Property gains tax proposed because of earlier feedback

Source : Channel NewsAsia – 23 Aug 2009

The Finance Ministry said the property gains tax was proposed because of earlier feedback.

Speaking at a community event on Sunday, Second Finance Minister Lim Hwee Hua said certain property investors had wanted more certainty regarding the current rules.

Proposed changes to tax individuals who sell property before a four-year period were designed to shed some light on what defined a trader who sells property as a main source of income.

Public consultations were held, where more than 90 per cent of respondents said the system should be kept simple.

Property observers agreed with them, saying the current rules would avoid confusing sellers – which is critical in a recovering property market.

Analysts also said foreign investors are looking into Singapore as a potential market, so any adjustments to the tax regime may send them the wrong signal.

Mrs Lim said: “We wanted to give some certainty to a group of property owners. But it looks like there was some confusion and people were a little concerned about what the signals were. So based on the feedback, we decided that since that is not going to be well-understood, it is probably advisable to withdraw that proposal.”

For now, property sellers will continue to be judged on a case-by-case basis to determine if they should be taxed.