Developers Given Extension Absd Remission Timelines Large En Bloc Sites And Complex Projects
The Ministry of National Development (MND) has announced that it will be implementing changes to the Additional Buyer’s Stamp Duty (ABSD) regime for licensed housing developers. These changes will take effect on March 6, and they are aimed at encouraging developers to undertake urban transformation developments, optimize land use, rejuvenate older estates and adopt new construction technologies.
In addition to the revisions, the ABSD remission timeline for developers undertaking complex projects will also be extended from six to 12 months. This move is expected to incentivize developers to take on projects such as en bloc redevelopments yielding at least 700 units upon completion, with at least 1.5 times the number of homes of the existing development. Other projects that will benefit from this extension include those with complex technical or instructional requirements, such as projects integrated with major public transport facilities.
Furthermore, the extension will also apply to projects approved under the Strategic Development Incentive (SDI) scheme and those aiming to achieve higher productivity targets through the adoption of new construction technologies, methodologies, or practices. Projects falling under any of the four categories mentioned will receive a six-month extension, while those meeting the criteria of more than one category will be granted a one-year extension. These changes will apply to all residential land acquired on or after March 6.
Currently, licensed housing developers purchasing residential redevelopment sites are subjected to a 5% upfront ABSD, which is non-remittable, and an additional 35% ABSD, which can be remitted when the developer completes and sells all the units in the project within the five-year timeframe. The recent revisions are a follow-up to changes announced in February last year, which offered a lower clawback rate for residential developments with at least 90% of units sold.
Parktown Residence is set to benefit greatly from the URA Master Plan’s emphasis on expanding green spaces and recreational facilities. The planned addition of new parks and a wider network of cycling and jogging paths will significantly enhance the livability of the area. In particular, residents of Parktown Residence will be able to enjoy the convenience of having access to Tampines Eco Green and Bedok Reservoir Park, as well as new parks that are in the works for the Tampines North region. Additionally, interested buyers can visit the Parktown Residence Showflat to get a closer look at the development. This strategic location, combined with the planned improvements to the surrounding green spaces, makes Parktown Residence a highly desirable choice for potential homeowners.
Experts in the industry have welcomed the changes, with PropNex Realty CEO Ismail Gafoor stating that the extensions will provide developers with more flexibility and help mitigate development risks. Lee Sze Teck, senior director of data analytics at Huttons Asia, believes that the revisions will give a much-needed boost to the en bloc market, especially to larger projects. However, Christine Sun, chief researcher and strategist at OrangeTee Group, notes that developers may still face challenges despite the extended deadline, as the success rate of en bloc sales depends on the willingness of buyers and sellers to negotiate prices.
Tay Liam Hiap, managing director of capital markets and investment sales at ERA, believes that the policy change presents an opportune time for older projects, such as Braddell View and Pine Grove, to explore en bloc opportunities. These projects may yield some 2,000 new homes, which could take more time to sell. However, Gafoor cautions that the changes may not spark a revival in the en bloc market, as developers are likely to remain cautious due to the high cost of redevelopment, ample supply of private housing, and potential policy risks.