More young homebuyers are entering the market in Singapore as families work around property cooling measures.
Rich parents buying properties for their children is becoming more common in Singapore as wealthy families try to avoid taxes on additional property purchases, Bloomberg reported.
Property agents quoted by the publication say they have observed an increase in apartments being bought by wealthy families for their children since the Singapore government raised taxes on purchases of second and subsequent properties in mid-2018, after private home prices had risen to their highest point in four years.
For children under 21 years old, parents have been setting up trusts accounts in their names to hold the property for them.
Property Cooling Measures
Measures to curb rising property prices introduced in July 2018 include higher loan-to-value (LTV) limits on residential property purchases, and raising the Additional Buyer's Stamp Duty (ABSD) by 5 percentage points for citizens and permanent residents buying second and subsequent homes, and by 10 percentage points for entities.
ABSD for Singapore citizens buying their second residential property, as well as their third and subsequent properties now stands at 12 percent and 15 percent respectively.
These measures kept property prices at bay for two quarters, but second-quarter data released by the Urban Redevelopment Authority on July 26 shows that property prices rose by 1.5 percent to reach their highest in five years.
