Meet Rental Demand by Letting Developers Keep Some Condo Units Without Hefty Penalties
In an opinion piece, Leslie Yee examines how Singapore’s Additional Buyer’s Stamp Duty (ABSD) structure affects housing supply and proposes allowing developers to retain a small percentage of condo units for long-term leasing without triggering ABSD clawback. With Employment Pass holders surging 15 per cent to over 203,000 since 2020 and rental market pressures mounting, the column argues for a targeted policy tweak to address supply gaps.
EP Holders (2026)
EP Growth Since 2020
Proposed Hold Period
Clawback Relief
The Rental Supply Gap
Yee notes the surge in Employment Pass holders, which has grown 15 per cent to over 203,000 since 2020, and the corresponding rental market pressures reflected in recent URA rental indices. The influx of foreign professionals has driven sustained demand for rental accommodation, but the supply side has not kept pace.
The government’s 2023 initiative to introduce long-stay serviced apartments with extended minimum stays has had limited success. Developers have shown limited enthusiasm, evidenced by several recent Government Land Sales site launches that either drew no bids or failed to meet reserve prices.
The Proposal: Retain Units for Long-Term Leasing
Yee proposes allowing developers to retain a small percentage of completed condo units for long-term leasing without triggering the ABSD clawback, provided they hold these units for at least a decade. Under current rules, developers face steep ABSD penalties if they do not sell all units within a specified timeframe.
The arrangement would give developers recurring rental income while still enabling them to earn trading profits from selling the remaining units. Additionally, it would create a stronger incentive for developers to maintain quality and retain control over management, as they would have a direct stake in the long-term upkeep of the development.
Frequently Asked Questions
What is the ABSD clawback for developers?
Developers in Singapore face Additional Buyer’s Stamp Duty penalties if they do not sell all completed condo units within a specified timeframe. This discourages developers from holding back units, even when doing so could serve rental market needs.
Why has rental demand surged?
Employment Pass holders have grown 15 per cent to over 203,000 since 2020. This influx of foreign professionals, combined with limited new rental supply, has driven persistent upward pressure on rents reflected in URA indices.
What is the proposed solution?
The opinion piece suggests allowing developers to retain a small percentage of units for long-term leasing without ABSD clawback, provided they hold the units for at least a decade. This would provide recurring income for developers while addressing rental supply gaps.
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