Categorized | International

Singapore Aims to Reduce Foreign Investment with New Tax

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In an effort to limit foreign investment in its residential real estate market, Singapore has unveiled new taxes that will affect foreigners looking to buy homes in the country.

Foreign investors, however, are not the only group being targeted by new taxes. Corporate entities will also be subjected to the same tax. An additional tax will also be placed on permanent residents and citizens that look to buy a second and third home respectively.

Both foreign investors and corporations will be forced to pay an extra ten percent for what Singapore’s government is calling stamp duty. Those permanent residents and citizens that are looking to buy additional homes will subject to a three percent stamp duty.

Singapore’s government has decided to take such actions so as to control rapidly increasing prices in its residential real estate market. In addition, the country aims to reduce the number of foreign buyers that are investing in Singaporean real estate. Currently, foreign investors make up nineteen percent of homeowners in the country.

Analysts warn that the most recent measures could cause severe damage to the housing market in Singapore. With the new stamp duties, prices can be expected to drop into a free fall for the foreseeable future.

The actions taken by Singapore’s government strongly resemble those of China, who has imposed stringent restrictions to control rapidly rising prices. The decision to heavily curb foreign investment in the real estate market is in stark contrast to the policies of many other countries around the world that have relied on foreign investment to keep their property markets afloat.

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About Nancy Raven

Nancy is the main writer for the International section of the website. Sometimes she also helps Drew out on the Finance/Mortgage section as well.

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