The purchase costs of new-build prime homes sold to foreign buyers in Singapore were ranked second-highest in the world, according to a Knight Frank study.
The Global Development Insights Q2 2013 report compares the fees and costs of buying new prime residential properties across global residential markets. The residential purchase costs include stamp duty, legal costs, as well as transfer and agency fees. The report also looks into annual costs of ownership for such homes, including wealth taxes, council or municipal taxes and property taxes.
In the global comparative ranking, Hong Kong and Singapore emerged as two markets with the highest purchase costs due to increased property taxes, after their respective governments introduced measures to cool the housing markets.
“Hong Kong is the most expensive location to buy a home, once all the associated costs have been factored in. Non-residents can expect to pay 25 percent on top of the purchase price when buying a US$3 million (S$3.78 million) home. The bulk of this consists of stamp duty costs and a property tax levied on foreign non-permanent residents,” the report said.
In Singapore, foreign buyers pay purchase costs of 19.3 percent. They are charged 18 percent in stamp duty which is the highest globally, following a hike in January to curb price growth - 15 percent additional buyer's stamp duty plus the standard rate of around three percent.
Other markets with the top highest purchase costs are London (7.9 percent), Sydney (7.2 percent), and Bahamas (6.5 percent).
As for annual costs, Singapore landed in 10th spot while Hong Kong was number 14. New York, Bahamas, Miami, Barbados and Moscow were found to have the top five highest annual costs globally.
“Buyers need to be mindful of the taxes and charges they face when buying a property, especially given recent interventions by governments,” said Knight Frank.
Romesh Navaratnarajah, Senior Editor at PropertyGuru, wrote this story. To contact him about this or other stories email email@example.com