Budget 2024: Developers with at least 90% of units sold offered tiered ABSD as โ€˜an olive branchโ€™

Budget 2024: Developers Offered Tiered ABSD Clawback Rates

The Deputy Prime Minister and Minister of Finance, Lawrence Wong, announced a tiered clawback rate for residential property developers' additional buyer's stamp duty (ABSD) regime during the Budget 2024 statement on Feb 16. This new tiered ABSD clawback rate applies only to residential projects where developers have sold at least 90% of the units within the five-year stipulated time frame, with an additional six-month extension during the Covid period.

Here's a breakdown of the new tiered ABSD clawback rate:

  • If a project is 99% sold, the developer must pay a 25% ABSD on the land price.
  • If a project is 94% sold, the ABSD clawback rate is 30%.
  • If a project is 90% sold, the ABSD clawback rate is 34%.

Developers are still motivated to sell all 100% of the units within the five-year timeframe, but this new tiered ABSD clawback rate provides some relief to the property sector. It allows developers to have some flexibility in clearing the last few units without having to offer excessive discounts or dangle abnormally high commissions.

However, the ABSD clawback is still calculated based on the land acquisition cost and not on unsold units. This means that developers will still be motivated to offload their remaining units as close to 100% as possible to avoid paying extra ABSD on the land.

In conclusion, the tiered ABSD clawback rates offer some relief to developers, but they still face challenges such as escalating development costs, a sluggish economic climate, and softer housing demand. Developers will remain guarded, selective, and strategic in their land acquisition activities, and the private collective sales market may continue to present challenges due to differing price expectations between developers and sellers.


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