Citizens and permanent residents who cut their ties with the Republic cannot expect to continue owning landed property in the city.
That is the message the Singapore government is sending through the Residential Property (Amendment) Bill, tabled in Parliament on Monday.
Analysts said the Bill puts former citizens and PRs in the same boat as foreigners when it comes to landed houses.
Individuals who give up their citizenship or PR status in Singapore will now have to dispose of their landed properties within two years.
There will be a penalty of S$20,000 or a three-year jail term for failing to adhere to the rules.
Meanwhile, foreigners inheriting property will have to dispose of it in 5 years, versus the current 10-year time frame.
Analysts said the moves are part of government efforts to update current legislation deemed too lax in today’s vibrant property market.
Chua Yang Liang, head of Research & Consultancy at Jones Lang LaSalle said: “Perhaps it will be a bit harsh for PRs or citizens who inherited properties and have since moved overseas because of work or social reasons… It may be a bit harsh because they will lose a connection back to their homeland.
“But having said that, the issue is if they have given up their citizenship or PR status, then they should be treated just like a foreigner where you are no longer entitled to land-scarce properties in Singapore.”
Samir Arora, an Indian national and Singapore PR, who owns a Sentosa Cove residence, however, said such measures don’t bother him.
He said: “I’m not concerned about the new rules, as I have no plans to leave Singapore anyway.”
Analysts said the impact on the market is expected to be minimal, as PRs currently own only 3 per cent of landed homes.
Besides, landed housing only makes up about 5 per cent of Singapore’s total real estate market, according to observers.
But rules are also being tightened for foreign property developers, and they may feel the squeeze.
Developers who fail to complete and sell developments within the current stipulated period, will now have to pay for any extension of their time frames.
“The incentive is for them to try to sell everything within a two-year period rather than extend it. I think the measures being updated is to create more of a hurt aspect of the extension so they will be incentivised to want to use the two-year period to fully sell their units,” said Donald Han, MD of Cushman & Wakefield.
The Residential Property (Amendment) Bill will go for a second reading in Parliament in November and is expected to be passed as law by year-end.
Source : Channel NewsAsia – 20 Oct 2010