A buoyant real estate market fueled by rising prices and increased transactions has increased property taxes and stamp taxes.
Private home prices in Singapore rose 1.1 percent faster in the third quarter, supported in part by land sales and prices, official data showed.
While monthly new home sales fell for the second month in a row in September, the total number of new units sold in the first three quarters of this year has already exceeded all of 2020, according to real estate analysts.
Mr Seah said demand for real estate has stalled for two reasons.
First, the economic impact of the pandemic was “very regressive”, with low-income earners bearing the brunt of the burden.
“The middle to high incomes are mainly in industries and sectors that are less affected by the pandemic. Many of their jobs can also be done remotely, ”he said. “Since they are not as badly affected, they can keep investing and one option is to buy real estate.”
The work-from-home scheme could also encourage some to consider bigger homes, Seah said.
CONTINUED BETTER TAX REVENUE
A recovery in the Singapore economy should allow higher tax rises in these categories to continue.
CIMB private banking economist Song Seng Wun said, “It’s all about the economy. As the restrictions are relaxed, more personal activities and more attitudes can take place, this should add to the general mood.
“So the trend to improve tax collection should go beyond the sectors and industries that have held up so far.”
Earlier this year, the government also provided more than $ 2 billion in assistance packages to those affected by the two “heightened alarm times” from May to July. These were financed through budget reallocations from areas that were underutilized due to the pandemic.
With the recent use of higher-than-expected revenue to fund COVID-19 relief efforts, the likelihood of an upside surprise across the country’s overall budget may be less, Seah said.
He noted that the government tends to be conservative in its estimates and previous budget deficits have been smaller than projected.
“I’m not ruling out the possibility of an upside surprise … but this time around, I think that will be mitigated due to the range of ad hoc spending on the support measures,” added the DBS economist.
The government has announced that it is expecting a budget deficit of S $ 11 billion or 2.2 percent of GDP for the general budget situation in Singapore in FY 2021.