Government's Stand on Developers Offering Two-year Deferment Schemes to Home Buyers

28 Mr Zainal Sapari asked the Minister for National Development (a) what is the Ministry's position on developers who offer two-year deferments to prospective buyers; (b) whether the buyer and seller stamp duty will be based on the date of signing the Option-to-Purchase obtained earlier under the two-year deferment plan or on the date of signing the Sale and Purchase Agreement; and (c) whether developers are required to pay stamp duty for unsold units after five years even after an Option-To-Purchase has been obtained but a Sale and Purchase Agreement has not been executed yet.

Mr Lawrence Wong: Since October 2007, the Government has disallowed deferred payment schemes for uncompleted private residential properties. So deferred payment schemes are only applicable for completed private residential developments. As with any property transaction, buyers should exercise due diligence and prudence before committing to a purchase under such a scheme.

For the purpose of stamp duties, a unit is only considered sold when the Sale and Purchase (S&P) Agreement has been executed. The buyer's and seller's stamp duties are based on the date of execution of the S&P Agreement. Likewise to qualify for ABSD remission, developers will have to ensure that all units within the development are sold, with the S&P Agreements executed, within the prescribed period of five years.