Property players call for lower ABSD on foreign buyers, review of EC income and loan caps

Scaling back the 60 per cent additional buyer’s stamp duty (ABSD) rate for foreigners purchasing prime properties was top of mind among agencies and developers, who urged a calibrated rollback of market-cooling measures aimed at taming demand and keeping a lid on prices.

Agencies also called for higher borrowing limits for buyers of increasingly pricey executive condominiums (ECs), among the several recommendations proposed by property players in their Budget 2026 wish list.  

The ABSD regime, first introduced in 2011 and levelled up several times, was hiked up sharply in 2023 to double the duty charged on foreign buyers from 30 per cent to 60 per cent, and that for Singaporeans buying a second property to 20 per cent. The intervention has hit sales in the prime Core Central Region (CCR) hard.

With overall home sales at a “healthy” level and moderate price growth over the past year pointing to both “resilience and discipline” in the Republic’s residential market, policymakers have room to fine-tune some measures, said Kelvin Fong, chief executive officer of PropNex.

Targeted tweaks could address challenges faced by homebuyers and owners without “undermining affordability or long-term sustainability”, Fong noted.

PropNex believes there is room to ease ABSD rates for foreign non-permanent resident (NPR) buyers back to 30 per cent, but only for the ultra-luxury CCR segments for homes priced at S$10 million or more.

The Business Times understands that developers have also given feedback to the government that lowering ABSD to 30 per cent for CCR sales may be supplemented with a longer seller’s stamp duty (SSD) period of 10 years or more for foreign buyers.

Such SSD could be raised to 30 per cent, from 16 per cent, if the unit is sold within the holding period. That would support genuine, long-term residents or professionals relocating within Singapore, while keeping speculative demand in check, players said.  

The over-S$10 million segment in particular is “a narrow segment of the market, and buyers of these homes are not competing with Singaporean households”, added PropNex.

In 2025, around 7.9 per cent of non-landed CCR homes priced above S$10 million were purchased by foreigners, versus the 4.4 per cent of buyers who were permanent residents and 0.5 per cent who were Singaporeans.

In 2025, foreign NPRs purchased 126 non-landed CCR homes – accounting for just 2.9 per cent of all non-landed home transactions, and a record low since 1995, PropNex noted. “This is despite the CCR having posted a strong rebound in sales in 2025 – which is testament to the effectiveness of the ABSD measure in curbing foreign investment demand.” 

Restoring the ABSD rate back to 30 per cent for this niche segment could bring liquidity back “without pushing up prices for everyday Singaporeans”, said PropNex. 

This could also “offer developers some visibility in demand for high-end homes”, boosting their confidence when bidding for CCR sites, it said. 

Feedback from industry players suggests that the higher ABSD has hurt confidence in the viability of high-value central developments, with foreign demand a key part of the proposition for mixed-use and luxury projects.

Other niche markets, such as Sentosa Cove, could also benefit from lower ABSD rates, said ERA CEO Marcus Chu.

“These homes operate in a very different demand segment and have little spillover effect on the broader housing market,” noted Chu. A targeted reduction, or even removal of ABSD, could “revive activity in a structurally subdued niche segment” without undermining broader affordability.

Huttons Asia CEO Mark Yip also suggested an exemption of ABSD for locals purchasing a second property.

This would allow Singaporeans, including seniors, to build up their passive income in a relatively stable and safe asset, rather than invest in more risky assets such as cryptocurrency, said Yip.

Easier financing for EC buyers

Industry players also proposed easing financing restrictions for buyers of ECs to address affordability concerns as prices have risen sharply.

This could be done by raising the mortgage servicing ratio (MSR) – the portion of a borrower’s gross monthly income that goes to repaying property loans – from 30 per cent to 40 per cent. 

PropNex noted that the MSR was first set at 40 per cent, then tightened to 30 per cent in 2013 for loans granted to public homebuyers and new EC buyers. 

But average EC prices have surged 88 per cent since 2013, from S$910,713 to about S$1.7 million in 2025. Land costs have likewise risen, from an average of S$460 per square foot (psf) per plot ratio (ppr) in 2013 to S$748 psf ppr in 2025, a dynamic that will feed through into higher new unit selling prices.

The agency also suggested a two-step increase in the monthly household income ceiling for new EC purchases – first from S$16,000 to S$18,000, and later up to S$20,000.

This could significantly cut the amount an EC buyer has to fork out, in a market niche meant to help middle-income families who exceed Housing & Development Board income ceilings but cannot afford private homes.

Going by the 2025 average price of a new EC at S$1.7 million and the MSR-limited loan of about S$1 million based on the current income cap of S$16,000, the buyer would have to cough up a hefty S$715,000. This includes a 20 per cent down payment of S$343,000 and a shortfall of S$372,000. 

Raising the income ceiling to S$18,000 would reduce the down payment and shortfall to S$595,000. This could be further reduced to S$465,000 if the income ceiling is raised to S$20,000.

Lifting of wait-out period

Huttons Asia’s Yip urged the government to remove the 15-month wait-out period for private property owners who are looking to downgrade their homes.

This was rolled out as a “temporary measure” in September 2022 to cool the red-hot housing market then. With resale flat prices moderating, this measure is now being reviewed, the government has indicated.

On the collective sale front, Realion (OrangeTee & ETC) Group called for “selective refinements” in the framework. A tiered consensus threshold for older developments could help nudge renewal and more efficient land use, especially for cases where maintenance costs are rising and ownership is fragmented.

A lowered threshold for older developments could also reduce the likelihood that a small minority of owners will hold up the collective sales process to secure higher proceeds, ERA’s Chu said.

Currently, the collective sale threshold is 80 per cent for developments 10 years and older, and 90 per cent for those under 10 years. A review of the en bloc sales regime under the Land Titles (Strata) Act is currently under way. 

Critical sales deadline for larger sites

Lastly, property players proposed further fine-tuning of the ABSD remission deadline for developers. 

Developers are currently required to pay 40 per cent of ABSD on their acquisitions of land for housing, of which up to 35 per cent may be remitted upfront if they manage to sell at least 90 per cent of units in the project within five years, subject to certain conditions. 

But the five-year deadline does not account for long approval and pre-sale processes, leaving developers under pressure to plan, build and sell units quickly, said industry insiders. 

Extensions have been granted for complex, large-scale projects or those adopting new construction technologies. PropNex believes that an additional two years could be considered for large-scale redevelopment projects on land plots of 80,000 square metres or more, to help de-risk projects and encourage large-scale redevelopments that may have a “transformative effect” on the neighbourhood, it said.

Others called for the five-year deadline to start from developers’ final sale approval, rather than the time of land acquisition. 

They also suggested the full ABSD remission be given if developers sell at least 90 per cent of units, with a framework scaled to project size or complexity.

BT understands that developers have also proposed further tweaks to the land betterment charge (LBC) framework.

Currently, developers pay LBC – which can substantially increase the effective land cost for a project – for the right to enhance the use of some sites, or to build bigger projects on them. Projects such as conservation sites, long-stay serviced apartments, hotels and retirement housing are often assessed under the broad categories.

Some developers believe that a more differentiated approach should be used. This would strengthen land valuation accuracy, improve project feasibility and encourage “responsible investment” across asset classes, they said.

In the industrial market, Realion Group proposed more incentives and grants to encourage owners to upgrade facilities into higher-specification spaces that will better meet “modern business needs”.

The government could also provide greater zoning flexibility or vertical zoning for ageing industrial estates, it said.

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