By Romesh Navaratnarajah: In his Budget 2013 speech, Deputy Prime Minister and Finance Minister Tharman Shanmugaratnam said that Singapore faces pressing challenges in housing and transport and the government will spare no effort in resolving these issues.
Housing costs will look to be reduced relative to the income of young Singaporeans. According to the Minister, major steps have already been made to cool the property market.
"We've also ramped up supply of HDB flats for first-timers," he added.Meanwhile, property taxes for residential properties will be increased.
Mr Shanmugaratnam said: "Those who live in the more expensive homes should pay higher taxes."
In addition to the zero percent, four percent and six percent tax rates, new rates of between eight to 16 percent will be introduced.
Meanwhile, high-end investment properties will see significant increases in tax rates with the previous 10 percent rate now up to between 12 and 20 percent.
Suburban condominiums will see a S$300 per year increase in tax while high-end property with an annual value of S$150,000 will get a tax hike of S$9,000 per year.
The revisions to the tax structure will come into full effect on 1 January 2015. At the same time, in a bid to reduce the country's reliance on foreign labour, Mr Shanmugaratnam said manpower efficient designs and technologies in the building sector will be used. He also noted that levy rates for less skilled Work Permit Holders in construction will increase by S$150 between July 2013 and July 2015.
Meanwhile, there will be steeper levy increases of S$300 for workers hired outside a company's Man-Year Entitlement (MYE).
However, there will be no further cuts to the MYE in construction this year.At the same time, the government will look to support companies that intensify land use in Singapore through the Land Productivity Grant.
This also applies to firms that contribute to saving land by choosing to relocate some of their operations offshore, while maintaining core functions in Singapore.
An allowance of about S$60 million has been allocated by the government for this purpose. Romesh Navaratnarajah, Senior Editor of PropertyGuru, wrote this story. To contact him about this or other stories email firstname.lastname@example.org Related Stories: New plans for Woodlands unveiled
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