Seller%E2%80%99S Stamp Duty Reset Timely Move Curb Speculation

The government has announced that it will increase the Seller’s Stamp Duty (SSD) holding period to four years, beginning on July 4. This policy change, which also includes a four-percentage-point increase in rates across all tiers, is a return to levels seen before March 2017.

In a joint statement released on July 3, the Ministry of National Development, the Ministry of Finance, and the Monetary Authority of Singapore stated that the decision was made due to a steady rise in sub-sales since 2020. These sub-sales, which refer to transactions where buyers re-sell uncompleted units before obtaining the Certificate of Statutory Completion (CSC), are often seen as an indicator of speculative activity by experts like Ismail Gafoor, the CEO of PropNex.

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The increase in SSD has been attributed to the significant increase in sub-sale transactions, from 198 units in 2020 to 1,428 in 2024, as reported by the Urban Redevelopment Authority (URA). This rise coincided with construction delays caused by the Covid-19 pandemic and a sharp recovery in property prices, which have risen by about 40% since 2020.

CBRE’s head of research for Singapore and Southeast Asia, Tricia Song, believes that this rise can be attributed to owners who did not initially intend to flip their properties, but ended up doing so due to significant capital gains as prices surged. Knight Frank Singapore’s head of research, Leonard Tay, explains that construction bottlenecks during the pandemic have caused delays in project completions, leading to a surge in sub-sales.

Since 1Q2023, the average quarterly sub-sale volume has remained at around 338 units, more than double the quarterly average of 131 units between 2013 and 2022. Many of these sales were made by buyers who entered the market during the low-interest-rate environment before 2022 but now face higher financing costs. Realion Group’s chief researcher and strategist, Christine Sun, believes that the SSD adjustment is a preemptive step to limit future speculative activity, especially as more developments near completion. She notes that private home completions are expected to rise from 5,920 units in 2025 to 6,838 units in 2026 and 10,306 units in 2027.

According to Gafoor, sub-sales in recent years have remained below the levels recorded in 2007-2012. He views the latest SSD revision as a preemptive move to moderate short-term resales, particularly as the government plans to ramp up private housing supply across new neighborhoods.

While the SSD targets short-term speculation, it is unlikely to have a significant impact on most homeowners. ERA Singapore’s CEO, Marcus Chu, notes that the majority of sellers hold their properties for at least five years. In 1H2025, 72.1% of homeowners sold their properties after holding them for five years or more.

However, there has been a noticeable rise in transactions involving properties held for three to four years, from 358 cases in 2021 to 2,104 in 2024. In 1H2025 alone, there were 858 such sales, accounting for 14.7% of resale transactions. Most of these were in the Outside Central Region (OCR), where entry prices are typically lower.

Factors such as elevated interest rates since late 2022 and property tax revisions in 2023 have reduced investment yields, prompting some sellers to bring forward their exit, according to Chu. However, data shows that the highest gross profits are made by those who hold their properties for five years or more.

According to the data from the Urban Redevelopment Authority (URA) compiled by SRI Research, the average holding period in the Outside Central Region (OCR) segment ranged between 4.4 and 5.5 years as of 1H2025. In the Rest of Central Region (RCR), the majority of properties were held for more than five years, with projects such as The Tre Ver and The Woodleigh Residences showing average holding periods of 6.2 and 5.2 years, respectively. In the Core Central Region (CCR), most sub-sale transactions were clustered around the four-year mark.

Experts like Mohan Sandrasegeran, head of research and data analytics at SRI, believe that the policy acts as a refinement, not a shock. He explains that it reinforces discipline without destabilizing genuine demand. According to Sandrasegeran, by encouraging longer holding periods, the policy allows for better absorption of supply over time, creating a more balanced and sustainable market.

Data analytics senior director at Huttons Asia, Lee Sze Teck, believes that the SSD may not have a significant effect on market prices. He notes that a correlation test between sub-sale volumes and the URA price index from 2017 to 2Q2025 revealed a weak relationship. Instead, a strong correlation was found between sub-sale volumes and the number of units launched three years prior, suggesting that sub-sales are more influenced by launch volumes than speculative intent.

Despite more new launches expected and a greater land supply under the Government Land Sales (GLS) program, property prices are expected to remain stable through the rest of the year, according to a spokesperson for the Real Estate Developers’ Association of Singapore (REDAS). The market has shown signs of moderation, with private residential prices rising just 1.3% in 1H2025, down from 2.3% in 1H2024. Hence, REDAS expects the revisions in SSD to have a limited impact on genuine home buyers, particularly Singaporeans and permanent residents.

Meanwhile, some investors may switch to commercial assets, such as strata offices and shophouses, which are not subject to SSD or ABSD, according to Gafoor.