Saturday, December 10, 2011

SG Property Development Rules

New (and existing) rules applying to property developers (BT Fri 9th Dec, front page, Kalpana Rashiwala).

Old rules:
  • Any developer buying a Government Land Sale (GLS) residential site had to complete development in 5 years (no time limit on sales).
  • When buying a private sector residential site, foreign developers have to obtain a Qualifying Certificate, which requires 5 year limit for the TOP (development) and another 2 year limit on sales. Any developer with even a single foreign shareholder is considered 'foreign', hence CDL, Capitaland & Wheelock face these limits. Only local, privately owned developers (Far East, Hoi Hup) were except.

New rules:

  • For any site bought after Dec 8th, must develop and sell all units within 5 years. Otherwise they must pay a 10% additional buyer's stamp duty (ABSD) at the end of the 5 year period (with interest).

My thoughts:

  • Levels the playing field between private and publicly owned property developers.
  • Forcing developers to sell during a downturn may exacerbate it. Every last unit must be sold within the timeframe. Would these measures be removed? Retroactively?
  • I used to like Wheelock due to their astute market timing. As they have no undeveloped property in its landbank: they are now restricted to developing and selling any new land withing 5 years (previously it was 7).
  • SC Global may benefit, as they have a large bank of prime freehold land bought before the restrictions came into force.


Unknown said...

Thanks for sharing the rules regarding the development of the property its good for knowledge.
Brian Linnekens

sapna said...
This comment has been removed by the author.

One really great post on SG.