It is not expected from a 24-year-old student to invest in a penthouse worth $2.1 million; especially in the most expensive real estate market in the entire world.
As per a recent report from Singapore real estate sector, Shawn owned a loft-style apartment at leafy central Bukit Timah region and the payment for the same was done by his mother. Experts reveal that such scenarios are becoming more common in this market because of the cooling measures and increase stamp duty on buying 2ndand 3rdhome. Hence, parents are buying new homes for their children.
Property agents reveal that a noticeable rise in the apartment-style properties has been observed as most wealthy families these days are spending money by the name of their children. Note that, the additional stamp duty on buying a second and third home in Singapore is increased to 12% and 15% respectively.
The head of research and consultancy team at Orange Tree & Tie, Ms. Christine Sun recently said that more young buyers are entering into the real estate market. It is probably due to the lesser stamp duty. Many well-established families consider such investments best way to invest their wealth.
Luxury Sales:
As per the stats provided by the Urban Redevelopment Authority, the prices for private residential properties rose for the first time after the introduction of housing curbs. Furthermore, dwelling values further jumped to 1.5% in the past three months.
Generally, it is observed that parents take the opportunity to buy a new house, but with the high stamp duty, they are now acquiring private residential properties on the name of their child. Well, this idea works only if the child has reached the specific age group and can genuinely own a property. In case if they are below 21 years old, the families are opening new trust accounts on the name of their child so that parents can hold property by their name.
Trust Structures:
As per trust structure, it is acceptable that parent can hold the property on behalf of their minor child, but the property actually belongs to the child only. Although property agents in the area do not have exact stats about how much trust accounts have been already set up, experts reveal that most of the families are opting for this option. But it is essential to note that it is still an expensive way to own property.
Mr. Nicholas Mak from APAC Realty unit recently revealed that it is not that easy to establish trust accounts; it is not cheap as well. Such options are suitable just for the wealthiest families in the area.
Some experts further added that the liability of stamp duty for such purchases would be assessed by considering the property count and profile of the beneficiary.
https://www.straitstimes.com/business/property/singapore-rich-kids-are-ending-up-with-penthouses-as-parents-skirt-taxes
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