It is reported that residential properties in Singapore can be divided into two categories, namely private homes and HDB flats, and in order to play a role in regulating income distribution, Singapore has previously adopted different tax rates for these two categories of housing.

A higher super-progressive tax rate is applied to private homes, i.e. luxury homes and mansions, while a concessionary tax rate is implemented for basic housing needs.

At the same time, the Government will adjust the stamp duty on house purchases so that higher value residential and non-residential properties will have to pay a higher stamp duty on house purchases.

Deputy Prime Minister and Finance Minister Wong Choon Chua said in his Budget statement to Parliament for the new financial year that a stamp duty of 5 per cent will be levied on the portion of property value between $1.5 million and $3 million in the residential sector, while the stamp duty on the portion of property value over $3 million will be increased from the current 4 per cent to 6 per cent.

This adjustment will affect 15% of the residential property.

For non-residential properties, a 4% stamp duty will be levied on the portion of the property value between $1 million and $1.5 million, and the stamp duty on the portion exceeding $1.5 million will be increased from the current 3% to 5%. This adjustment will affect 60 per cent of non-residential properties.

Wong said the new measure, which will apply to all properties purchased tomorrow, is expected to generate an additional $500 million a year for the country. However, the exact amount will depend on the state of the property market.