Foreigners investing in property in Singapore pay one of the lowest levels of taxes globally, even cheaper than London, Sydney, New York, and Paris. However, Hong Kong still beat out Singapore by 0.6% for the no.3 spot, according to a new report by property expert Knight Frank and top professional services firm EY.
Transaction costs and taxation have become increasingly crucial
In 15 of the major global cities, the Global Tax Report 2015 conducted by Knight Frank and EY, analyses the major costs of buying, holding and selling for foreigners investing in property, specifically prime residential property over a five year period (2010 – 2015) as well as their associative taxation costs.
And although Shanghai offers the lowest property costs out of those 15 cities, Monaco claims the top spot in offering the lowest taxation when purchasing a property at both US$1m and US$10m.
London sits in the middle of the 15 cities analysed for property costs and taxation
Sao Paulo has the highest tax costs for investors at 31.5% over five years on properties worth $1m and $10m costs with Singapore a distant second, where investors are charged 19.0% of $1m of the property cost over a five year period.
The report warns those investing in property in Singapore, “Given the large housing supply in the pipeline, the impending threat of an interest rate hike, and a slowing global economy, the government must keep a close watch and ensure that the policies are tweaked at the right time.”
Overall, transaction costs and taxation have become increasingly crucial as part of an investor’s decision process due to the slowing rate of property price growth on average in many cities globally.
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