COVID-19: Temporary relief measures for property developers affected by disruptions

COVID-19: Temporary relief measures for property developers affected by disruptions

Construction site Singapore circuit breaker
A view of a deserted construction site in Singapore on Apr 20, 2020. (Photo: AFP/Roslan Rahman)

SINGAPORE: Temporary relief measures have been announced for property developers affected by the COVID-19 pandemic and the "circuit breaker" period, the Government announced on Wednesday (May 6).

The relief measures aim to help property developers and individuals affected by the disruptions to construction timelines and sales of housing unit as a result of the pandemic.

"The Government will continue to ensure that prices for private residential properties remain broadly consistent with economic fundamentals," said a joint press release by the Ministry of National Development, Ministry of Finance, Ministry of Law and Ministry of Trade and Industry.

"Hence, these temporary relief measures do not alter the other existing residential property market cooling measures."

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PROJECT COMPLETION PERIOD EXTENDED

The Project Completion Period (PCP) for qualifying residential development projects on Government sale sites will be extended by six months.

This includes land that was directly alienated or had their lease renewed by the Singapore Land Authority (SLA).

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To qualify for the extension, the land has had to be awarded, directly alienated or had their lease renewed by SLA on or before Jun 1 2020, with the original timeline for the project to be completed on or after Feb 1, 2020.

No application is necessary, as eligible developers will be notified by the respective agencies. 

ADDITIONAL BUYER’S STAMP DUTY (ABSD)

The temporary relief measures extend the specified commencement, completion and sale timelines by six months for qualifying residential property developments.

Under the ABSD regime, developers have to start and complete the residential development, and also sell all units within specified timeline. If they do not do so, they will be subject to the ABSD on the purchase of the land. 

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To qualify for the extension of specified timelines for both commencement and completion of residential developments, the land has to be purchased on or before Jun 1, 2020; and the respective original timelines for commencement, completion and sale of housing units in a residential development has to expire on or after Feb 1, 2020.

No application is necessary, as eligible developers will be granted the extension automatically.

Ms Christine Li, head of research at Cushman and Wakefield, said the relief measures are "definitely timely and very generous".

"This will give developers, especially the large developments some reprieve as some already have challenges meeting the five-year ABSD remission deadline," she said.

"The impact on developments that will hit the ABSD and PCP deadline for 2020 is quite minimum. This is because according to our calculation, only about 30 over units remain unsold across five projects. Even without the extension, I believe these developers have ways to clear the unsold stock in time to meet the deadline."

QUALIFYING CERTIFICATE (QC) REGIME

Under the temporary relief measures, developers applying to extend their existing completion and/or disposal deadline will be granted a waiver of extension charges of up to 6 months. 

This will also apply to other SLA approvals requiring the completion and sale of all units in the residential development.

Under the QC regime, developers subject to the QC rules have to complete construction of all housing units in a residential development project within five years from the date of issue of the QC or the collective sale order, and dispose of all housing units within two years from the issue of a Temporary Occupation Permit or a Certificate of Statutory Completion.

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To qualify for the waiver of extension charges, the QC or SLA approval requiring the completion and sale of all units in the residential development has to be issued on or before Jun 1, 2020, with the original timeline for completion and sale of units in the residential development expiring on or after Feb 1, 2020.

Eligible developers can write to SLA’s Land Dealings Approval Unit (LDAU) at SLA_LDU@sla.gov.sg by Dec 1, 2020 to apply.

COMMERCIAL AND INDUSTRIAL DEVELOPMENT PROJECTS

The PCP for qualifying commercial and industrial development projects on Government sale sites, or on land which was directly alienated or had their lease renewed by the Singapore Land Authority (SLA), will be extended by six months. 

To qualify for the extension, the land has to be awarded, directly alienated or had their lease renewed by SLA on or before Jun 1 2020, with the original timeline for completion of the project expiring on or after Feb 1, 2020.

No application is necessary, as eligible developers will be notified by the respective agencies.

Ms Li said: "Even when things start to re-open, we also expect social distancing measures to continue affecting the show flat activities and buyers sentiment in view of the bleak climate in the whole global economy. 

"We are of the view that the extension should not be a one-off measure, as COVID-19 continues to evolve with the potential second and subsequent waves or even lockdowns in the foreseeable future."

The Real Estate Developers' Association of Singapore (REDAS) said it welcomes the Government's "pragmatic decision" to extend temporary relief measures for property developers.

"The Government’s proactive spirit of collaboration and support also abodes confidence for the real estate industry and help mitigate the impact on the construction sector," REDAS said. 

"Given that the COVID-19 battle is still very volatile and likely to be long-drawn and coupled with major disruptions and economic fall-out both in Singapore and globally, we hope the Government will continue to monitor the situation closely and provide flexibility to assist the built environment sector return to normalcy."

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Source: CNA/ic(mi)

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