With the approach of the 5-year deadline for the remission of Additional Buyer’s Stamp Duty – ABSD, some developers need to improve their sales effort while the others need to maintain their sales momentum to avoid paying the stamp duty.
The remission rules of ABSD are that the developers only need to pay the stamp duty if they have not sold all the units in 5 years from the purchase date. The rate is 10% for land bought between 8 Dec 2011 and 11 Jan 2013. Land purchased after 12 Jan 2013 attracts a rate of 15%. Each year attracts a 5% interest rate.
Based on URA May 2016 data and June sales caveats, there are five projects close to the ABSD deadline whose developers need to improve or maintain their sales momentum to avoid paying the stamp duty. These are Kingsford Hillview Peak, Vue 8 Residence, The Glades, The Venue Residences and Alex Residences.
Kingsford Hillview Peak has 106 out of its 512 units or 26% remaining. To avoid ABSD, the developer must sell these by March 2017. The developer recorded an average monthly sale of 28 units in first half of 2016, a good pace that can help beat the March deadline. Nineteen units were sold in June at an average price of $1,319 psf.
At Vue 8 Residence, 122 units or 26% of its 463 units are unsold. The developer has been selling an average of 9 units per month in the last 12 months. Only 8 units were sold in June at an average price of $959 psf. The remaining units must be sold by June 2017 to avoid ABSD, which means that the developer needs to improve monthly sales to more than 10 units.
The Glades has 236 units of its 726 units or 33% remaining. These must be sold by October 2017 to avoid ABSD. The monthly sales for the past 12 months are 15 units. 27 units were sold in June at an average price of $1,403 psf, a good sales momentum for beating the deadline.
The Venue Residences has 136 units or 51% of its 266 units unsold. To avoid the ABSD deadline, the units must be sold by September 2017, which means the developer needs to improve monthly sales to above 9 units. Seven units were sold in June at an average price of $1,405 psf.
With 167 units or 39% of its 429 that must be sold by December 2017 to beat ABSD deadline, Alex Residences developer needs to improve its monthly sales to at least 9 units per month. There was only 1 unit sold in June at $1,993,369 net price.
Prospective buyers are expecting bargain deals especially from projects with many unsold units and are nearing ABSD deadline. Some developers have started offering incentives such as ABSD rebates, discounts and freebies. There are also creative marketing initiatives such as observed at The Crest, which has interior design for its 1 bedroom units, laser show and events.
Some developments such as Lakeville and Sky Vue have good sales momentum and less than 60 units unsold and can beat their ABSD deadline. Others with less than 10 units unsold include Jewel @ Buangkok, Echelon, La Fiesta, Urban Vista and Bartley Ridge.