ABSD Remission Deadline Extended to Up to 7 Years for Large En Bloc Redevelopments

Minister for National Development (MND) Chee Hong Tat said the move aimed to “set the right incentives” for developers to rejuvenate large estates and encourage more land intensification. Historically, large-scale redevelopments faced materially different execution, construction and sales risks compared with “conventionally-sized” residential projects, yet were subject to the same five-year ABSD deadline.

Leonard Tay, Knight Frank head of research, described the move as “a long time coming”. The Real Estate Developers’ Association of Singapore (REDAS) likewise noted that the “recalibration” of the ABSD regime was timely, necessary and appropriate, to reflect the realities of large-scale en bloc redevelopments.

“It is only logical that a sense of proportion-to-scale should be adopted into the policy, so that differences in size are recognised on a realistic and practical level,” Tay said.

While the extension is welcomed, property players caution it may not trigger a broad resurgence in en bloc activity. Realion Group chief executive Desmond Sim saw the move as providing reprieve for developers but said the ABSD remission deadline was “a band-aid that needs to be ripped off but is now being slowly pulled back”.

The largest obstacle, especially for massive sites carrying billion-dollar price tags, remains the asking price. Sim cautioned that the extension of the deadline might have the unintended effect of leading owners to stick to their positions on pricing.

Wong Shanting, Newmark’s head of research, noted that the revision “does not fundamentally alter project economics” and may not trigger a broad resurgence in en bloc activity. However, extending the ABSD sales timeline should reduce the “size disadvantage” associated with such sites and reopen the window for older projects in need of renewal.

The government has also introduced a new “super-large collective sale site” category for projects with at least 1,400 units and a minimum 1.5 times the unit count of the original development. These projects will get seven years for the ABSD remission, with the condition that at least 50 per cent of units must be sold within six years.

Under the current rules, residential developers purchasing land (including GLS and collective sale sites) pay 40 per cent ABSD, of which 35 per cent can be remitted if all conditions are met. For non-large collective sale sites, the five-year construction and sale deadline remains unchanged.

Huttons’ head of research Lee Sze Teck said the measures would help promote more en bloc activity but cautioned that pricing remains the biggest hurdle. “Developers recognise they are not just competing against other en bloc sites and the GLS programme. The significant closing of the gap in expectations is critical to helping more collective sales succeed.”