New curbs on foreign ownership

Foreign ownership of landed homes here is set to be tightened, four years after the Residential Property Act was last revised.

The latest changes to the law, tabled yesterday in Parliament, include more stringent penalties and come at a time when residential property prices have risen significantly while some fines and jail terms have been the same since 1974.

The newest requirement is for Singaporeans who give up their citizenship and foreigners who give up their permanent residency to dispose of their landed property within two years. Failure to do so will result in a fine of up to $20,000 and/or a three-year jail term.

In addition, foreigners who inherit landed property have to sell it within five years instead of the current 10 years.

These moves are to reinforce the benefits of citizenship and PR status, said property analysts such as Suntec Chesterton International research and consultancy director Colin Tan.

When the Act was introduced in 1973 – the penalties were revised a year later – foreigners had to be permanent residents and get approval from the government to buy landed property, including strata-landed housing and vacant residential land.

They can buy only one landed home for owner-occupation, not for rental, and must dispose of their existing restricted property before acquiring a new one.

They are not allowed to sell the property within three years from the date of purchase or from the date of the Temporary Occupation Permit.

The amendments in 2006 increased the penalty for converted foreign companies which own restricted properties without approval and citizens who hold such homes as nominees for foreigners.

If the new Bill is passed, those found breaching these rules will be fined up to $200,000, up from $5,000 previously, and a further fine of $2,000 each day they remain non-compliant.

Other penalties include a fine of up to $10,000 or three times the rental income, whichever is higher, for unauthorised rental. The Controller of Residential Property also gets powers to lodge a caveat to prevent unauthorised sales.

SLP International’s executive director of research and consultancy Nicholas Mak said the move would close a “loophole” for foreigners who buy landed property after becoming citizens or PRs and then give up their residency status after a few years.

MediaCorp understands there have been three to four offences of unauthorised property sale in the last two years. Of the 70,000 landed homes, PRs own 3 to 4 per cent.

Another change will affect foreign developers – defined as any company with foreign directors or any amount of foreign ownership, including listed companies since foreigners can buy the shares – which will include firms such as Keppel Land and CapitaLand.

The Government will charge a fee if foreign developers extend the five-year window to complete residential developments after acquiring the land, or take more than two years to sell all units from the date of TOP.

MediaCorp understands the Government can make exceptions on a case-by-case basis, such as during a recession.

Other Bills introduced in Parliament yesterday include the Maintenance of Parents (Amendment) Bill, which proposes mandatory conciliation sessions and tribunal access to necessary government records and documents, the Industrial Relations (Amendment) Bill, which proposes a new mediation scheme for some disputes involving employees who are managers and executives, and the Civil Defence (Amendment) Bill, which will provide for officers to serve outside of Singapore.

Source : Today – 19 Oct 2010

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