Every transaction should be taxed

THE tweak to property tax announced last week – from Jan 1 next year, individuals who have sold a property in the prior four years will be subject to income tax on any subsequent home sales – is more than equitable.

In fact, taxes should be imposed on every property transacted irrespective of the number of times a sale is carried out.

I was recently invited to a property launch only to be informed that all units had already been sold.

True to form, the in-demand units were advertised openly the following day for $100,000 more than the price at which the developer had sold them – when the project had not even been built.

What is capital gains tax compared to this sort of profit? It’s a pittance!

Many other countries have a capital gains tax policy. Singapore should also have such a policy or property prices will continue to skyrocket when the economy rebounds.

The four-year period where taxes are to be paid if more than one property is transacted should be reviewed periodically to ensure that house prices stay under control.

A check on the Internet shows that a 1,000 sq ft condominium unit in Australia or Canada goes for between $200,000 and $300,000, while in Singapore we might pay close to $1 million for an average home.

Could such prohibitive property prices be part of the reason why our brightest talents choose to move abroad or why expatriates fail to sink roots here?

It is time the authorities rethink Singapore’s housing policy so that a roof over our heads becomes more competitive and affordable.

Gilbert Tan Hee Khian

Source : Today – 20 Jul 2009

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