STAMP DUTIES IN REAL PROPERTY

Abstract

Stamp duty is a tax that affects many property transactions and if the levies are too high may substantially reduce the return on an investment. It is a tax favoured by many countries, and in Singapore it accounts for a significant proportion of total tax revenue and ranks as the third largest source after income tax and property tax. The objectives of this dissertation are to highlight the inequity of the provisions in the Stamp Duties Act and to consider the extent to which such a tax renders Singapore less competitive when compared with those in other countries such as Hong Kong and the United Kingdom. In considering the second objective, a case study is carried out to determine the stamp cost that would be incurred by a real estate investor, taking into account the current rates of duty prevailing in these three countries. Rates of stamp duty in Singapore are considered to be on the high side. The stamp duty system is inequitable by virtue of the regressive nature of the stamp duty charges on mortgages. To promote globalisation through twinning with Hong Kong, there is clearly a need to make amendments to the stamp duty provisions in Singapore so as to render our system a competitive and an equitable one.