[Singapore] Top tier residential property tax should double, to avoid regressive GST increase.

Discussion in 'Budget & Taxes' started by Bic_Cherry, Feb 10, 2021.

  1. Bic_Cherry

    Bic_Cherry Active Member

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    Top tier residential property tax should double, to avoid regressive GST increase.

    Why 33.6% and other cavetes:
    Firstly, annual value (AV) is the value of a vacant property without any furnishings. Some of these properties contain many times the value of the property itself of collectors fine art, which generally do not attract any import tarrifs nor GST because customs officers have no idea how to value fine art. These princely castles are thus worth much much more than the AV portrays.
    Secondly, this top tier (33.6%) only applies fully if the property that is freehold (FH) since the basic property tax applicable to all before the FH additional surcharge, will max out at a top tier of 28% (which is 4X the current GST rate). [Current rates, see https://www.iras.gov.sg/irashome/Quick-Links/Tax-Rates/Property-Tax-Rates/ ]

    A freehold( FH) property tax surcharge of additional 20% will apply to freehold property owners.
    Pte property owners who wish to avoid the 20% property tax surcharge need to irreversibly convert their FH into leasehold (LH) 99 years title deeds at no cost at all.

    There should be a run in period of 5 years.
    For strata titled FH properties, the conversion is only possible if 90% majority of the owners consent.
    A 10 year run in period will be available to the bottom 80% of FH property owners and for them, the surcharge will increase in 10% (of the surcharge) staged increments each year. The top 20% of FH property owners will reach the 20% surcharge mark in 5 years.

    By either collection of additional FH property tax surcharges or having the entire Singapore uniformally living in 99 year LH residential properties, the government will then be able to spend more of the proceeds from land sales on the current government budget, rather than have to increase the level of GST whilst the rich live in palaces and the poor in Singapore suffer.

    By having to pay the additional 20% property tax surcharge in addition to up to the more progressive property taxation regime with tiered up to 40% level, the filthy rich will be able to contribute their fair share to the economy, just as they have plentifully gained prior since capital gains and inheritance are not taxable in Singapore.
    This more progressive residential property taxation system, besides being a more fair, sustainable and predictable property cooling measure, also allows more social mobility, since limiting the prices of the most luxurious private properties can also make them more accessible to the newly rich without large inheritance wealth.

    Many of the super rich obtained their wealth from capital gains and as a share of GDP, Singapore the wage share is much smaller, thus the filthy rich in Singapore can afford to be taxed much more, since it is probable that only by suppressing wages that the dividends to capital can be much higher and all this wealth has accumulated in the hands of shareholders enjoying low/ tax free capital gains and living in immensely oppulent FH houses resembling mini castles in fact.

    Have pity on the blue collared citizen worker, he doesn't need increase in GST to aggravate his plight.

    Have pity on the Singapore economy, the tourist will not come when everything is overpriced because GST implemented.

    Have pity on the bureaucracy, the higher the GST, the more temptation there is for civil servants to be corrupt due to the immense administration to administer citizen GST vouchers, tourist GST rebates etc where the incidence of administrative overload as much as corruption increases with the GST level.

    As Warren Buffet has said, the rich ought to do more and the SAF and police that guard the FH properties of the rich for eternity, really doesn't come cheap.

    Once a year, the rich should be reminded that whilst they have an eternal legacy to pass down, majority of Singaporeans are just 99 years or lesser 'tenants' and the next generation has little promise of inheritance (especially after the parents medical bills are factored in).

    Many residential property options are available in Singapore at equivalent property tax levels. The property tax for the bottom 20% property AV level tier will be tax free and 50% of all property tax collected will be rebated equitably into a CPF run government to citizen subsidies account, to be used for payment of statutory charges and taxes like all residential property taxes, Government school education, HDB down payment/ installments, medishield-life, utilities bill to a cap limit (also cannot be withdrawn upon demise or migration) etc. Except for those living alone in big houses or more expensive properties with few occupants, 50% of Singaporeans will effectively pay zero residential property tax consequence of these rebates or even have a property tax rebate surplus, usable to pay their HDB flat down payment/ installments.


    [​IMG]https://thehearttruths.com/2013/09/...owest-wage-share-among-high-income-countries/

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    PS: property cooling measures by stamp duty is totally ridiculous because it doesn't target the super rich people who don't have to sell their property to downgrade in case they have urgent cash needs. It is totally knee jerk and has the downside of preventing efficient use of property because some change residential property addresses because of proximity to school or work. To penalize short occupancy is to stifle the opportunity to efficiently find work at the risk of under employment and other secondary downsides of a knee jerk type property price control method.
    PS: 28% for max tier is in context of rebate at the 50 quotile level for all Singaporeans. Wrt PR, the rebate amount may be discussed later, sufficed to say, as wealth gap amongst Singaporeans is reduced, Singaporeans will have one less obstacle to overcome when marrying each other.
    PS: Since PM Lee HL is actively wooing super rich international businessmen to come to Singapore https://www.channelnewsasia.com/new...erin-brin-dyson-dalio-family-offices-14145418 , we should have an equitable and transparent property taxation method so they can contribute their rightful share and allow 50% of Singaporeans to pay zero property tax and the rest pro-rata reduced amount, especially in view of the contributions to NS.
     
  2. Bic_Cherry

    Bic_Cherry Active Member

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    Hi relaxlabrudder,
    Suggestion already answered I think.
    So relaxlabrudder, u actually think that the only nice good rich people are all ALREADY in Singapore? So much for navel gazing.

    Probably there are many who are queueing to contribute revenue/taxes to Singapore https://www.channelnewsasia.com/new...erin-brin-dyson-dalio-family-offices-14145418 whom we just haven't given them a chance yet.

    I have already said, when some FH GCB are under the Lease hold (LH) scheme, the prices will be more moderated and this improves social mobility, since newly minted rich people may be able to afford a LH GCB but not a FH GCB although they appear similar in every physical aspect.

    For the rich who reduce to pay the progressive property tax, they can go buy a secluded island and defend it with their own mini army and security guards where they can be the warlord on their own independent island where they can rule the flora and fauna like kings.

    Singapore doesn't need such selfish , anti-social and mean people around, who don't accept progressive taxation in a cosmopolitan world.

    This law will replace them, so let them swallow their pride and humbly downgrade and live happily in a HDB flat.

    [​IMG]

    [youtube]SKIOawq3jRk[/youtube]
     
  3. Bic_Cherry

    Bic_Cherry Active Member

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    Is PAP government in cahoots with rich developers to freeload for own benifit and enjoyment?

    How is it possible (/allowed) for these developers to retain the freehold land titles and yet sell the property as lease hold to buyers in this most egregious example of greed by land owners? Why was the PAP government then so obsequious to the USA government in 1991 when they set the precedence, do USA property laws and practises henceforth also apply in Singapore too?

    How is it that these private developers (not least the US government) can do as they please on Singapore soil and take full advantage of the loophole that capital gains and wealth attracts zero taxes in Singapore now?

    So the wealthy are allowed to exploit this glaring loophole and freeload on expensive to run organs of state like police, judiciary, legislature, civil service, army and even protection from Singapore's $100billion climate change flood mitigation plans etc for totally free, without even paying one cent on their capital gains?

    Isn't it high time for the Singapore government to either withdraw all freehold titles (force conversion to lease hold titles) just like PAP post independence confiscated land (vacant/farm etc) to build factories and HDB flats (which they then sold at construction costs only) or else have a additional freehold property tax category, priced at 100% property tax surcharge (annual valuation based) but discounted to the 10year government bond yield rate.

    E.g. to extend the FH status of a property annually in a year where 30Y government bond yields 3% , the owner of AV $60K property pays additional $3216 p.a. ($60k/1.03^99) to keep the freehold title (or else it would be immediately converted to lease hold 99 years after payment has lapsed for 1 year).

    PAP government today really needs to study how these developers and tycoons can appropriate FH land value for their own selfish enjoyment whilst poor people have to face increased food prices due to climate change (due to irresponsible business practises if corporates) and also increase in regressive GST taxes.

    PAP should stop being so obsequious toward rich people, even though many politicians may seek jobs in these corporates as a golden parachute when they find legislative/ public service work too stressful. Being a politician should be about serving the people, not about bootlicking the rich landlords and using parliament positions as a stepping stone towards highly paid directorship positions in these selfish and greedy property developer corporations -with massive FH land banks secretly increasing in capital value at the expense of tax payers/ the poor.

    Rent seeking is really getting out of control in Singapore now.
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    "In 2009, real estate developer Far East Organisation made the rare move of selling the 408-unit Shore Residences on a 103-year lease. It acquired the site in the East Coast area from the collective sale of the former Rose Garden, a freehold development.

    Thereafter, it started selling other leasehold properties carved out of the freehold sites it owns — such as the 119-unit Cabana at Yio Chu Kang in 2009, the 231-unit The Scotts Tower in the Orchard Road area in 2010, and the 62-unit Greenwood Mews in Bukit Timah in 2011."
    Read more at https://www.todayonline.com/singapo...hold-land-face-extra-poser-seeking-collective

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    PS: since there are approximately 3000 such FH sold as LH units, given the average AV of a condo as $22,200AV, and the current 30year government bond as yielding 1.872% p.a., property developer landlords should be paying approximately a total of $10.6M on this FH land title asset p.a..
     
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