as the estate duty may now consider relocating their funds back home.

In fact, international wealth management experts, like UBS, have started receiving calls from foreign investors on possible fund relocation to Singapore. There is one less reason for anyone to have concern about coming to Singapore.

Annex B
Stamp duty

Stamp duty is a tax that is payable on legal documents recording a sale or mortgage of immovable property and shares, and a lease of immovable property.

Stamp duty collected on property comprises about 98% of total Stamp Duty collections. Of the Stamp Duty on property, about 76% is accounted for by private property sales and disposals.

Stamp Duty collection are expected to reach $3.8 billion in Financial Year 2007, the highest ever recorded. This is due mainly to the buoyant private residential property market, which saw a record number of property transactions and a new high in prices in 2007. The total value of private residential properties transacted increased by 55% and the total value of private commercial properties transacted increased by 37% from 2006.

Stamp duty collections are much more volatile than other revenue sources and Stamp duty collections are highly subject to the fluctuations in prices and volume of property transactions. These are in turn strongly influenced by market sentiments, which make stamp duty collections volatile from year to year and difficult to project.

Stamp duty collections can be significant. However, given the volatile nature of stamp duty collections, the Government does not rely on it as a key source of funding for regular Government expenditures.

Annex C
Performance of secondary market so far in 2008

Table [9] – Secondary Sale Market Performance – by SELECTED PROJECTS

Table [10] – Secondary Sale Market Performance – by SELECTED PROJECTS

Table [11] – Comparison of sale performances of SELECTED D9 PROJECTS

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