How much Capital Gain Tax You are Willing to Pay?

[richwang]

I guess this is the right group to ask this question. How much capital gain tax you are willing to pay?

1) 0%;
2) 3%;
3) 5%;
4) 7%;

Thanks,
Richard

[land118]

No one will volunteer and say they are willing to pay...all policies are Top down....if have choice don't want to pay GST even....

[richwang]

Thanks. So you are willing to pay 0%. I am willing to pay 5%. So we have

1) 0% - 1;
2) 3% - 0;
3) 5% - 1;
4) 7% - 0;

Thanks, Richard

[Rosy]

We have 4yrs ssd in place already. Remove ssd and intro capital gain tax or stay status quo

[irisng]

Thanks. So you are willing to pay 0%. I am willing to pay 5%. So we have

1) 0% - 1;
2) 3% - 0;
3) 5% - 1;
4) 7% - 0;

Thanks, Richard

I'm not willing to pay either:p. Already paid 25% levy (aprox $100+) when I sold my previous HDB flat, now still need to pay, no money already. Want to go to far away tour, also have to consider very carefully, cannot spend so much, if not, not enough money to pay for my instalments.

[richwang]

The current SSD is on the total sales proceeds, and it is charged regardless of whether you are making money. It is useful when market gets too hot, but the side effect is very serious. When market goes down, people get confused of whether to sell or not.
If they sell, they make a loss up front

1) 16% - 1st year;
2) 12% - 2nd year;
3) 8% - 3rd year;
4) 4% - 4th year;

If they don't sell, and the market drops more than the SSD, they make a loss. When they actually take that loss - oh dear, they still need to pay SSD.

That's not fair!

Capital Gains tax is better, you only pay tax when you make money.

Thanks,
Richard

[hopeful]

I dont want to pay capital gain tax.
But I am willing to pay GST.
GST being a consumption tax is more equitable.
The more you consume, the more you pay.
So should charge GST on all purchases, including properties.

of course, GST losses should be able to carry forward into following years. afterall, we dont buy and sell properties within a year.

[Laguna]

I dun want to pay capital gain tax nor SSD
I rather give the monies to charities

[irisng]

The current SSD is on the total sales proceeds, and it is charged regardless of whether you are making money. It is useful when market gets too hot, but the side effect is very serious. When market goes down, people get confused of whether to sell or not.
If they sell, they make a loss up front

1) 16% - 1st year;
2) 12% - 2nd year;
3) 8% - 3rd year;
4) 4% - 4th year;

If they don't sell, and the market drops more than the SSD, they make a loss. When they actually take that loss - oh dear, they still need to pay SSD.

That's not fair!

Capital Gains tax is better, you only pay tax when you make money.

Thanks,
Richard

If that's the case, then SSD should do away. People might then consider capital gain tax but not so much, maybe 0.01% hehe. :p

[land118]

One group will be willing to pay: our million dollar salaried Ministers...:2cents:

[amk]

What are you trying to achieve by imposing capital gain tax Richard ?

And, "capital gain tax" in most countries include gain on stocks and " other assesible gain via trading" , are you aware ?

As I said in the other thread, 0 capital gain tax here is one of the basic spirits of our tax systems. In my opinion there is no need to weaken this unnecessarily.

[richwang]

Well, I've spoken to some MPs, unfortunately they are the ones NOT willing to pay capital gain tax. GST on food, etc is nothing to them.

Thanks,
Richard

[hopeful]

Well, I've spoken to some MPs, unfortunately they are the ones NOT willing to pay capital gain tax. GST on food, etc is nothing to them.

Thanks,
Richard

how about GST on properties?

[richwang]

A quick google search get this one on top:

http://www.sctax.org/dor_help/Why+Do+We+Pay+Taxes.htm

I know it is not Singapore, but some justifications are valid for Singapore as well.

Everyone pays taxes in one form or another- mostly income and sales taxes. But why
do we pay these taxes?

There are many services offered to citizens that could not be managed effectively
under any other system.

The federal government uses your tax dollars to support Social Security, health care,
national defense and social services such as food stamps and housing.

Services provided by taxes in South Carolina are public schools, safe highways, health
care, prisons and social services for low-income citizens. The city or county where
you live provides water and garbage service, police and fire protection and also
contributes to public schools.

We can all admit that these services are necessary. But why must they be paid for
with taxes? Why shouldn't we just pay individually for what we use? The answer is
simple: Because no one could afford it. Each person would have to pay the full fee for
the service regardless of their ability to pay.

Our tax system is based on our "ability to pay." The more money we earn, the more
taxes we pay. And the opposite is also true. If we earn a small income, we pay less
taxes.

[richwang]

There is a timing difference between GST and Capital Gain Tax.
GST is paid when you buy. Capital Gain Tax is paid when you sell (and make money.)

Thanks,
Richard

[evergreen]

MP's won't want to impose capital gains tax because it means they themselves have to pay! :D
I rather have SSD than capital gains tax too. For property, it is fairer to have SSD because it "stabalizes" the prices.
If capital gains tax is imposed, property prices will be driven up as sellers increase prices to maintain their margins.


how about GST on properties?
If pay GST on properties, won't that be double taxation? The developers already paid GST on the construction.

[Worsty]

I'm willing to pay CGT if we don't have to pay interest on the the amount that we 'borrow' from CPF to pay for our mortgage.

I'm alright to pay CGT up to 5%.

I'm speaking from the point of someone that doesn't have decades/years of accumulation of wealth and still depend on CPF to assist in paying their mortgage. (generally 80-90% of the population)

Any tax be it GST or CGT will be beneficial to the rich since necessities (such as your first and only home) is always a smaller portion of their disposable income for them.

If the idea is to help devise means to generate revenue for the government, my views are to reduce or remove GST or any tax like stamp duty for a basket of necessities such as rice, milk powder, cooking oil, bread, etc etc including your first home purchase while increasing personal income tax and the levy for the casinos (both for individual Singaporeans as well as for the casino itself).

[devilplate]

Since they oredi impose draconian 4yrs ssd....no point toking abt cap gain tax liao lar.....there is no way govt can remove the ssd now unless prices of pte ppty drop alot!

So richwang, pls stop ur idea la.....u want us to pay cap gain tax on top of 4yrs ssd?

[evergreen]

I'm willing to pay CGT if we don't have to pay interest on the the amount that we 'borrow' from CPF to pay for our mortgage.

I'm alright to pay CGT up to 5%.

I'm speaking from the point of someone that doesn't have decades/years of accumulation of wealth and still depend on CPF to assist in paying their mortgage. (generally 80-90% of the population)

Any tax be it GST or CGT will be beneficial to the rich since necessities (such as your first and only home) is always a smaller portion of their disposable income for them.

If the idea is to help devise means to generate revenue for the government, my views are to reduce or remove GST or any tax like stamp duty for a basket of necessities such as rice, milk powder, cooking oil, bread, etc etc including your first home purchase while increasing personal income tax and the levy for the casinos (both for individual Singaporeans as well as for the casino itself).
I think the policy of paying back the amount we "borrow" from our own CPF is really stupid.
I agree we should remove GST for essentials. But it also means we need to impose tax or increase tax on something else. I suggest alcohol and tobacco products. Increase tax on winnings from betting and gambling. Increase tax on vice businesses such as KTV.

[amk]

That's why I ask Richard what his purpose is for a capital gain tax.
For the sole purpose of controlling pty prices, it's already totally redundant. More over there are better administrative measures to do it.
Brosd base capital gain tax is detrimental to a service economy like us. No we are far from a mature economy.
And have you talked to any tax partner in an accounting firm ? They will tell you it's unnecessarily difficult to enforce. Even just capital gain on pty only, how to define "gain" ? Inflationary cost excluded ? Is that fair ?
Btw please do not assume the gov does not want to do capital gain tax just because the officials themselves dun want to pay. This is so wrong. Our government is not like India or China. The gov's reason is valid. Dun doubt it on that.

[amk]

I think the policy of paying back the amount we "borrow" from our own CPF is really stupid.
I agree we should remove GST for essentials. But it also means we need to impose tax or increase tax on something else. I suggest alcohol and tobacco products. Increase tax on winnings from betting and gambling. Increase tax on vice businesses such as KTV.

This is far more equitable, I agree. But the enforcement will be tough. UK has this system of essential or raw goods and svcs are not taxed. However it brings a lot of enforcement irregularities. A uber expensive sushi carries no VAT because it's "raw fish" hence essential item, whereas bacon does as it's processed and thus no longer essential. A lot of administrative work to differentiate diff categories of items and services, and there are a lot of loopholes and creative go-arounds. I personally suspect this is the reason gov here does not want to do that...

[hopeful]

MP's won't want to impose capital gains tax because it means they themselves have to pay! :D
I rather have SSD than capital gains tax too. For property, it is fairer to have SSD because it "stabalizes" the prices.
If capital gains tax is imposed, property prices will be driven up as sellers increase prices to maintain their margins.


If pay GST on properties, won't that be double taxation? The developers already paid GST on the construction.

How is it double taxation? Developers are charged GST, but they dont "directly" charged GST to buyers. Dont think they absorbed GST, rather GST is included in the sales price.

So when we buy properties, we pay GST, when we sell, we receive GST. Those who are the end user have to bear the whole GST.

[hopeful]

This is far more equitable, I agree. But the enforcement will be tough. UK has this system of essential or raw goods and svcs are not taxed. However it brings a lot of enforcement irregularities. A uber expensive sushi carries no VAT because it's "raw fish" hence essential item, whereas bacon does as it's processed and thus no longer essential. A lot of administrative work to differentiate diff categories of items and services, and there are a lot of loopholes and creative go-arounds. I personally suspect this is the reason gov here does not want to do that...

That is the reason given by one official.
He gave the example of takeaway orders and dine-in orders.
One is charged VAT, the other isnt'. Basically changed the consumption pattern.

[richwang]

SSD is bad. It kills the market activities, not good for economy.
Let me try to work out how SSD can be converted to CGT.
Let's assume price can go up net 20% in the 1st year (dream on). 16% SSD is equivalent to 16%/20% = 80% CGT.

So if SSD is removed, and introduce CGT

1) 1st year - 80%;
2) 2nd year - 60%;
3) 3rd year - 40%;
4) 4th year - 20%;
5) 5th - 10th year - 7%
6) 11th - 20th year - 5%
7) 21th year and above -3%

Would this be better?

Thanks,
Richard

[evergreen]

How is it double taxation? Developers are charged GST, but they dont "directly" charged GST to buyers. Dont think they absorbed GST, rather GST is included in the sales price.

So when we buy properties, we pay GST, when we sell, we receive GST. Those who are the end user have to bear the whole GST.

At the moment, the government only receives the GST in their pocket once from the developer.

[irisng]

Well, I've spoken to some MPs, unfortunately they are the ones NOT willing to pay capital gain tax. GST on food, etc is nothing to them.

Thanks,
Richard


:cheers1: :cheers1: :cheers1:

[devilplate]

SSD is bad. It kills the market activities, not good for economy.
Let me try to work out how SSD can be converted to CGT.
Let's assume price can go up net 20% in the 1st year (dream on). 16% SSD is equivalent to 16%/20% = 80% CGT.

So if SSD is removed, and introduce CGT

1) 1st year - 80%;
2) 2nd year - 60%;
3) 3rd year - 40%;
4) 4th year - 20%;
5) 5th - 10th year - 7%
6) 11th - 20th year - 5%
7) 21th year and above -3%

Would this be better?

Thanks,
Richard
u must remember cgt not fair to those investors or homeowners who buy n sell after many donkey yrs

3% cgt also alot bcoz px cud hf doubled or tripled or more!

If intro cgt, shd be zero after 5yrs to be in line wif hdb mop 5yrs

And i oredi mentioned.....how can govt remove ssd now? Whahahaha.....pls stop wasting ur time.....spend ur time on volunteering work better

[irisng]

I'm willing to pay CGT if we don't have to pay interest on the the amount that we 'borrow' from CPF to pay for our mortgage.

I'm alright to pay CGT up to 5%.

I'm speaking from the point of someone that doesn't have decades/years of accumulation of wealth and still depend on CPF to assist in paying their mortgage. (generally 80-90% of the population)

Any tax be it GST or CGT will be beneficial to the rich since necessities (such as your first and only home) is always a smaller portion of their disposable income for them.

If the idea is to help devise means to generate revenue for the government, my views are to reduce or remove GST or any tax like stamp duty for a basket of necessities such as rice, milk powder, cooking oil, bread, etc etc including your first home purchase while increasing personal income tax and the levy for the casinos (both for individual Singaporeans as well as for the casino itself).

Another way of increasing the revenue for the country is to cut the ministers/MP salary. If their salary are cut, that means that country expenses will reduce, but will anybody willing to offer a pay cut. Nobody will ever find that their money is already enough, if not there won't be so many rich people in this world.:2cents:

[richwang]

Good idea. How about changing SSD to CGT as follows?

1) 1st year - 80%;
2) 2nd year - 60%;
3) 3rd year - 40%;
4) 4th year - 20%;
5) 5th year - 10%;
6) More than 5 years - 0%

Thanks,
Richard

[irisng]

How is it double taxation? Developers are charged GST, but they dont "directly" charged GST to buyers. Dont think they absorbed GST, rather GST is included in the sales price.

So when we buy properties, we pay GST, when we sell, we receive GST. Those who are the end user have to bear the whole GST.

According to what I know, if it is a GST registered company, when the company purchases something with GST, they can claim back the GST from the GST dept, likewise if they sell with GST, they have to return this GST amount to the GST dept. Do not know whether does it apply to the developer or not?

[irisng]

SSD is bad. It kills the market activities, not good for economy.

Thanks,
Richard

At least it helps to control people from speculating, buy and place deposit, next min sell away, as long as you have the money for downpayment, you can already make profit. Alamat, why didn't I think of that last time before the SDD was introduced. Missed the big boat again.:doh:

[irisng]

I think the policy of paying back the amount we "borrow" from our own CPF is really stupid.
I agree we should remove GST for essentials. But it also means we need to impose tax or increase tax on something else. I suggest alcohol and tobacco products. Increase tax on winnings from betting and gambling. Increase tax on vice businesses such as KTV.

Yes, should increase tax on the unhealthy lifestyle.

[amk]

Richard if u missed my earlier post: what's your objective for the capital gain tax ? For the pty market only or for the economy as a whole ?

[august]

how about GST on properties?
already got stamp duty mah.

[august]

Richard if u missed my earlier post: what's your objective for the capital gain tax ? For the pty market only or for the economy as a whole ?
redistribution of wealth to tamper rising social disparity?

Spore removed estate duty in 2008. Perhaps shld bring it back and apply a progressive system especially to the top 1%. :p

[richwang]

http://forums.condosingapore.com/images/icons/favicon.gif Capital Gains Tax is good for the Rich
http://en.wikipedia.org/wiki/Capital_gains_tax

It is time to review whether 0% is the right percentage for Capital Gain tax in Singapore. It cannot be the pillar to be a financial center. Just look at New York, London and Tokyo (the only exception is Hong Kong which doesn't have local defense, nor GST).

With GST capped at 7% due to voters would refuse any increases, and the world enter into a low return cycle (everyone in this forum would know), we have to look into other sources of income.

If you pay the poor so low that they can only jump into reservoirs, which will pollute the water that rich need to drink.
If the number of poor people is getting bigger and bigger, landed properties will need to build higher and higher fence. That will impact the quality of the rich's life.

I am not the ultra rich, I am maybe the top 20%-30%. And I am happy to pay capital gain tax. (Remember, you only need to pay it when you MAKE MONEY for your investment.)

Why people are so greedy and not willing to share 3-7% of your NET GAIN?

Warren Buffett is complaining 15% capital gain tax is too low for him, he want to see that increased to 20%.

To be succeed is to do good for the society. That is pillar for the long term success for any society. Otherwise you will see all your wealth disappear in a social disturbance.

Why cannot we learn from the successful riches?

Thanks,
Richard
PS. I will welcome all your comments on this topic because I will have a chance to meet another senior government officer in 2 weeks. I want to sell this idea to the RICH.

http://forums.condosingapore.com/showthread.php?t=12285&page=106



http://forums.condosingapore.com/images/statusicon/user_online.gif http://forums.condosingapore.com/images/buttons/quote.gif (http://forums.condosingapore.com/newreply.php?do=newreply&p=201773)

[Allthepies]

SSD is bad. It kills the market activities, not good for economy.
Let me try to work out how SSD can be converted to CGT.
Let's assume price can go up net 20% in the 1st year (dream on). 16% SSD is equivalent to 16%/20% = 80% CGT.

So if SSD is removed, and introduce CGT

1) 1st year - 80%;
2) 2nd year - 60%;
3) 3rd year - 40%;
4) 4th year - 20%;
5) 5th - 10th year - 7%
6) 11th - 20th year - 5%
7) 21th year and above -3%

Would this be better?

Thanks,
Richard

My properties all not subjected to SSD, ha ha can don't sabo me :D

Though capital gain tax should apply to PR who make a gain on resale HDB and had no intention to become a citizen here.

[kane]

Richard if u missed my earlier post: what's your objective for the capital gain tax ? For the pty market only or for the economy as a whole ?

SSD is killing his business. CGT will at least allow for some business whilst the coffers get filled.

[devilplate]

SSD is killing his business. CGT will at least allow for some business whilst the coffers get filled.
u mean richwang is an agt?

[richwang]

Maybe it is too early to discuss, but let's say when property price comes down heavily, what will be the 1st cooling measure to go?

1) Reduced SSD;
2) LTV reduced from 40% to 30%;
3) Stop/reduce land sale;
4) Extend construction years;

If the price drops more than 30% and no market activities, will we see deferred payment come in again (I hope not, too much system risk).


Thanks,
Richard

[DC33_2008]

We have been contributing in so many ways: ERP, COE, etc. Why CGT?

[devilplate]

Maybe it is too early to discuss, but let's say when property price comes down heavily, what will be the 1st cooling measure to go?

1) Reduced SSD;
2) LTV reduced from 40% to 30%;
3) Stop/reduce land sale;
4) Extend construction years;

If the price drops more than 30% and no market activities, will we see deferred payment come in again (I hope not, too much system risk).


Thanks,
Richard
reduce land sale.....i oredi expecting nxt yr land sales to be reduced.....

Den mabe followed by removal of ssd and lastly ltv.

[devilplate]

We have been contributing in so many ways: ERP, COE, etc. Why CGT?
i actually dun mind having a progressive cgt in replacement of ssd.....and it will also remove the grey area of ppty trader definition

[richwang]

I am not a housing agent. My day job is financial risk management consultant - mainly mathematical calculations of derivatives.

Thanks,
Richard

[richwang]

If the CGT for 1st year is as high as 80%, will that encourage under table transaction to show flat gain?
80% is too much incentive to do that while 16% SSD is less incentive to under report transaction price.

Thanks,
Richard

[kane]

CGT is not effective to cool the market. As long as people can make a bit of money and there's negative real interest rate, people will be inventivised to take risk. You want a solution to fill coffers, then impose an increasing scale tax on households with multiple cars. Second car tax more, third car tax even more as long as that registered address has multiple cars regardless whether it's different family members owning it.

[maisonjai]

Is ur intention to generate more revenue from taxes? U already mentioned CGT will reduce activities.

Say Icon same unit up 20% each tx

w/o CGT, changed hands 5x = stamp duty 3% x 5.
with 3%SD + 5%CGT but only changed hands 2x = 3%SDx2 + 5%CGTx2

Which is better? Like what DP suggested would be better to drop the idea & leave SSD as it is. ;)

[sh]

why are we looking at introducing new taxes?:scared-5:

haven't we paid enough already.:mad:

What is the objective of CGT, for raising revenue?

There is budget surplus almost every year... so WHY?:beats-me-man:

If there's new a new tax, than some existing tax should be removed.....GST?

[evergreen]

If we invest and make losses, can we take back CGT we paid last year? Of course not. Imposing CGT reduces the potential benefit of investing. If people don't invest, the cost of borrowing will go up, home loan rates will go up, causing people to be even less likely to invest, and the cycle goes on.

[rattydrama]

when the last time capital gain tax was introduced, it essentially kills the market. Buyers are calculating how much provided they are able to make less the cgt if they have to sell a property...this will effect their decision as it crate resistant ad eventually transaction vol. will stagnant. the impact will be less transactions, less stamp duty collection...gst...property tax...lowe price for land sales...business to lawyers, banks etc... SSD will still encourage the market to move provided that you are willing to hold the ppty longer than 4 yrs..

[amk]

Richard if u missed my earlier post: what's your objective for the capital gain tax ? For the pty market only or for the economy as a whole ?

Richard one last time, what's your objective for capital gain tax ?

[richwang]

Has anyone paid 16% SSD, or heard of anyone paid 16% SSD? Is the market for that segment killed?

Thanks,
Richard

[richwang]

Anyone knows the CGT rate "last time in Singapore"? Was it too high?
I am still not convinced 0% is the optimal rate for Singapore economy or society.

Thanks,
Richard

[rattydrama]

Has anyone paid 16% SSD, or heard of anyone paid 16% SSD? Is the market for that segment killed?

Thanks,
Richard


16% SSD is introduced to crub speculators so at today's market condition, I dont think anyone pay for it but you are required to pay should u sell within the stipulated period.

[howgozit]

I guess this is the right group to ask this question. How much capital gain tax you are willing to pay?

1) 0%;
2) 3%;
3) 5%;
4) 7%;



I think Rich is suggesting that CGT in place of SSD would be a fairer measure to property owners.

I totally agree.

But I can't choose any of Richwang's options bcoz I think even up to 7% is too low a tax rate. China is 20% whilst South Korea is more than 30%.
Remember this is a capital gains tax and only the gains are taxed.
Btw Hong Kong also does not have CGT.


Anyone knows the CGT rate "last time in Singapore"? Was it too high?
I am still not convinced 0% is the optimal rate for Singapore economy or society

If I remember corrrectly, back in 1996 the CGT introduced was only applicable for properties bought after the implementation (somewhere in May'96). 100% for 1st year, 2/3 for 2nd year and 1/3 for 3rd year. The gains from the sale during this period is taxed as income.

This means that the tax rate is will vary according to the individual's tax bracket.

This is very fair for a variety of reasons
1. you make money, you pay
2. you don't make money, you don't pay
3. you are already very rich, you pay even more (higher tax bracket)

[evergreen]

I think Rich is suggesting that CGT in place of SSD would be a fairer measure...
This is very fair for a variety of reasons
1. you make money, you pay
2. you don't make money, you don't pay
3. you are already very rich, you pay even more (higher tax bracket)
.
Lets say you held the property for 5 years and then need to sell and buy a bigger place because you have children. You bought our old place at 1200 psf. You sold your old place at 1500 psf. then you bought the new place at 1500 psf. Did you actually make profit?

I doubt cgt will take into account the interest loan, inflation, interest to be paid back to cpf.

[howgozit]

.
Lets say you held the property for 5 years and then need to sell and buy a bigger place because you have children. You bought our old place at 1200 psf. You sold your old place at 1500 psf. then you bought the new place at 1500 psf. Did you actually make profit?

I doubt cgt will take into account the interest loan, inflation, interest to be paid back to cpf.

Yes it did.... the profit reckonable is nett profit.

You declared it in your income and if you did not declare nett than you have to pay up your own folly of overdeclaring.

Btw, accrued interest paid back to CPF is still your own money.

[howgozit]

.
Lets say you held the property for 5 years and then need to sell and buy a bigger place because you have children. You bought our old place at 1200 psf. You sold your old place at 1500 psf. then you bought the new place at 1500 psf. Did you actually make profit?

I doubt cgt will take into account the interest loan, inflation, interest to be paid back to cpf.

Yes you did....

[kane]

Richard one last time, what's your objective for capital gain tax ?

Ups for your question, I'm interested to hear his answer as well.

[richwang]

Here are some of my thoughts:

1) Moving forward, social stability should be the top priority of the rich
If you bother to look at history, you would notice the smart rich people tend to share their wealth. Otherwise they would loss a peaceful environment at best, and might loss their total wealth (plus their lives) at worst.

2) Singapore government might not be as rich as you thought;
I am sure many of us have noticed the slightly change of national accounting system. In the past, only real dividends can be used as government expenditures. (That's why Temasek related companies tend to pay high dividends.) Recently the rule has been changed to budget based on estimated returns. We all know how hard to get returns nowadays (zero is considered as very good). So the government could have over estimated and over spent.

3) New revenue source is a nature next step.
I hope we will not enter into a situation like US: on one hand refuse to raise tax, on the other hand, refuse to cut expense.

I know what I am proposing here has a negative financial impact to most of the people in this group. But let's hope it will improve your happiness index (by having a fairer society, more active economy and happier people surrounding you).

Once again, I find SSD silly. Maybe restoring CGT is better.

Thanks,
Richard

[samsara]

This is my take on Capital Gains Tax and its impact on Singapore:

a. Singapore is trying to attract the HNWI and UHNWI investors to not only just take up investment here but to also use this country as one of their investment bases. Without any natural resources, functioning as a financial centre and/or playground of the rich are perhaps the only ways we can continue to achieve the strong growth that we have had the last half a century. Our once-star position as a shipping port is rapidly dimming. The manufacturing industry here has one foot in the grave. There is a need for us to quickly re-invent ourselves in order to maintain relevance in the fast-moving world today.

b. present-day investors are highly mobile and have a wide reach. For an investor to shift his investment allocation away from any specific country is not a difficult task. There are many more established financial centres than us and it would not be hard to imagine investors switching camps when the going gets tough here in terms of regulatory or policy changes.

c. there are a few key reasons for the continued flow of investment to Singapore and all of them are tied to the growth story that Singapore continues to have. A pure-bred investor would never invest in a country that does not have a growth story. The endless development and enhancement of national infrastructure, establishing herself as a base for HNWI + UHNWI, creating avenues of enjoyment and entertainment for the wealthy - these help ensure that Singapore remains viable in a highly competitive global environment.

d. the wealth of a country is meaningful only when it is compared to that of another country. In the early days since independence, financial prudence (relative to what our immediate neighbours have demonstrated so far), a hardworking citizenry (at least during the early days), strong leadership (the team of LKY+GKS+TCC+etc were impeccable), opportunistic business acumen (to capitalise on our strengths over the last few decades) meant that we not only had a fighting chance of survival but actually managed to put ourselves on the global stage. As a result of that, our national wealth today is comparable to that of much larger nations.

e. the City State of Monaco bears some semblance of what we are trying to achieve. Our growth story today is likely closely blueprinted on that of Monaco. There is no CGT there; in fact they do not even have income tax (except for the French residents there). By not taxing the wealthy directly, Monaco has become a haven for the rich and ultra-rich, and like moths to light, they have flocked there to make it one of their holiday residence and contribute to the economy through indirect means e.g. gaming. There are many ways to skin the cat.

Should we incorporate CGT today, we would be effectively shooting ourselves in the foot. It would almost immediately nullify the efforts that we have been putting in to establish ourselves as an attractive investment base / financial centre / playground for the rich. The SSD in fact is also just a temporary measure incorporated to prevent the market from becoming too frothy/bubbly. Gradual, measured growth of property prices is healthy and is in fact necessary because it allows the citizenry to hedge against inflation (which in turn is an inevitable consequence of the flawed system of Fiat currency) and maintain its wealth relative to other countries.

Just my two cents worth.


Here are some of my thoughts:

1) Moving forward, social stability should be the top priority of the rich
If you bother to look at history, you would notice the smart rich people tend to share their wealth. Otherwise they would loss a peaceful environment at best, and might loss their total wealth (plus their lives) at worst.

2) Singapore government might not be as rich as you thought;
I am sure many of us have noticed the slightly change of national accounting system. In the past, only real dividends can be used as government expenditures. (That's why Temasek related companies tend to pay high dividends.) Recently the rule has been changed to budget based on estimated returns. We all know how hard to get returns nowadays (zero is considered as very good). So the government could have over estimated and over spent.

3) New revenue source is a nature next step.
I hope we will not enter into a situation like US: on one hand refuse to raise tax, on the other hand, refuse to cut expense.

I know what I am proposing here has a negative financial impact to most of the people in this group. But let's hope it will improve your happiness index (by having a fairer society, more active economy and happier people surrounding you).

Once again, I find SSD silly. Maybe restoring CGT is better.

Thanks,
Richard

[samsara]

Everyone has vested interests. The bull wants the market to always ascend. The bear wants the market to crash. The constant struggle between the bulls and the bears is what hurts the masses, the citizenry.

Is it better to live in an illusion of a bed of roses where prices continuously head up or is it better to live in amongst broken stones and rubble that is a result of shattered hopes and illusions?

Neither is real. When there is selfishness and self-centredness, there cannot be peace and harmony.


Ups for your question, I'm interested to hear his answer as well.

[howgozit]

Should we incorporate CGT today, we would be effectively shooting ourselves in the foot. It would almost immediately nullify the efforts that we have been putting in to establish ourselves as an attractive investment base / financial centre / playground for the rich. The SSD in fact is also just a temporary measure incorporated to prevent the market from becoming too frothy/bubbly. Gradual, measured growth of property prices is healthy and is in fact necessary because it allows the citizenry to hedge against inflation (which in turn is an inevitable consequence of the flawed system of Fiat currency) and maintain its wealth relative to other countries.

Just my two cents worth.

I think you have to re-read richwang's proposition again, it is CGT instead of SSD.
If your argument is pro-investment than all the more it should be CGT above SSD. CGT is only applicable if gains were made whereas SSD is regardless.

The way it was introduced in Singapore previously was also very fair bcoz it was valid for only sale within 3years of purchase. Why would we be shooting ourselves in the foot?

[kane]

Everyone has vested interests. The bull wants the market to always ascend. The bear wants the market to crash. The constant struggle between the bulls and the bears is what hurts the masses, the citizenry.

Is it better to live in an illusion of a bed of roses where prices continuously head up or is it better to live in amongst broken stones and rubble that is a result of shattered hopes and illusions?

Neither is real. When there is selfishness and self-centredness, there cannot be peace and harmony.

CGT is probably more useful for the bulls than the bears.

[devilplate]

I think you have to re-read richwang's proposition again, it is CGT instead of SSD.
If your argument is pro-investment than all the more it should be CGT above SSD. CGT is only applicable if gains were made whereas SSD is regardless.

The way it was introduced in Singapore previously was also very fair bcoz it was valid for only sale within 3years of purchase. Why would we be shooting ourselves in the foot?

u have my vote:D

SSD is definitely X10 more harsh den let say a progressive 3 to 5yrs CGT:doh:

y r we paying for a PRIVATE ppty and yet having a 3-4yrs MOP??!?!?!:doh:

and CGT intro in 97 did not crash the market la.....it coincides with the crisis mah den ppl especially the (opposition supporter??) push the blame to the ruling govt? hehehehe

[devilplate]

CGT is probably more useful for the bulls than the bears.

useful? dun have cgt and ssd bestest for bulls.....

90% ltv is vy useful for the bulls! LOL:p

[CCR]

The govt will not implement CGT as it will diminish SIN as an attractive free trade location. We are the strongest advocator of Free trade, hence we must walk the talk..

And CGT will prevent social mobility - upgrading or downgrading and bad for votes.

The govt doesnt need the money now, enough churn and revenue from property taxes, stamp duties, etc...

SSD is meant to curb speculation and it can be removed at anytime, if you implement CGT, you can't just implement it this year and remove it 3 years down the road...

It will reflect badly on the govt as sloppy policies implementation..

[devilplate]

SSD is meant to curb speculation and it can be removed at anytime, if you implement CGT, you can't just implement it this year and remove it 3 years down the road...

It will reflect badly on the govt as sloppy policies implementation..

y remove SSD not sloppy?

if govt intro 3yr CGT instead of 4yrs SSD in the first place? later on remove it if ppty px crash also considered sloppy?

[howgozit]

The govt will not implement CGT as it will diminish SIN as an attractive free trade location. We are the strongest advocator of Free trade, hence we must walk the talk..

And CGT will prevent social mobility - upgrading or downgrading and bad for votes.

The govt doesnt need the money now, enough churn and revenue from property taxes, stamp duties, etc...

SSD is meant to curb speculation and it can be removed at anytime, if you implement CGT, you can't just implement it this year and remove it 3 years down the road...

It will reflect badly on the govt as sloppy policies implementation..


Actually CGT is more pro-free trade than SSD. CGT is walking the talk. CGT is a capitalistic policy, you are only taxed when you make money unlike SSD.

Btw, CGT like SSD can be removed anytime. It was implemented in Singapore in May1996 and repealed in Oct2001.

Not only was it less punitive compared to the current SSD in terms of penalty rate, it also allowed more manoeuvrability for both upgraders and downgraders and those down on their luck speculators.

It was actually a good curb and measure by the government (credit to LHL) to deflate the property bubble. A year later in 1997 the property bubble popped with the Asian financial crisis, many people who had to force-sell were already in dire straits, imagine if they had to fork out SSD even when they lost half the value of their property....

[CCR]

good points.....

[kane]

I don't see what's wrong with the current SSD. It's kept the frothy exuberance out. Why should we. Adopt CGT and risk letting prices runaway further.

[avo7007]

imagine if they had to fork out SSD even when they lost half the value of their property....

IMHO SSD will distort the market's ability to self correct quickly during a slump. Fortunately SSD is something the government can repeal in a timely manner.

[Allthepies]

This is my take on Capital Gains Tax and its impact on Singapore:

a. Singapore is trying to attract the HNWI and UHNWI investors to not only just take up investment here but to also use this country as one of their investment bases. Without any natural resources, functioning as a financial centre and/or playground of the rich are perhaps the only ways we can continue to achieve the strong growth that we have had the last half a century. Our once-star position as a shipping port is rapidly dimming. The manufacturing industry here has one foot in the grave. There is a need for us to quickly re-invent ourselves in order to maintain relevance in the fast-moving world today.

b. present-day investors are highly mobile and have a wide reach. For an investor to shift his investment allocation away from any specific country is not a difficult task. There are many more established financial centres than us and it would not be hard to imagine investors switching camps when the going gets tough here in terms of regulatory or policy changes.

c. there are a few key reasons for the continued flow of investment to Singapore and all of them are tied to the growth story that Singapore continues to have. A pure-bred investor would never invest in a country that does not have a growth story. The endless development and enhancement of national infrastructure, establishing herself as a base for HNWI + UHNWI, creating avenues of enjoyment and entertainment for the wealthy - these help ensure that Singapore remains viable in a highly competitive global environment.

d. the wealth of a country is meaningful only when it is compared to that of another country. In the early days since independence, financial prudence (relative to what our immediate neighbours have demonstrated so far), a hardworking citizenry (at least during the early days), strong leadership (the team of LKY+GKS+TCC+etc were impeccable), opportunistic business acumen (to capitalise on our strengths over the last few decades) meant that we not only had a fighting chance of survival but actually managed to put ourselves on the global stage. As a result of that, our national wealth today is comparable to that of much larger nations.

e. the City State of Monaco bears some semblance of what we are trying to achieve. Our growth story today is likely closely blueprinted on that of Monaco. There is no CGT there; in fact they do not even have income tax (except for the French residents there). By not taxing the wealthy directly, Monaco has become a haven for the rich and ultra-rich, and like moths to light, they have flocked there to make it one of their holiday residence and contribute to the economy through indirect means e.g. gaming. There are many ways to skin the cat.

Should we incorporate CGT today, we would be effectively shooting ourselves in the foot. It would almost immediately nullify the efforts that we have been putting in to establish ourselves as an attractive investment base / financial centre / playground for the rich. The SSD in fact is also just a temporary measure incorporated to prevent the market from becoming too frothy/bubbly. Gradual, measured growth of property prices is healthy and is in fact necessary because it allows the citizenry to hedge against inflation (which in turn is an inevitable consequence of the flawed system of Fiat currency) and maintain its wealth relative to other countries.

Just my two cents worth.

i think u made a very valid argument :cheers1:

any measure the government have to make must actually encourage the rich to come and play here. when the rich come, the average and the poor will have bread to eat. by chasing away the rich, it actually make the masses poorer... the IR is one playground that has been created for them...

CGT may not be something that the foreign rich players like, if they don't like, we may want to think hard before implementing it. we wont want to kill the hens that lay the golden eggs.

[howgozit]

i think u made a very valid argument :cheers1:

any measure the government have to make must actually encourage the rich to come and play here. when the rich come, the average and the poor will have bread to eat. by chasing away the rich, it actually make the masses poorer... the IR is one playground that has been created for them...

CGT may not be something that the foreign rich players like, if they don't like, we may want to think hard before implementing it. we wont want to kill the hens that lay the golden eggs.

I think the rich much prefers the CGT than SSD.

Assuming both SSD and CGT is the same rate of 16%....if you have to sell (for whatever reasons) would you prefer to pay 16% of the profit or 16% of the sale price?

Illustration:
If you bought a $1m property that has gone up to $1.5M and decided to sell within a year, the nett profit is about $400k after deducting legal fee stamp duties, interests...etc.
1. SSD = $240k
2. CGT = $64k
Which would you rather pay?

Anyway.... I don't think we need to bother so much about the foreigners? why let them come here and make money from us and we not have any policy to tax them in return.

In any case, CGT is very acceptable in many countries. Below is a comparison

Capital Gains Taxes (%) - Singapore Compared to Continent

Descending Rank

Thailand (http://www.globalpropertyguide.com/Asia/Thailand) 37.00%
South Korea (http://www.globalpropertyguide.com/Asia/South-Korea) 35.00%
Philippines (http://www.globalpropertyguide.com/Asia/Philippines) 32.00%
India (http://www.globalpropertyguide.com/Asia/India)30.00%
Laos (http://www.globalpropertyguide.com/Asia/Laos) 25.00%
Vietnam (http://www.globalpropertyguide.com/Asia/Vietnam) 25.00%
Indonesia (http://www.globalpropertyguide.com/Asia/Indonesia) 20.00%
Taiwan (http://www.globalpropertyguide.com/Asia/Taiwan) 20.00%
China (http://www.globalpropertyguide.com/Asia/China) 20.00%
Cambodia (http://www.globalpropertyguide.com/Asia/Cambodia) 20.00%
Japan (http://www.globalpropertyguide.com/Asia/Japan)15.00%
Macau 12.00%
Sri Lanka (http://www.globalpropertyguide.com/Asia/Sri-Lanka) 0.00%
Singapore (http://www.globalpropertyguide.com/Asia/Singapore) 0.00%
Hong Kong (http://www.globalpropertyguide.com/Asia/Hong-Kong) 0.00%
Malaysia (http://www.globalpropertyguide.com/Asia/Malaysia)http://www.globalpropertyguide.com/template/assets/img/footnote_lblue.gif 0.00%

[howgozit]

IMHO SSD will distort the market's ability to self correct quickly during a slump. Fortunately SSD is something the government can repeal in a timely manner.

CGT can be repealed just as quickly(or slowly) as SSD... why should it be any different?

The 1996 CGT measure was abolished in Oct2001 following 9/11 (ie. Sep2001 in case anyone is wondering). Within a month, the government reacted swiftly recognising that it was probably the proverbial final nail in the "property speculation" coffin.

[DC33_2008]

Foreign investors are still coming in even with the SSD. This speaks for the Singapore's credential. :)
I think the rich much prefers the CGT than SSD.

Assuming both SSD and CGT is the same rate of 16%....if you have to sell (for whatever reasons) would you prefer to pay 16% of the profit or 16% of the sale price?

Illustration:
If you bought a $1m property that has gone up to $1.5M and decided to sell within a year, the nett profit is about $400k after deducting legal fee stamp duties, interests...etc.
1. SSD = $240k
2. CGT = $64k
Which would you rather pay?

Anyway.... I don't think we need to bother so much about the foreigners? why let them come here and make money from us and we not have any policy to tax them in return.

In any case, CGT is very acceptable in many countries. Below is a comparison

Capital Gains Taxes (%) - Singapore Compared to Continent

Descending Rank

Thailand (http://www.globalpropertyguide.com/Asia/Thailand)37.00%
South Korea (http://www.globalpropertyguide.com/Asia/South-Korea)35.00%
Philippines (http://www.globalpropertyguide.com/Asia/Philippines)32.00%
India (http://www.globalpropertyguide.com/Asia/India)30.00%
Laos (http://www.globalpropertyguide.com/Asia/Laos)25.00%
Vietnam (http://www.globalpropertyguide.com/Asia/Vietnam)25.00%
Indonesia (http://www.globalpropertyguide.com/Asia/Indonesia) 20.00%
Taiwan (http://www.globalpropertyguide.com/Asia/Taiwan)20.00%
China (http://www.globalpropertyguide.com/Asia/China)20.00%
Cambodia (http://www.globalpropertyguide.com/Asia/Cambodia)20.00%
Japan (http://www.globalpropertyguide.com/Asia/Japan)15.00%
Macau 12.00%
Sri Lanka (http://www.globalpropertyguide.com/Asia/Sri-Lanka)0.00%
Singapore (http://www.globalpropertyguide.com/Asia/Singapore)0.00%
Hong Kong (http://www.globalpropertyguide.com/Asia/Hong-Kong) 0.00%
Malaysia (http://www.globalpropertyguide.com/Asia/Malaysia)http://www.globalpropertyguide.com/template/assets/img/footnote_lblue.gif 0.00%

[howgozit]

Foreign investors are still coming in even with the SSD. This speaks for the Singapore's credential. :)

That's true...

Most people view property as a mid to long term investment and don't expect to sell so soon. The SSD is more of a "buggeration" on their exit strategy (should they need to exercise that option)

Truth is Singapore is still very attractive investment destination.

[Laguna]

Capital Gains Taxes (%) - Singapore Compared to Continent

Descending Rank

Singapore (http://www.globalpropertyguide.com/Asia/Singapore)0.00%
Hong Kong (http://www.globalpropertyguide.com/Asia/Hong-Kong) 0.00%
Malaysia (http://www.globalpropertyguide.com/Asia/Malaysia)http://www.globalpropertyguide.com/template/assets/img/footnote_lblue.gif 0.00%

Malaysia
5% within 5 years
but now changed to 10%

[avo7007]

CGT can be repealed just as quickly(or slowly) as SSD... why should it be any different?


I am talking about SSD exclusively, and not comparatively. My point is that SSD distort the market ability to self correct in a down market.

I am neutral to CGT. But if it designed to be progressively less the longer you hold the property it would be better.

[howgozit]

Malaysia
5% within 5 years
but now changed to 10%

My bad... thank you for the correction..

[howgozit]

I am talking about SSD exclusively, and not comparatively. My point is that SSD distort the market ability to self correct in a down market.

Agree, that is true.

I have come across a few local buyers who bought-in post CM for investments and are getting cold feet. Typically, if there are enough of such investors, this would be a trigger for a selldown.

But the SSD penalises too heavily for them to sell and as such they are holding on despite the discomfort of what they sense of the market. The market is therefore unable to move in the direction of their sentiment. This is a distortion of sorts.

The SSD has in turn produced an unexpected effect of preventing a downward spiral and holding on to the prices.... but for how long I am not sure...

[sh]

The SSD is imposed to stop people from flipping. If you're a long term investor, it does not affect you.

The same cannot be said for CGT.

As a long term investor, SSD is preferred anytime. That's what the government is trying to promote.... investment, not speculation.

[howgozit]

The SSD is imposed to stop people from flipping. If you're a long term investor, it does not affect you.

The same cannot be said for CGT.

As a long term investor, SSD is preferred anytime. That's what the government is trying to promote.... investment, not speculation.

I would think CGT is also prevents people from flipping. But certainly to a lesser extent than SSD.

The way it was implemented in 1996, ie. 100%,2/3 and 1/3 respectively for 1st, 2nd and 3rd year of sale also encourages long term investing.

What is different with a CGT is an option to sell at the same or lower price without having to suffer a further impact of SSD. This would provide for a healthy correction if things take a turn for the worst.

[devilplate]

The SSD is imposed to stop people from flipping. If you're a long term investor, it does not affect you.

The same cannot be said for CGT.

As a long term investor, SSD is preferred anytime. That's what the government is trying to promote.... investment, not speculation.
We r toking abt 3-5yr progressive cgt la

[sh]

Like that ah....

The one which 1 have to pay less lor.....:D

All boils down to the % tax is imposed for each option.

[howgozit]

Like that ah....

The one which 1 have to pay less lor.....:D

All boils down to the % tax is imposed for each option.

Chances are CGT is lower....Even if the % is the same for either.

Like I mentioned before, you are only taxed on your gain(profit) for CGT. unlike SSD which is the % of the sale price(regardless of profit or even loss)

[amk]

Btw, CGT like SSD can be removed anytime. It was implemented in Singapore in May1996 and repealed in Oct2001.

A tax partner will tell you, the singapore tax spirit is that, once a tax is removed / reduced, it will NOT be re-added back without serious considerations.

This is the stability we give to the world. That's why every tax policy is carefully implemented.

For example, estate duty was removed to encourage the ultra rich to move their assets and trusts here. It will not be added back.

The detail rationale posted by member Sam is very valid.

I'm disappointed at the OP , who does not seem to be receptive to the various opinions offered here at all.

[amk]

In a much broader context, "capital gain tax" by definition includes other capital gains too. SG explicitly make it 0 rated, for a specific reason as Sam mentioned.

For all intent and purpose, SSD works in cooling the pty market. There is totally no point to replace it with something far more controversial. This proposal is pointless.

More over, the argument of "why u cannot pay a bit more from your profit" just smells of socialism. This is not how this country works. Wealth redistribution is a far more complex subject. It all sounds so noble to "why can't the rich pay more". :cool:

[samsara]

SSD attacks both the demand and supply side of the equation. All variables being equitable, the nett position should not be biased to either end as it reduces both demand and supply simultaneously.

CGT, on the other hand, attacks the demand side of the equation, specifically demand that arises from an investment view-point (which in Singapore likely constitutes a significant percentage for both local and foreign purchasers). It increases the slope for positive returns from an investment and therefore dampens demand.

Thus, if one adopts a pro-investment stance, he would likely opt for SSD over CGT.

Having said this, the above is just a personal view-point as I am not an economist by training.


I think you have to re-read richwang's proposition again, it is CGT instead of SSD.
If your argument is pro-investment than all the more it should be CGT above SSD. CGT is only applicable if gains were made whereas SSD is regardless.

The way it was introduced in Singapore previously was also very fair bcoz it was valid for only sale within 3years of purchase. Why would we be shooting ourselves in the foot?

[devilplate]

Both bro amk and sam r really impressive

[howgozit]

A tax partner will tell you, the singapore tax spirit is that, once a tax is removed / reduced, it will NOT be re-added back without serious considerations.

This is the stability we give to the world. That's why every tax policy is carefully implemented.

For example, estate duty was removed to encourage the ultra rich to move their assets and trusts here. It will not be added back.

The detail rationale posted by member Sam is very valid.

I'm disappointed at the OP , who does not seem to be receptive to the various opinions offered here at all.

First of all, what I believe we are doing here is discussing only. I am merely offering my view. This is merely a discussion on the merits of either measure, and my view happens to leans towards CGT due to my personal experience of the 1996 CGT measure.

And from that experience, my personal view is that CGT enables a property owner/investor more room to manoeuvre. Whether local or foreign.

Of course I don't expect or desire for our government to be so flippant. Even if we ALL did agree that CGT is way to go, it ain't gonna happen tomorrow or maybe ever, certainly not from our little discussion here.

[howgozit]

In a much broader context, "capital gain tax" by definition includes other capital gains too. SG explicitly make it 0 rated, for a specific reason as Sam mentioned.

For all intent and purpose, SSD works in cooling the pty market. There is totally no point to replace it with something far more controversial. This proposal is pointless.

More over, the argument of "why u cannot pay a bit more from your profit" just smells of socialism. This is not how this country works. Wealth redistribution is a far more complex subject. It all sounds so noble to "why can't the rich pay more". :cool:

Haha... I on the other hand think "pay whether you make money or not" smacks of socialism.

Btw, what are you talking about?... CGT pay less than SSD.

I am all for capitalism, pro-investment...

[howgozit]

SSD attacks both the demand and supply side of the equation. All variables being equitable, the nett position should not be biased to either end as it reduces both demand and supply simultaneously.

CGT, on the other hand, attacks the demand side of the equation, specifically demand that arises from an investment view-point (which in Singapore likely constitutes a significant percentage for both local and foreign purchasers). It increases the slope for positive returns from an investment and therefore dampens demand.

Thus, if one adopts a pro-investment stance, he would likely opt for SSD over CGT.

Having said this, the above is just a personal view-point as I am not an economist by training.

I am sorry, I trying to understand your point. Can you explain to me again why you say an investor would opt for SSD over CGT?

Put simply, if I am an investor which policy would I favour, 1. or 2.

1. SSD - pay % of sale price regardless of profit/loss
or
2. CGT - pay % of profit only

[devilplate]

I am sorry, I trying to understand your point. Can you explain to me again why you say an investor would opt for SSD over CGT?

Put simply, if I am an investor which policy would I favour, 1. or 2.

1. SSD - pay % of sale price regardless of profit/loss
or
2. CGT - pay % of profit only
i believe both amk and sam tot we r toking about fixed cgt...but u r toking abt 3yr cgt.....

In general cgt vs ssd.....cgt sounds more harsh but when looking at the details....its simply crazy to have 16,12,8,4 ssd....whahaha.....its as gd as having 3yr mop....whahaha