i am surprised that news about singapore property market is so singapore-centric. There are certain developments that are around the corner that may well affect adversely the singapore market and which property analysts seem to be "blissfully" unaware of, always saying recovery is around the corner, (from reporter2's posting of news articles).
Just a quick recap:
AEOI/CRS refers to the Automatic Exchange of Information/Common Reporting Standard in 2017/2018.
Having had a cursory glance at it, on the surface it looks like real estate will not be reported in the AEOI (hooray)
However, if foreigners (let's say Indonesian) take a mortgage, then the financial institutions will have report to the Singapore authority who will then report to the Indonesian authority (boohoo).
And if you have a bank balance above a certain amount in Singapore, it will also be reported to the Indonesian authority.
So if you want to buy property on a cash basis, better start accumulating the $10.000 singapore note
it maybe be slightly worth more than the face value since it is no longer being printed.
by the way, the main foreign buyers of singapore properties, china, malaysia, indonesia, india are participating in the AEOI/CRS
so supposedly singapore authority have to report back these nationals assets to their countries, the assets being reported not only property, but which includes shares, bonds, trusts, insurance. etc. so if have bank account, report. brokerage account, report. CDP account, report. CPF account, report. insurance policies (excluding term life, health), report. trusts, report.
some naysayers say the wealthy will always find a way. sure they do. but the bulk of the buyers of singapore property are the middle class, they can't really afford a second citizenship/tax residency ($400k for a St Kitts second citizenship).
Upcoming Indonesian Tax Amnesty
It is still in the draft version.
The Indonesia government/tax authority has been drumming the message that
"with the upcoming AEOI/CRS, indonesians can no longer hide their assets overseas, especially in Singapore. Singapore government will report your assets in Singapore to the indonesia government. so better declare truthfully all your assets and apply for the Tax Amnesty and pay a small fine".
The latest news about the tax amnesty if you want to apply for the tax amnesty, you need to REPATRIATE the funds back to Indonesia and buy the government bonds for a year.
In addition to the repatriation, you need to give the tax authority the power of attorney so that tax authority can check your bank balances whenever and wherever they want.
And since they use the italian model for tax amnesty, i am wondering whether Indonesians have to sell their property in singapore in order to repatriate their funds.
I remember reading about italians having had to sell their property in switzerland (no need if their property in certain other european countries) and repatriate the proceeds if they want to apply for tax amnesty.
well, everybody is waiting for the tax amnesty bill to be passed in indonesia parliament so that they can study it and take the necessary action.
Do you think that AEOI/CRS and Indonesia Tax Amnesty may well adversely affect the singapore property market?
Are the ostriches burying their head in the sand talking about recovery near the corner?
ps.
personally, my take is the Indonesian government is trying TOO damn hard trying to convince the people that "with the upcoming AEOI/CRS, indonesians can no longer hide their assets overseas".
Why the need for tax amnesty in 2016 since if they wait for 2 more year, ie 2018, they can find out anyway and indonesians will pay the basic tax payable and then the associated penalties, which cumulatively can be more than the asset.
ie if a person found out to have a undeclared bank balance of $1million in singapore, tax payable (basic tax + penalties) may well be more than $1million.
so that leave 2 possibilities
1) AEOI/CRS is not the all powerful tool as they claimed to be, there are certain provisions in the AEOI/CRS that may be taken advantage and which the Indonesian authorities don't want to advertise.
for eg. real estate free and clear is not being reported, those bought in the 80s-90s are likely free and clear. those bought early 00's need to pay off the remaining mortgage. those bought near the 2010's are caught in a bind, the outstanding mortgage is still huge.
2) a way for the white washing of illegal proceeds, a given
I always remember this supposed quote by Joseph Kennedy that "he would willingly give up half of what he had if he could be assured that he could keep the other half".
i am trying to "psycho" myself to Kennedy's mindset
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