Temporary relief measures for property developers, home-buyers of projects disrupted by Covid-19

SINGAPORE – The project completion period (PCP) for eligible residential, commercial and industrial developments will be extended by six months with immediate effect.

That means if the projects were originally required to be completed on Feb 1, they must now complete them by Aug 1.

Married Singaporean couples will have one year instead of six months to sell their first residential property to qualify for remission of additional buyer’s stamp duty (ABSD) for their second property.

These are among a slew of temporary relief measures for eligible property developers and individuals affected by disruption to construction timelines and sales of housing units owing to the Covid-19 pandemic, and the implementation of the circuit breaker measures from April 7 to June 1.

But there are no changes to existing property cooling measures.

To qualify for a six-month extension for remission of ABSD paid on the second property, the married couple’s second residential property must be jointly purchased on or before June 1 this year; and the original timeline for sale of the first residential property must have expired on or after Feb 1 this year.

Eligible couples can refer to the Inland Revenue Authority of Singapore (Iras) website for more details.

The application for the remission of ABSD must be made in six months after the date of sale of the first residential property.

The Real Estate Developers’ Association of Singapore (Redas) said the adjustment is timely and “will help to relieve the concerns of eligible Singaporean married couples who need more time to sell their first property and purchase their second property”.

Under the temporary relief measures, eligible developers now have two and a half years to start construction of residential projects.

They will also have five years and six months for the completion and sale of housing units in residential projects in relation to the remission of ABSD.

To qualify for the extension of the start of construction as well as the completion of the project and sale of its units, the land must have been purchased on or before June 1 and the original timeline for starting the construction expired on or after Feb 1.

Eligible developers will get the extension automatically. No application is necessary.

These measures are being introduced as the Covid-19 pandemic and ensuing public health measures by governments globally have disrupted supply chains and created manpower shortages. The circuit breaker measures also saw the suspension of work at construction sites and the shutdown of developers’ sales galleries and home viewings. This has affected construction timelines and the sale of homes.

The Government said it expects developers to provide relief and support to their main contractors, especially during the circuit breaker period.

Ms Christine Li, head of research for Singapore and South-east Asia at Cushman & Wakefield, said the temporary relief measures are “timely and… will give developers reprieve as some already have challenges meeting the five-year ABSD remission deadline”.

But the impact on developments that will hit the ABSD and PCP deadlines for 2020 is quite minimal, she added.

“This is because according to our calculation, only about 30-plus units remain unsold across five projects. Even without the extension, these developers have ways to clear the unsold stock in time. Even in 2021, there are only about 15 projects with about 400 units unsold.

“Even when things start to reopen, we expect social distancing measures to continue to affect showflat activities and buyers’ sentiment. The extension should not be a one-off measure as the Covid-19 situation continues to evolve,” Ms Li said.

For foreign housing developers, the PCP and/or sale period – now five years and two years from completion respectively – will be extended by up to six months on application for eligible residential projects under the Qualifying Certificate (QC) regime.

In addition, developers applying to extend their existing completion and/or disposal deadline will get a waiver of extension charges up to a maximum of six months. This will also apply to other SLA approvals requiring the completion and sale of all units in the residential development.

To qualify for the waiver of extension charges, the QC or SLA approval requiring the completion and sale of all units in the residential development must be issued on or before June 1 this year.

Another condition is the original timeline for completion and sale of units in the residential development must have expired on or after Feb 1 this year.

Eligible developers can apply to SLA’s Land Dealings Approval Unit (LDAU) at [email protected] by Dec 1.

Further, the project completion date for qualifying commercial and industrial development projects on government sale sites or on land which was directly alienated or had its lease renewed by the SLA will be extended by six months.

To qualify for the extension, the land must be awarded on or before June 1 this year, or the land was directly alienated or had its lease renewed by SLA on or before June 1 this year. The original timeline for completion of the project must also have expired on or after Feb 1 this year.

Eligible developers will be notified by the respective agencies. No application is necessary.

Read the latest on the Covid-19 situation in Singapore and beyond on our dedicated site here.

Get The Straits Times app and receive breaking news alerts and more. Download from the Apple App Store or Google Play Store now.

Source: Read Full Article