Singapore Property - Maybank Kim Eng 2018-02-19: Higher Buyer’s Stamp Duty (BSD) A Small Dampener

Singapore Property - Maybank Kim Eng 2018-02-19: Higher Buyer’s Stamp Duty (BSD) A Small Dampener Singapore Budget 2018 Singapore Property Stocks CAPITALAND LIMITED C31.SI CITY DEVELOPMENTS LIMITED C09.SI UOL GROUP LIMITED U14.SI GUOCOLAND LIMITED F17.SI BUKIT SEMBAWANG ESTATES LTD B61.SI HO BEE LAND LIMITED H13.SI

Singapore Property - Higher Buyer’s Stamp Duty (BSD) A Small Dampener


Higher BSD should not derail property market recovery; Maintain POSITIVE 

  • The Singapore government announced higher Buyer’s Stamp Duty (BSD) for residential property purchases above SGD1m. This is a small dampener to property demand and will affect the high-end market more than mass-market homes. 
  • It also adds to the cost of acquiring land via the enbloc market and is a dampener to the profitability of developers that have not concluded their deals. 
  • Bukit Sembawang will be the most impacted while CapitaLand will be the least affected. 
  • While negative, we believe the impact is marginal and should not derail the property market recovery. Maintain POSITIVE on Singapore developers.



Higher BSD for residential properties worth > SGD1m 

  • The Singapore government announced higher BSD for residential properties worth over SGD1m. From 20 Feb 2018, transactions of properties with values above SGD1m will be charged a BSD of 4%, up from 3% previously. BSD for properties worth up to SGD1m is unchanged. 
  • Using transaction data for 2017 as a basis, this measure would impact 69% and 73% of new and all private home sales, respectively. It also affects the high-end market more than mass-market homes.


Higher cost for enbloc deals 

  • The higher stamp duty will also be implemented on properties acquired collectively. It will be based on the total purchase price of multiple properties if there is a single contract for the purchase of multiple properties, or if the purchases are dependent and conditional on one another. 
  • Essentially, this new measure will add to the cost of acquiring land via the enbloc market.


Slightly negative for developers 

  • This news is a slight negative for developers and will most impact those with large exposure to Singapore’s residential market. 
  • With this market accounting for almost all its valuation, Bukit Sembawang is the most impacted. CapitaLand is least impacted given its diversified geographical exposure. 
  • Overall, while this measure is incrementally negative on property demand, we believe the impact will be marginal and should not derail the property market recovery.







Derrick Heng CFA Maybank Kim Eng | http://www.maybank-ke.com.sg/ 2018-02-19
Maybank Kim Eng SGX Stock Analyst Report BUY Maintain BUY 4.100 Same 4.100
BUY Maintain BUY 13.800 Same 13.800
BUY Maintain BUY 9.850 Same 9.850
BUY Maintain BUY 2.950 Same 2.950
BUY Maintain BUY 8.250 Same 8.250
BUY Maintain BUY 3.000 Same 3.000



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