SUPPLEMENTARY SUPPLY (FY 2009) BILL

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SUPPLEMENTARY SUPPLY (FY 2009) BILL: Order for Second and Third Readings read.

Mr Tharman Shanmugaratnam: Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time."

The purpose of this Bill is to make provision in accordance with Articles 148(2) and 148C(2) of the Constitution for additional expenditure in excess of the provisions authorised by the Supply Act 2009. The additional sums have been presented as Supplementary Estimates, which have been considered and approved by the House as Command Paper No. 2 of 2010.

Sir, I beg to move.

Question put, and agreed to.

Bill accordingly read a Second time.

Third Reading:

Mr Tharman Shanmugaratnam: Mr Speaker, Sir, I beg to move, "That the Bill be now read a Third time."

Question put, and agreed to.

Bill accordingly read a Third time and passed.

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STAMP DUTIES (AMENDMENT) BILL: Order for Second Reading read.

Mr Tharman Shanmugaratnam: Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time."

On 19th February 2010, the Government introduced a package of measures to discourage property speculation and pre-empt the over heating of the property

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market. One of the measures was the reintroduction of a seller's stamp duty on all residential properties and residential lands transferred on or after 20th February 2010, and disposed within one year of transfer. The seller's stamp duty is levied at the same rates as the buyer's stamp duty, as specified in the First Schedule of the Stamp Duties Act. The rates are 1% on the first $180,000 of consideration or market value, whichever is higher, followed by 2% on the next $180,000, and 3% on the balance.

Sir, the Government had previously amended the Stamp Duties Act to introduce a seller's stamp duty in 1996 to cool down the over heating property market then. The seller's stamp duty was suspended in November 1997, and the relevant provisions in the Stamp Duties Act were subsequently repealed in 2005. To pre-empt the emergence of a bubble in the property market, we reintroduced the seller's stamp duty from 20th February this year. The Stamp Duties (Amendment) Bill 2010 will give legislative effect to this reintroduction of the seller's stamp duty.

A seller's stamp duty is part of the range of policy instruments that the Government may use from time to time to pre-empt or mitigate the property market bubbles. However, the process of introducing and repealing provisions in the Stamp Duties Act each time we have to introduce, vary or remove a seller's stamp duty is not efficient, especially when we have to respond in a timely and calibrated fashion to changes in the property market cycle. The Amendment Bill will therefore introduce general provisions on a seller's stamp duty and allow the Government to introduce, vary or remove the seller's stamp duty via a Ministerial Order.

I shall run through the clauses of the Bill briefly. Clause 1 of the Bill deems the amendments to the Stamp Duties Act to come into operation on 20th February

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2010, which is the date of implementation of the seller's stamp duty. Clause 2 of the Bill introduces a new section 22A in the Stamp Duties Act to charge the seller's stamp duty on all transfers of prescribed immovable properties. Clause 2 further introduces a new section 22B which enables the Minister for Finance to bring section 22A into force from time to time by an Order to be published in the Gazette . Section 22(B)(6) provides for the first such Order to bring into effect the seller's stamp duty from 20th February 2010.

The salient features of the Order will include:

(a) The categories of properties that will be subject to the seller's stamp duty;

(b) The minimum holding period in order for the seller to be exempt from the duty; and

(c) The date on or after which the property is acquired, that will subject the transferee to the duty if he subsequently disposes the property within the specified holding period.

The amendments to the Stamp Duties Act will, as I have mentioned, provide Government with the policy flexibility to introduce future stamp duty changes where necessary in response to changing conditions in the property market. The Government, however, does not intend to change the seller's stamp duty liberally. Any future change to the seller's stamp duty will be a carefully considered decision, taking into account all factors relating to the state of the market and the possible risks ahead.

Lastly, clause 3 of the Bill makes consequential amendments to the Third Schedule of the Stamp Duties Act, which specifies the persons liable to pay the duty.

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Sir, I beg to move.

Question put, and agreed to.

Bill accordingly read a Second time and committed to a Committee of the whole House.

The House immediately resolved itself into a Committee on the Bill. – [Mr Tharman Shanmugaratnam].

Bill considered in Committee; reported without amendment; read a Third time and passed.