Taxman may give sellers more time to pay
Tampines Court home owners struggling to pay seller's stamp duty
The taxman is said to be giving home owners at Tampines Court more time to pay hefty sums in seller's stamp duty (SSD).
The 560-unit property was sold last month for $970 million in the second largest collective sale in dollar terms in a decade.
Some sellers are struggling to come up with cash for the SSD - as much as $277,000 in some cases - and might need to wait until the developer pays them.
It is believed that as many as 49 home owners are affected. They owe between $68,000 and $277,000 in SSD after the sales and purchase agreement was struck with developer Sim Lian, sources told The Straits Times.
Payment was due on Sept 5, within 14 days of the contract for sale of the development to the developer.
Iras issued a statement that did not directly address the Tampines Court case.
It told The Straits Times penalties would generally apply if payments were late.
"Iras recognises that the collective sale may be subject to the Strata Titles Board's or the court's approval... However, we are prepared to consider requests to waive the penalty incurred up to the date of the sales order, provided that the said contract is stamped within 14 days from the date of execution."
The sales order is granted upon approval of the collective sale by the Strata Titles Board and, if necessary, the High Court.
The SSD for residential properties was introduced in 2010 to discourage speculative buying - a minor issue given the recent property downturn but industry observers say more requests for deferment are expected given a sharp uptick in collective sales launched since last year.
"In 2011, there were some collective sales in prime districts 9, 10 and 15, but SSD didn't emerge as a main concern because most of the owners there could probably afford to make the payments. But the average Tampines Court owner... may not have the cash to pay SSD and need to rely on proceeds from the sale," said Dr Lee Nai Jia, head of research at Edmund Tie and Company.
A Tampines Court home owner who wanted to be known as Mr Pillay told The Straits Times he owed about $200,000 in SSD as he has been living there for only a year.
"I am happy that Iras was supportive and allowed a waiver of the penalty on SSD and our payment to be deferred until the sales order... We are hoping that Iras will grant a further extension on SSD payment until we get paid by the developer."