Comparison: Sellers Stamp Duty (SSD) vis-a-vis Land Titles (Strata) Act (LTSA) Evaluation basis: Law applicable

at point of disposal Issue at hand: Laws with retrospective effect Conclusion: LTSA is of retrospective effect
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In respect of Seller's Stamp Duty (SSD) If property purchase was after 20 Feb 2010 but before 30 Aug 2010, SSD would apply only if owner sold within 1 year of purchase even though the sale was AFTER 30 Aug 2010, (say, 21 Feb 2011). Only property purchases after 30 Aug 2010 would be hit with SSD if sold within 3 years.

1.

Ostensibly, both SSDs were calibrated this way to uphold the principle of non-retrospective laws in Singapore. Hence, even though the sale was made at the time when the 1-year SSD law was in force, the law honoured the fact that the purchase was made at the time when there was no SSD. Likewise, even if the sale was made at the time when the 3-year SSD law was in place, the law honoured the fact that the purchase was made at the time when there was 1-year SSD.

Examples: 1 Jan 2010: I buy Condo A. 20 Feb 2010: MND announced SSD would apply if you sell property in less than 1 year. 1 Mar 2010: I sell Condo A after two months No SSD. Why? SSD did not exist at point of purchase even though SSD of 1-year holding period was already in place at point of sale. 1 Apr 2010: I buy Condo B. 30 Aug 2010: MND announced new SSD would apply if you sell property in less than 3 years. Option A: 30 Mar 2011: I sell Condo B within one year I pay SSD. Why? Ownership is less than one year. SSD of 1-year holding period applied at point of purchase. Option B: 2 Apr 2011: I sell Condo B after one year No SSD. Why? Ownership is more than one year because it is past the SSD of 1 -year holding period applicable at point of purchase. This is despite the fact that SSD of 3-year holding period was in place at point of sale.

Summary points: The law applicable at point of sale is the law applicable at point of purchase. For Condo A No SSD even though flip was made in 2 months because SSD did not exist at the time. For Condo B SSD only if ownership is less than 1 year. Therefore, SSD laws (be it 1-year holding period or 3year holding period) were NOT made retrospective.

In respect of collective sale with majority consent under Land Titles (Strata) Act Prior to Oct1999, private non-landed property could be sold on collective sale (en bloc) basis based on 100% consent. After Oct 1999, en bloc sales require only 80% consent if estate age is 10 years or more (90% if estate age is less than 10 years).

2.

If the same standard of SSD as a NON-retrospective law were to apply, then if the property purchase was before Oct 1999, the owner of that unit must consent to en bloc sale even if LTSA 80% majority was hit because that owner bought the unit at the time when en bloc consent was pegged at 100%. However, if the property purchase was after Oct 1999, then the consent of that unit's owner would not be needed if LTSA 80% (90% if estate age is < 10 years) majority was hit. In this way, as units in that condo estate get progressively sold under resale or sub-sale transactions after Oct 1999, that estate would eventually fall under LTSA 1999 framework. But this is NOT the case. LTSA applied even to properties purchased before Oct 1999 so long as the en bloc sale was after Oct 1999.

Example: Sep 1980: I buy condo (at the time, the law requires 100% consent for en bloc sale) Oct 1999: MinLaw announced 80% (90%) consent for en bloc sale and incepted LTSA. Nov 1999: My condo goes en bloc and 80% consent applied

Summary point: The law applicable at point of en bloc sale is NOT the law applicable for en bloc sale at point of purchase. Instead, the law applicable at point of sale is the law applicable for en bloc sale at the time viz, 80% consent was applied. Therefore, this proves that LTSA was made retrospective. If the analogy of SSD was applied to LTSA, then this unit would be subject to owner consent regardless of whether 80% (90%) has/has NOT been hit for the rest of the estate. BUT if this unit had been sold in a resale or sub-sale transaction AFTER Oct 1999, then the NEW owner's consent (or dissent) will form part of the requisite 80% or 90% (or remaining 20% of 10%), respectively. I'm cognizant that strict adherence to NON-RETROSPECTION for LTSA would have meant that some estates could potentially always be subject to consent of owners who bought PRIOR to Oct 1999 - unless and until all these extant owners do a resale (or any other form of disposal - by way of gift, bequest, transfer, etc) AFTER Oct 1999. Hence, it is NOT expedient for all intents and purposes. On an arbitrary and ad hoc basis, MinLaw breached the NON-RETROSPECTIVE cardinal principle for LTSA. This is an aberration when you compare it with how MND calibrated SSD. Below is the updated table of SSD structure extracted from IRAS file. Observing from a citizenrys perspective, the baby policy steps taken in implementing SSD (viz, 3 rounds of SSD over 11 months) reveal to me the PAP Governments policy trepidation and diffidence. In the national interest, nobody in their right mind would want the property market to crash all the more so when Central Provident Fund retirement savings are sanctioned for withdrawal in the purchase of residential property. But surely there must be bite to a policy change if the government-of-the-day is to retain credibility and earn public trust. Despite multiple rounds of purported property market cooling measures since 2007 when the first cooling measure was taken by PAP Government in withdrawing the Deferred Payment Scheme, the Private Property Price Index continued to ramp up relentlessly. The markets meteoric rise would have been even more spectacular if not for the 2008-09 Great Recession in the aftermath of Wall Street meltdown and Lehman Brothers collapse. The only redeeming factor is that MND did NOT give retrospective effect to SSD in all 3 rounds of policy changes (unlike what MinLaw did to LTSA)! Copyright - The Pariah, www.singaporeenbloc.blogspot.com

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http://www.iras.gov.sg/irasHome/uploadedFiles/Quick_Links/eTax_Guides/Stamp_duty/SD_Imposition_of_SD_on_Sellers_for_Sale_or_Disposal_of_Residential_Pty_7th_ed.pdf

Extracted from above IRAS file: SSD is payable on residential property purchased on and after 20 February 2010 and sold within certain duration, with amounts of duty computed as summarized in the following table:
Date of purchase/acquisition 1 Between 20 February 2010 and 29 August 2010 (all inclusive)* More than 1 year Within 1 year Holding Period Within 1 year SSD payable 1% on first $180,000 2% on next $180,000 3% on remainder, of consideration or value, whichever is higher No SSD payable 1% on first $180,000 2% on next $180,000 3% on remainder, of consideration or value, whichever is higher 0.67% on first $180,000 1.33% on next $180,000 2% on remainder, of consideration or value, whichever is higher 0.33% on first $180,000 0.67% on next $180,000 1% on remainder, of consideration or value, whichever is higher No SSD payable 16% of consideration or value, whichever is higher 12% of consideration or value, whichever is higher 8% of consideration or value, whichever is higher 4% of consideration or value, whichever is higher No SSD payable

More than 1 year and up to 2 years Between 30 August 2010 and 13 January 2011 (all inclusive)* More than 2 years and up to 3 years

More than 3 years Within 1 year More than 1 year and up to 2 years On or after 14 January 2011 More than 2 years and up to 3 years More than 3 years and up to 4 years More than 4 years
1

The date of purchase, acquisition and sale refers to the date the Option to Purchase is exercised or the date the Sale and Purchase Agreement is signed, whichever is earlier.

* The consideration or value has to be rounded up to the nearest $100 before applying the rate.

SSD payable to be rounded down to the nearest dollar.