ABSD deadline extended for large collective sale projects to facilitate redevelopment

Developers of large residential collective sale sites will get more time to sell units in the project, under changes to the additional buyer’s stamp duty (ABSD) regime that are meant to facilitate the redevelopment of such sites.

Announcing this on July 28, National Development Minister Chee Hong Tat said the Government recognises that developers seeking to undertake the redevelopment of large residential collective sale sites will require more time to construct their developments and sell the units.

Chee said that for larger sites purchased from July 29, the timeline to qualify for the 35 per cent ABSD remission will be extended.

Large sites – those that yield at least 700 residential units but fewer than 1,400 residential units upon redevelopment – will have their completion and sale timeline extended to six years from 5½ years currently. Meanwhile, mega sites – those that yield at least 1,400 residential units upon redevelopment – will have a completion and sale timeline of seven years, up from the current 5½ years.

Developers of mega sites will have to sell at least half of the residential units at the end of six years, or face a full clawback of the 35 per cent remittable portion of the ABSD. They will also face a full ABSD clawback if they do not sell all units after seven years.

“These changes are intended to set the right incentives for developers to rejuvenate larger estates, so that we can encourage more land intensification and achieve an outcome which is good for society as a whole,” Chee said in a speech at the Singapore Economic Review Conference.

He noted that Singapore could end up with a “lose-lose outcome” overall if developers are discouraged from redeveloping large residential collective sale sites.

Currently, housing developers purchasing residential land are subject to 40 per cent ABSD.

Of this, 5 per cent cannot be remitted. The remaining 35 per cent can be remitted, provided developers meet three conditions – commencing construction, completing construction, as well as selling all housing units by their respective timelines.

Steven Tan, executive director, capital markets & investment services, Colliers Singapore, said many developers were cautious about participating in large collective sale tenders because of the risk of incurring ABSD penalties if they were unable to complete and sell all units by the deadline.

The collective sale process can be lengthy and complex. The period between the tender award and completion of the acquisition can take many months, and potentially more than a year, if the sale is subject to Strata Titles Board proceedings, High Court applications or appeals by minority owners.
 
Extending the ABSD remission timelines for larger redevelopment projects should provide developers with greater flexibility and reduce execution risk, Tan added.

The Real Estate Developers’ Association of Singapore (REDAS) said the “recalibration reflects the realities of large-scale en bloc redevelopments, which require more detailed design and longer construction and sales cycles to be delivered safely, sustainably”.

“This is a timely, necessary and appropriate adjustment, giving development projects the time required for safety, quality, sustainability and innovative concepts to be properly applied,” a REDAS spokesperson said.

The latest changes come after the Government in March 2025 provided six- to 12-month extensions for developers to qualify for the remission. For instance, collective sale projects that can yield at least 700 units upon redevelopment, and where the redevelopment yield is at least 1½ times that of the original development, get a six-month extension, while such projects that have complex technical or infrastructural requirements have a further six-month extension.

On July 28, the Ministry of Finance and Ministry of National Development said developers of large and mega projects that meet additional criteria will get further six-month extensions, which means they have up to three years to begin construction after they buy the site.

Accordingly, the completion and sale timelines will be 6½ years for large sites and 7½ years for mega sites.

These additional criteria include either projects with complex technical or infrastructural requirements, projects approved under the Strategic Development Incentive scheme, or projects that aim to achieve higher productivity targets, such as through the adoption of nascent construction technologies.

Source: The Straits Times © SPH Media Limited. Permission required for reproduction.

Final phase of operationalisation of the Criminal Procedure (Miscellaneous Amendments) Act 2024 ABSD changes aside, mega collective sale sites must be priced realistically to attract developers: News analysis