No Resale Levy For Second-Timers Buying ECs

Source : The Business Times, November 21, 2007

NEW executive condominiums (ECs) will be even more attractive now that the resale levy is no longer payable.

The Housing and Development Board imposes the levy on those who sell their first flat to buy another from the board. It is a fixed sum that ranges from $15,000 to $50,000 according to flat type, and $55,000 for ECs.

In a statement yesterday, HDB said: 'To align the purchase of new ECs with the Design, Build and Sell Scheme (DBSS), second-timers buying a new EC unit from the developer will no longer have to pay the resale levy.'

HDB also said that previously, first-timers who bought new ECs were barred from buying another new EC, HDB or DBSS flat. This bar has now been lifted.

PropNex CEO Mohamed Ismail believes the change will give 'greater incentive' to HDB dwellers who aspire to a condominium lifestyle by way of an EC.

Mr Ismail reckons the dropping of the resale levy, coupled with rising HDB resale flat prices, could leave some second-time buyers with up to $100,000 to add to their housing budget, depending on the size of the flat they sell.

He also believes developers could be encouraged to bid for EC sites, as demand will grow.

The government has said it intends to release more EC sites.

The first to be released, after a gap of more than three years since the last EC site was sold in 2004, will be at Punggol Road/Punggol Field.

The 2.27ha site with a plot ratio of 3.0 was put on the reserve list of the Government Land Sales Programme yesterday. And with the dropping of the resale levy, consultants expect interest in the site to increase.

Cushman & Wakefield managing director Donald Han says the last EC site at Woodlands, where La Casa now stands, was sold for $150 per sq ft per plot ratio (psf ppr). Since then, two DBSS sites - launched at Tampines in October 2005 and Boon Keng Road in March 2007 - sold for $114 psf ppr and $234 psf ppr respectively.

Mr Han says EC sites typically fetch more than DBSS sites. And based on the last DBSS site price at Boon Keng Road, but factoring in Punggol's location and EC site status, he expects the Punggol EC site to fetch $190-$220 psf ppr.

'We expect strong interest from developers and contractors for this site due to revival of HDB market activity and recent price increases - supported mainly by HDB upgraders and new home buyers,' he said.

'In addition, the government has committed its resources to turning Punggol into a major waterfront township and Punggol itself has been a news focal point lately.'