Debated in Parliament on 3 Jul 2023.
Mr Chua Kheng Wee Louis asked the Deputy Prime Minister and Minister for Finance (a) what is the rationale for having only nationals or permanent residents of selected countries under the Singapore-European Free Trade Association Free Trade Agreement be exempted from Additional Buyer's Stamp Duty (ABSD) imposed on these foreign buyers of residential properties; and (b) what is the number of transactions and value of ABSD that is exempted in each year over the last five years for foreigners eligible for ABSD remission under all Free Trade Agreements.
Under the "national treatment" obligation of the EFTA – Singapore Free Trade Agreement (ESFTA), nationals and permanent residents of Iceland, Liechtenstein, Norway and Switzerland are accorded similar tax treatment as Singaporeans in the purchase of residential properties in Singapore.
The other Free Trade Association (FTA)s which requires Singapore to grant "national treatment" to foreign nationals in respect of stamp duty is the US-Singapore FTA.
The two FTAs were signed almost 20 years ago, before we introduced the Additional Buyer's Stamp Duty (ABSD). The "national treatment" obligations are part of the balanced package we sought to achieve in the FTAs, to ensure they provide meaningful benefits for Singapore when our companies and people trade with and invest in these countries. For example, the "national treatment" benefits apply to Singaporeans when they invest in the US and the ESFTA countries.
The number of property transactions and value of ABSD remitted due to the two FTAs vary from year to year due to market conditions and prevailing ABSD rates. Over the five-year period from 2018 to 2022, an average of around 250 transactions per year were granted ABSD remission due to the two FTAs. These transactions accounted for about 2.5% of all property transactions that attracted ABSD during this period. The amount of ABSD remitted was about $150 million per year.
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