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Tax suggestion: impose capital gains tax on HDB gains when PR sells HDB

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Old 13-02-2018, 02:32 PM   #1
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Tax suggestion: impose capital gains tax on HDB gains when PR sells HDB

HDB is meant for residential purpose, not speculation. The purpose of letting PR buy HDB is for them to make Singapore a home. If PRs abuse their privilege as PRs to use HDB as a vehicle to make speculative profits, capital gains tax should be imposed heavily on them since HDBs are subsidised housing.

I would like to suggest to PAP to impose hefty capital gains taxes on PRs who sell HDBs.

In the past, I even know of PRs who left Singapore for home but use HDB to earn rental income, then sell HDB for a good profit. This is ok if they are investing in private property. However, this is not ok for HDBs as HDBs are built with subsidised taxpayers' money.

I repeat. Impose hefty capital gains taxes on PRs who sell HDBs.
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Old 13-02-2018, 02:48 PM   #2
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I recommend expanding your recommendation to taxing both Sinkies and PR when they sell their flat or withdraw from their CPF.

All these will be treated as income and taxed at a maximum rate of 22%.

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Old 13-02-2018, 02:51 PM   #3
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I recommend expanding your recommendation to taxing both Sinkies and PR when they sell their flat or withdraw from their CPF.

All these will be treated as income and taxed at a maximum rate of 22%.

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Making money from HDB is a right for Singaporean, especially those who have done NS. PRs did not do NS. If they don't want to make Singapore their home, then the money they make from subsidised HDB should be taxed.
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Old 13-02-2018, 02:57 PM   #4
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Making money from HDB is a right for Singaporean, especially those who have done NS. PRs did not do NS. If they don't want to make Singapore their home, then the money they make from subsidised HDB should be taxed.
I agree totally!

You only pay tax if you're making money from HDB!
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Old 13-02-2018, 03:26 PM   #5
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Making money from HDB is a right for Singaporean, especially those who have done NS. PRs did not do NS. If they don't want to make Singapore their home, then the money they make from subsidised HDB should be taxed.
PRs can buy only 5 year old resale HDBs. Also they can never rent it out. If they leave Singapore they are forced to sell it.

I am not defending PRs, but some food for thought. If PRs are not there to buy the overpriced resale HDBs, who will Singaporeans sell them to, in order to upgrade to condo?

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Old 13-02-2018, 03:39 PM   #6
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PRs can buy only 5 year old resale HDBs. Also they can never rent it out. If they leave Singapore they are forced to sell it.

I am not defending PRs, but some food for thought. If PRs are not there to buy the overpriced resale HDBs, who will Singaporeans sell them to, in order to upgrade to condo?

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Sure PRs can buy. But they should be subjected to capital gains tax. If the resale HDBs are really overpriced, would PRs want to buy?
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Old 13-02-2018, 03:57 PM   #7
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Making money from HDB is a right for Singaporean, especially those who have done NS. PRs did not do NS. If they don't want to make Singapore their home, then the money they make from subsidised HDB should be taxed.
Why people would seek to implement capital gains tax is beyond me. Once the basic legislation is out, it's just a matter of revision to extend it to everyone.

It's so easy to justify increase in tax collection when your expenditure increases.
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Old 13-02-2018, 04:06 PM   #8
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Sure PRs can buy. But they should be subjected to capital gains tax. If the resale HDBs are really overpriced, would PRs want to buy?
There is already ABSD of 5% for PRs. Then with all the restrictions on renting and selling, they would rather buy condo.

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Old 13-02-2018, 04:08 PM   #9
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There is already ABSD of 5% for PRs. Then with all the restrictions on renting and selling, they would rather buy condo.

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When it comes to private property, it is fair game to make money from speculation because private property are not subsidised with taxpayers' money. HDBs are subsidised. Hence, HDBs should come with some form of taxes if foreigners use them as a tool for speculation.
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Old 13-02-2018, 04:09 PM   #10
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Got make money means must pay tax.

We have a part to play for our country!

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Old 13-02-2018, 04:19 PM   #11
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When it comes to private property, it is fair game to make money from speculation because private property are not subsidised with taxpayers' money. HDBs are subsidised. Hence, HDBs should come with some form of taxes if foreigners use them as a tool for speculation.

only BTO is subsidised.

Resale HDB flats are always market-based.
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Old 13-02-2018, 05:25 PM   #12
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PRs did not do NS.
First generation PRs, generally not, but second and subsequent generation male PRs are liable for National Service.

Also, many PRs are the spouses of citizens. I don't advocate effectively penalizing Singaporean citizens just because they happened to fall in love with non-citizens.

We should also point out that newly minted PRs have to wait a minimum of 3 years before they can buy resale HDB units.

Another interesting "quirk" not yet mentioned is that PRs (and citizens for that matter) who pull up stakes, relocate to another country, and sell their HDB units are then often liable for income tax under the tax code of that foreign country. Or, if they rent out their HDB units (something a PR cannot do to any significant degree), the rental income is often subject to tax in the foreign country of residence, typically less a foreign tax credit (to subtract the Singapore income tax owed on that income). Moreover, some countries have wealth taxes. For example, a resident of Italy with an HDB unit would have to declare that unit on Italy's Form RW and pay an annual wealth tax on that foreign real estate equal to 0.76% of the price of that HDB unit, with a credit generally allowed for Singapore property tax. A S$400,000 HDB unit would attract S$3,040 of annual Italian wealth tax, for example (less any Singapore property tax, most likely). It's also possible for a PR or citizen to be subject to foreign estate or inheritance tax on his/her HDB unit. Japan, for example, has a 10 year "look back" period. Japanese citizens and ex-long-term residents of Japan are generally subject to Japanese inheritance and gift tax rules for 10 years after they leave Japan.
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Old 13-02-2018, 05:29 PM   #13
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First generation PRs, generally not, but second generation male PRs are liable for National Service.

Also, many PRs are the spouses of citizens. I don't advocate effectively penalizing Singaporean citizens just because they happened to fall in love with non-citizens.

We should also point out that newly minted PRs have to wait a minimum of 3 years before they can buy resale HDB units.

Another interesting "quirk" not yet mentioned is that PRs (and citizens for that matter) who pull up stakes, relocate to another country, and sell their HDB units are then often liable for income tax under the tax code of that foreign country. Or, if they rent out their HDB units (something a PR cannot do to any significant degree), the rental income is often subject to tax in the foreign country of residence, typically less a foreign tax credit (to subtract the Singapore income tax owed on that income). Some countries have wealth taxes. For example, a resident of Italy with an HDB unit would have to declare that unit on Italy's Form RW and pay an annual wealth tax on that foreign real estate equal to 0.76% of the price of that HDB unit, with a credit generally allowed for Singapore property tax. A S$400,000 HDB unit would attract S$3,040 of annual Italian wealth tax, for example (less any Singapore property tax, most likely).
You made good points.

I would propose that exceptions be made to PRs who produce baby boys who will become future soldiers for Singapore. Marrying a Singaporean is not useful unless the couple gets productive in the bedroom and produce boys who will grow up to play a part in defending Singapore. Don't just enjoy sex. Produce something useful with sex!

Interesting point about Italians. If I were an Italian, I will surely convert to become a Singaporean to take advantage of the low tax regime in Singapore.

Last edited by agau168; 13-02-2018 at 05:34 PM..
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Old 13-02-2018, 05:35 PM   #14
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Also, many PRs are the spouses of citizens. I don't advocate effectively penalizing Singaporean citizens just because they happened to fall in love with non-citizens.
Defer the tax on those who sold HDB and renounced their PR to go back to home country.

I consider this as really a betrayal to Singapore.

I have personally seen a friend who sold HDB and renounced PR, went back to home country. And still managed to apply for S Pass 1 year later.

If I'm the MOM controller, I would not approve such application.
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Old 13-02-2018, 05:49 PM   #15
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I have personally seen a friend who sold HDB and renounced PR, went back to home country. And still managed to apply for S Pass 1 year later.

If I'm the MOM controller, I would not approve such application.
Why not? That S Pass holder is extremely unlikely to recover his/her PR status in the future, but that person (and his/her employer) is going to pay some taxes, mostly to benefit Singaporean citizens. That's a great deal for Singapore, actually. It's not the smartest move for the ex-PR.

There really aren't very many PRs who are not living in Singaporean citizen households and who have at least 3 years of residence in Singapore. PRs just aren't buying many HDB units, and 100% of the few units they buy were first owned by Singaporean citizens who were paid market rates. That's a great deal for Singaporeans, truly.
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