The Residential Property Act (RPA) defines a Singapore company as a company that is incorporated in Singapore and all its directors and shareholders are Singapore Citizens or Singapore companies. Based on this definition, most of the publicly listed housing developers and their subsidiaries would not be considered a Singapore company and will therefore have to apply for and obtain a Qualifying Certificate (QC) for the acquisition of residential land from persons other than the Singapore Government for the purposes of the development of a housing development.
The Ministry of Law announced on 6 February 2020 that listed property developers “with a substantial connection to Singapore” is now allowed to be exempted from the QC regime.
The firms are required to fulfil the following criterias:
- Be incorporated in Singapore,
- Listed on the Singapore Stock Exchange (SGX),
- Have a chairman and most Board members who are Singaporean citizens,
- Have a Singaporean with a substantial shareholding interest in the company, and
- Holds a track record in Singapore.
Changes will be implemented with immediate effect and reflected in legislation later this year. Some Singapore-listed housing developers can now apply to the Controller of Residential Property to be exempted from the QC rules.
This exemption is advantageous to the developers who qualify because it removes the administrative burden of applying for QC and fee payment each time they buy a residential site. It will free them from the conditions imposed under the QC which includes extension charges if they cannot meet stipulated deadlines to complete developing their projects and selling all the units, as well as the prohibition against the leasing of dwelling units comprised in the housing development after the temporary occupation permit is issued.
This does not change the existing property market cooling measures, which were put in place to keep private residential property price increases in line with economic fundamentals. All housing developers continue to be subject to the prevailing Additional Buyer’s Stamp Duty (ABSD).
In the latest parliament debate, it was added that the ABSD timeline will be reviewed on a case-by-case basis if the need arises.