SINGAPORE: There has been a sudden surge in Indonesian interest in the Singapore luxury property market.
In the first half of 2016, Indonesians bought 189 properties in Singapore, up by 23% over the same period last year, according to Cushman & Wakefield. Indonesians bought at least 30 properties valued at S$5 million (US$3.7 million) or more, up from just eight such properties during the whole of 2015.
Indonesians have been buying properties in Singapore for years, but the sudden interest in Singapore property market is being attributed to the fact that Singapore, Indonesia and some other countries adopting global tax reporting requirements to inform each other of nationals holding assets overseas.
Indonesians believe that Singapore government will only report assets held in banks, not the money invested in real estate.
The Indonesian government recently passed a law that requires Indonesians to either repatriate, or pay taxes on, moved overseas during periods of unrest worth around US$300 billion. According to the law, the tax rate on declared funds or properties left overseas will increase to 10% in stages until the end of the amnesty period in March.
Indonesians who bring their money back from overseas and invest it in Indonesia for at least three years have been offered several tax benefits. They will pay only 2% tax on declared funds. On the other hand, 200% tax will be charged on Indonesians who don’t declare their assets and are discovered by the Indonesian tax authorities.
Some real estate professionals, however, say Indonesians are trying to take advantage of possible appreciation in property values in Singapore in the near future as they believe the market has bottomed out.
Property prices have been falling steeply in Singapore following a slew of cooling measures introduced by the government.
