Effective yesterday, buyers who are not Singapore citizens or permanent residents will have to pay an additional 10% stamp duty when they buy a home, effectively raising the purchase price by 10%.
Previous policy measures had targeted speculators by imposing an extra duty on those who bought and sold properties within four years and limiting the amount of loans available to prospective buyers.
“It probably signals a change in policy. The government had previously been very consistent in welcoming foreign investments, so that is why the new policy came as a shock,” said Colin Tan, head of research and consultancy at Chesterton Suntec International.
Singapore residential prices have held up well despite a slowing economy, helped by low interest rates and rising demand from overseas investors, in particular those from China.
The surprise an-nouncement on Wednesday night hit shares of property developers yesterday.
CapitaLand Ltd, South-East Asia's largest developer, fell as much as 8% to S$2.40, while No. 2 ranked City Developments Ltd dropped 7.3% to S$9.29.
Shares of Ho Bee Investment Ltd, which focuses on high-end condominiums, fell by as much as 12.1% to S$1.09.
By Reuters
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