Are present cashback given by Developers illegal?

[lufu]

after CM5, developer started giving cash back and discount. e.g.

FEO gives 2-3% furniture voucher. It fact there is no voucher to speak of, this is a cash cheque given to buyer without affecting Caveat price. For some developer, this is done after 20% payment upon exercising S&P while FEO only payout upon TOP. There are various developers doing this. All giving "under table" cash back.

Keppel at Luxurie is giving 1% "furniture voucher"
CK is giving $68,800 "furniture voucher" aka cash back.

All these done without affecting caveat price and earlier buyer will still think they got a good deal. e.g. Those bought just right before CM5. While actually those who bought after CM5 are the ones laughing.

and if buyer don't declare their "furniture voucher" they're actually withdrawing more money out of their CPF or bank loan. Of course now there could be more waiting for CM6 to come. Developer just had to squeeze their margin to continue enticing buyer if demand dip after CM.

Over the course of time, if MAS or URA don't put a stop to this cashback thing, Caveat price can no longer be trusted.

[rattydrama]

under mas regulation all cash back has to be declared if one is getting a discount base on the inked price, no exception. However, i agree that current practice distorts caveat price..I know minton is practicing this as well long time back. In the past it was 1.5% discount...now it is like more and more projects are doing it.

[lufu]

under mas regulation all cash back has to be declared if one is getting a discount base on the inked price, no exception. However, i agree that current practice distorts caveat price..I know minton is practicing this as well long time back. In the past it was 1.5% discount...now it is like more and more projects are doing it.

so it's not illegal for Developer to do this? No regulation or law against Developers giving cashback to distort Caveat price and possibly misleading buyers?


onus on buyer to declare.

[rattydrama]

so it's not illegal for Developer to do this? No regulation or law against Developers giving cashback to distort Caveat price and possibly misleading buyers?


onus on buyer to declare.

developer can do it so long as you declared. The developer will not try to go against the law so they will ask the buyer to declare.

Bank will loan you based on the lower value.

As for ceveat, ...no one is saying anything right now from what I understand. maybe someone here could share if they know.

[Arcachon]

Those who use the URA caveat lodge to make the property decision should read the T&C (http://www.ura.gov.sg/realEstateWeb/...s/misc/T&C.jsp)

Season player take it with a pinch of salt.

By using these eServices, I understand and agree that -

a) URA does not warrant the completeness, correctness or accuracy of any information provided on the eServices;

b) information on the eServices is provided for general information only and is not intended to be used or relied on by anyone for any purpose (whether commercial or otherwise), including any decision to enter into any transaction for sale or purchase of any property;

[jwong71]

after CM5, developer started giving cash back and discount. e.g.

FEO gives 2-3% furniture voucher. It fact there is no voucher to speak of, this is a cash cheque given to buyer without affecting Caveat price. For some developer, this is done after 20% payment upon exercising S&P while FEO only payout upon TOP. There are various developers doing this. All giving "under table" cash back.

Keppel at Luxurie is giving 1% "furniture voucher"
CK is giving $68,800 "furniture voucher" aka cash back.

All these done without affecting caveat price and earlier buyer will still think they got a good deal. e.g. Those bought just right before CM5. While actually those who bought after CM5 are the ones laughing.

and if buyer don't declare their "furniture voucher" they're actually withdrawing more money out of their CPF or bank loan. Of course now there could be more waiting for CM6 to come. Developer just had to squeeze their margin to continue enticing buyer if demand dip after CM.

Over the course of time, if MAS or URA don't put a stop to this cashback thing, Caveat price can no longer be trusted.

if not mistaken, i remember a frd's army regular frd bought a unit at mountbatten suites, lodged caveat etc 1mio but actual sold price to him is much lower.

his story is shared 1-2 years ago, at simpang bedok kopi session

[bargain hunter]

MAS should fine all these developers for their illegal cash back schemes.

[Arcachon]

MAS should fine all these developers for their illegal cash back schemes.

MAS need to keep a few bullet (CM) like MND else game over.

[DC33_2008]

Buyer already lose by paying stamp fee based on the purchase price (w/o discount). Is cash back by developer considered as expenses and can be tax deductible. Developer will gain.

after CM5, developer started giving cash back and discount. e.g.

FEO gives 2-3% furniture voucher. It fact there is no voucher to speak of, this is a cash cheque given to buyer without affecting Caveat price. For some developer, this is done after 20% payment upon exercising S&P while FEO only payout upon TOP. There are various developers doing this. All giving "under table" cash back.

Keppel at Luxurie is giving 1% "furniture voucher"
CK is giving $68,800 "furniture voucher" aka cash back.

All these done without affecting caveat price and earlier buyer will still think they got a good deal. e.g. Those bought just right before CM5. While actually those who bought after CM5 are the ones laughing.

and if buyer don't declare their "furniture voucher" they're actually withdrawing more money out of their CPF or bank loan. Of course now there could be more waiting for CM6 to come. Developer just had to squeeze their margin to continue enticing buyer if demand dip after CM.

Over the course of time, if MAS or URA don't put a stop to this cashback thing, Caveat price can no longer be trusted.

[lufu]

Buyer already lose by paying stamp fee based on the purchase price (w/o discount). Is cash back by developer considered as expenses and can be tax deductible. Developer will gain.

True. 3% stamp duty is based on the higher Caveat price in S&P.

After CM, Developer give $68,800 cash back. price actually drop quite a bit however buyer still end up paying more stamp duty.

but I suppose it's good for developer as they can drop price without previous buyers feeling the pinch

[yaozong7]

If assuming your stamp duty is paid for via CPF, isnt the developer indirectly helping buyers to cash out their CPF if they reimburse stamp duty via cash cheque? I asked the agent, but he was not sure. Haha.

[price]

If assuming your stamp duty is paid for via CPF, isnt the developer indirectly helping buyers to cash out their CPF if they reimburse stamp duty via cash cheque? I asked the agent, but he was not sure. Haha.

Aiyo the SD difference is not a lot lar -.-

e.g.: SD rebates 3% on a $2mil property = $54,600

"Extra SD paid" = $1,638

How much can developer help u milk from ur CPF?

$2mil property only 1.6k difference.


Even if developer gives u $100k cash back, the "extra SD" is only 3k on this 2mil property

If u purchase anything below 1mil, the number will be so small

[yaozong7]

Aiyo the SD difference is not a lot lar -.-

e.g.: SD rebates 3% on a $2mil property = $54,600

"Extra SD paid" = $1,638

How much can developer help u milk from ur CPF?

$2mil property only 1.6k difference.


Even if developer gives u $100k cash back, the "extra SD" is only 3k on this 2mil property

If u purchase anything below 1mil, the number will be so small

Huh, what if the property is say $1m leh? Stamp duty on $1m is, say $30k? If the entire stamp duty is paid for via CPF, developer help u to cash out $30k! Correct?

[price]

Huh, what if the property is say $1m leh? Stamp duty on $1m is, say $30k? If the entire stamp duty is paid for via CPF, developer help u to cash out $30k! Correct?

-.- u talking about the difference in SD paid being the actual price VS caveat lodged right?

if Caveat is lodged at gross price (before SD rebate) SD on $1mil property = $24.6k

if calculation made on actual after discount/SD rebate price, SD on $975,400 = $23.862

Difference = $738. Is this really significant to u? If really u really need to reduce this much of CPF, why don't you take less loan (assuming u have enough CPF to cover beyond 15% + 3% SD) and pay the remaining 80% with ur CPF?

[yaozong7]

-.- u talking about the difference in SD paid being the actual price VS caveat lodged right?

if Caveat is lodged at gross price (before SD rebate) SD on $1mil property = $24.6k

if calculation made on actual after discount/SD rebate price, SD on $975,400 = $23.862

Difference = $738. Is this really significant to u? If really u really need to reduce this much of CPF, why don't you take less loan (assuming u have enough CPF to cover beyond 15% + 3% SD) and pay the remaining 80% with ur CPF?

Oh, I am not talking abt the difference in price vs caveat. I am talking about the scheme being an indirect & illegal way to cash out the CPF money. Assuming for a $1m property, I have $180K (CPF) and $50K (cash).

I pay 15% CPF ($150K), and 3% stamp duty (via $30K CPF), and 5% cash ($50K). Developer gives me $30K cash-back. Overall, my cash outlay then becomes only $20k for a $1m property or 2% of purchase price. And the developer just helped me to cash out $30k in CPF!

[price]

Oh, I am not talking abt the difference in price vs caveat. I am talking about the scheme being an indirect & illegal way to cash out the CPF money. Assuming for a $1m property, I have $180K (CPF) and $50K (cash).

I pay 15% CPF ($150K), and 3% stamp duty (via $30K CPF), and 5% cash ($50K). Developer gives me $30K cash-back. Overall, my cash outlay then becomes only $20k for a $1m property or 2% of purchase price. And the developer just helped me to cash out $30k in CPF!

Yes but, bankers will be chasing you down for the difference. They will not be lending you 80% on the price before discount. Hence ur 30k Cash will be given to them for your next 10% payment (after foundation).

If you do not declare your discounts/rebates at the Lawyers (when signing S&P) / Bankers you risk paying bank charges and other fees when they review your loan. This will be treated as refinancing and your freebies like Lawyer fees etc. can/may be clawed back.

Basically you can't borrow your own money in "future" for current cash.

Same trick used by car agents in the past when you "borrow higher" than ur actual purchase price. Hence no need to fork out cash when you do a trade-in or so. You're simply borrowing your future money with interest to use it now.

[yaozong7]

Yes but, bankers will be chasing you down for the difference. They will not be lending you 80% on the price before discount. Hence ur 30k Cash will be given to them for your next 10% payment (after foundation).

If you do not declare your discounts/rebates at the Lawyers (when signing S&P) / Bankers you risk paying bank charges and other fees when they review your loan. This will be treated as refinancing and your freebies like Lawyer fees etc. can/may be clawed back.

Basically you can't borrow your own money in "future" for current cash.

Same trick used by car agents in the past when you "borrow higher" than ur actual purchase price. Hence no need to fork out cash when you do a trade-in or so. You're simply borrowing your future money with interest to use it now.

Ah I see..... You are saying that the bank is willing to lend only $776k (80% of $970k) instead of $800K (80% of $1m). So it doesnt make much of a difference (only $6k), unless the buyer dont declare.

If buyer dont declare, he can potentially speculate using only 2% cash though.....haha

[price]

Ah I see..... You are saying that the bank is willing to lend only $776k (80% of $970k) instead of $800K (80% of $1m). So it doesnt make much of a difference (only $6k), unless the buyer dont declare.

If buyer dont declare, he can potentially speculate using only 2% cash though.....haha

Yep,

[focus]

Wa..so now new launch.. no 20% discount cannot buy!.

[lufu]

Wa..so now new launch.. no 20% discount cannot buy!.

Anyway all prices are marked up and then discounted

[chiaberry]

The winners are the developers....that they can find carrot-heads willing to commit through marketing gimmicks like "discount" and "cash back".

[price]

The winners are the developers....that they can find carrot-heads willing to commit through marketing gimmicks like "discount" and "cash back".

Hahaha, but this is their business. I'd do the same too! maximise profit!

[teddybear]

And developers helping buyers to get higher loan quantum too, never mind that we are already scratching our head how the bank can match the super-super high valuation like WaterTown at average $1350 psf when nearby resale private properties are transacted at $1000 psf?

It is true that:
1) MND tolerated super high resale HDB prices?
2) MND tolerated super high new launch private properties?
3) MND tolerated all the under-table un-declared cash-rebates, furniture vouchers, etc etc?

Otherwise why no cooling measures to effective deal with these? All other cooling measures don't seem to have any effect? Either the previous cooling measures are failure to resolve above problems or they are designed not to solve above problems? Either reasons are like

The winners are the developers....that they can find carrot-heads willing to commit through marketing gimmicks like "discount" and "cash back".

[EBD]

$1350 psf for Pungol! Wow - sucker born every minute.

For very little more can get freehold D9 resale. Maybe 20 yrs old but location location location - far superior.

However I guess they can't get the same amount of loan for resale as they can from a developer who is flouting CM, ahem, helping first time private property owners.

Once the interest rate starts to increase, which probably not anytime soon but inevitably will, plenty people going to be in for the ride of their lives.

[insigina]

And developers helping buyers to get higher loan quantum too, never mind that we are already scratching our head how the bank can match the super-super high valuation like WaterTown at average $1350 psf when nearby resale private properties are transacted at $1000 psf?

It is true that:
1) MND tolerated super high resale HDB prices?
2) MND tolerated super high new launch private properties?
3) MND tolerated all the under-table un-declared cash-rebates, furniture vouchers, etc etc?

Otherwise why no cooling measures to effective deal with these? All other cooling measures don't seem to have any effect? Either the previous
cooling measures are failure to resolve above problems or they are designed not to solve above problems? Either reasons are like

It only shows the minds of policy makers are very different from those running commercial entities. The latter must be savvy to survive and it shows.

[price]

$1350 psf for Pungol! Wow - sucker born every minute.

For very little more can get freehold D9 resale. Maybe 20 yrs old but location location location - far superior.

However I guess they can't get the same amount of loan for resale as they can from a developer who is flouting CM, ahem, helping first time private property owners.

Once the interest rate starts to increase, which probably not anytime soon but inevitably will, plenty people going to be in for the ride of their lives.

D9 u dont get a Venice waterway nor Megamall below ur condo! But still i do agree that it's overpriced

[carbuncle]

And developers helping buyers to get higher loan quantum too, never mind that we are already scratching our head how the bank can match the super-super high valuation like WaterTown at average $1350 psf when nearby resale private properties are transacted at $1000 psf?

It is true that:
1) MND tolerated super high resale HDB prices?
2) MND tolerated super high new launch private properties?
3) MND tolerated all the under-table un-declared cash-rebates, furniture vouchers, etc etc?

Otherwise why no cooling measures to effective deal with these? All other cooling measures don't seem to have any effect? Either the previous cooling measures are failure to resolve above problems or they are designed not to solve above problems? Either reasons are like

One word can explain all these. Clout.

[yaozong7]

D9 u dont get a Venice waterway nor Megamall below ur condo! But still i do agree that it's overpriced

Venice waterway? Haha, tot it resembles a big longkang?? Even my fengshui master said the waterway's crap..... ATT much more value for money at virtually the same location.....

[price]

Venice waterway? Haha, tot it resembles a big longkang?? Even my fengshui master said the waterway's crap..... ATT much more value for money at virtually the same location.....

hahaha but thats what FEO agents call it. Venice of Singapore.