Discounts galore from developers post-ABSD...

By The Folks @PropTalk - December 10, 2011 No Comments

Developers are already offering packages on homes to offset the stiff new stamp duty measures that came into effect only two days ago.

Far East Organization is offering a 5% relief package to affected buyers at all of its already-launched projects.

It will reimburse buyers 3% of the unit price to offset the new stamp duty. Buyers will also get a furniture voucher worth 2% of the flat price.

They will get the voucher only after putting down a 30% deposit if the project has not been completed.

The package applies across the board to Singaporeans, permanent residents (PRs) and foreigners, so foreigners will still be worse off after the new measures.

Far East's already-launched projects have another discount that differs between properties.

Prices of units at its Seastrand project in Pasir Ris Drive 3 are discounted by up to14%, making the cheapest unit an estimated $937psf. But with only three- and four-bedroom units left and the smallest three-bedder at 1,109sqft, the minimum purchase now would cost about $1.04 million before stamp duty.

With an additional 10% buyer's stamp duty for foreigners of $104,000 now, Far East's relief package would help a buyer save almost $52,000 - about $30,000 initially and the rest subsequently.

However, a Far East agent said that unofficially the discount rate could go up to 16% of the original unit price. This means buyers can negotiate a 21% discount off the original total price by combining the uniform 5% cut with the discount that applies to the Seastrand.

This would more than offset the extra stamp duty incurred, although it is believed that the discount applies on a case-by-case basis.

Far East has not announced a dateline for its relief package but the agent said it could last until the end of this month.

The Seastrand's temporary occupation permit (TOP) is expected on Dec 31, 2016.

Wing Tai's luxury Helios Residences at Cairnhill Circle is also offering a relief package, said a company sales agent.

Buyers will get a cash rebate of up to 2% of the total price upon payment. That goes up to 2.5% at the start of the second year of occupation and 3% at the start of the third year.

They will not be allowed to sell their unit for three years following purchase.

The smaller units can cost around $4.2 million, said the agent, adding that the relief package is meant to help "lessen the burden" on customers.

The agent said the deal is only applicable to Helios Residences, as its target market is foreigners, who are more likely to be affected by the stamp duty imposition, but did not specify a deadline. Helios Residences obtained its TOP on Jan 28.

Sales agents at Keppel Land, UOL and CapitaLand did not know of any discount packages being offered.

Real estate agents at DWG, DTZ and Huttons also said their firms were not offering discount packages, but some said they might be able to negotiate an additional 1% cash rebate.
Source: The Straits Times

Given the partial/full absorption of ABSD by developers through the additional discounts that they are giving on their projects, the latest property measure is looking increasingly like a transfer of wealth from developers to our Government...

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