Property agents notice the uptick by Singapore wealthy families buying apartments for their children who are old enough to own property in order to work around cooling measures. Some rich families are also setting up trust accounts in their children below 21 in their children’s names allowing the parents to hold the property for them.
The additional buyer’s stamp duty (ABSD) has been now levied at 12% for second homes and 15% for third and subsequent properties. The high ABSD rate has since encouraged parents to act by using their children’s names to acquire another private residential property.
The Urban Redevelopment Authority (URA) data released last week stated that private residential prices rose for the first time since the introduction of the housing curbs. The increase in luxury apartment sales has led to the dwelling values rising 1.5% in the three months through 30 June.
Setting up a trust’s structure for parents to hold a property for their minor children is a more expensive route to go. Such properties would act as an additional expense and incur ABSD for these children in the future as unless they sell the property gifted by the parents, any future property purchase would be counted as their second home.
Source: Bloomberg website, 31 July 2019.