New tax laws for singapore

A Change to the Singapore tax law, which was due to take effect in January next year, has been the subject of much controversy as many believe that the new rules could be extremely damaging to the country's property industry - but now the Singapore Government has made a move to clarify the changes and reassure those that the rules will not be a negative Change - but some remain unconvinced...

The new income tax laws have been widely regarded as a move to combat speculation in the real estate sector, as they appeared to be aimed at those who had sold property within four years with the purpose of making a profit.

This sent investors into panic mode, as they were concerned they would be hit hard by increased taxes -especially as many had only just braved the volatile market and ventured back into investing in the country.

Others were worried the proposed rules would make these new investors pull out of the market again, thus damaging the Singapore property recovery.

But now the Ministry of Finance (MOF) has said that there will be no tax on the gains from an individual who sells a property after 1st January if they have not sold any other property in the previous four years.

The MOF said, "It does not mean that individuals who have sold more than one property within a four year period will automatically be subject to income tax."

But experts are still calling for clarification as the wording leads some to believe that individuals who sell more than one property over a four year period will indeed pay more tax.

In 1996, the Government imposed tax on the gains of individuals made from selling properties within three years of purchase. This continued until 2001 when it was scrapped.

Confusion over the new income tax rules still reigns and clear statements over the new tax regime have not yet been forthcoming from the Government.

 Many still believe that real estate investors in Singapore may duck out of the market until there is a firm grasp of the implications of the new rules.

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