Owner turns $6.6m profit on sale of Reflections at Keppel Bay unit
PHOTO: 99.co
PUBLISHED ONDecember 01, 2022 2:44 AMByVirginia Tanggono
Several cooling measures have been introduced over the years to cool the property market.
Particularly, the Seller's Stamp Duty (SSD) aims to curb short-term property speculation by taxing owners who sell their residential properties within three years.
Still, that hasn't stopped a small number of owners from selling their properties within a couple of years, and made an all-time high gain within the respective developments.
While looking through the condo transactions that have made all-time high gains in their respective projects, three transactions stood out to us.
Condo units that were sold within three years, and made an all-time high gain in their respective projects
| Condo name | Floor area (sq ft) | Purchase price | Purchase date | Sale price | Sale date | Capital gain | Estimated SSD* (tax rate) | Estimated capital gain after SSD |
|---|---|---|---|---|---|---|---|---|
| One Robin | 1,905 | $2.2m | 22 Mar 2022 | $3.75m | 20 Oct 2022 |
$1.55m (70.5%) |
$450,000 (12%) |
$1.1m (50%) |
| Reflections At Keppel Bay | 7,050 | $11m | 10 Sep 2021 | $17.6m | 12 Sep 2022 |
$6.6m (60.2%) |
$1.41m (8%) |
$5.2m (47.4%) |
| Parc Clematis | 1,044 | $1.72m | 4 Oct 2020 | $2.06m | 10 Nov 2022 |
$344k (20%) |
$82.4k (4%) |
$261k (15%) |
*SSD is charged on the sale price or market value, whichever is higher. For illustration purposes, we assume the sale price is the higher amount to determine the SSD.
It's worth noting that all three condo units were first purchased in the last two years, at a time of robust property market.
At the same time, the owners of these units were able to make an all-time high gain within their developments when they sold their units recently.
Among these three transactions, the Reflections At Keppel Bay transaction stood out for its absolute quantum gain of $6.6 million.
Given that the unit was sold just two days after the one-year mark, the owners were subjected to a lower SSD rate of eight per cent, netting them an estimated gain of $5.2 million.
Here's a table of the SSD rate payable with the corresponding holding period.
| Holding period | SSD rate |
|---|---|
| Up to 1 year | 12% |
| More than 1 year and up to 2 years | 8% |
| More than 2 years and up to 3 years | 4% |
Admittedly, these all-time high gains do not account for other admin costs such as the SSD and legal costs. Still, even after deducting the SSD, the gains are pretty substantial.
Nevertheless, we note that transactions with all-time high gains within the respective developments are outliers, forming around eight per cent of 3,535 resale transactions tracked by our data team as of Nov 27, 2022.
So the three transactions we highlighted are even more of an anomaly, given that they were first bought in the last two years during a hot property climate.
When it comes to selling your property, whether it's bought recently or held for many years, it's important to recognise the current property climate and look at the recent comparable transactions nearby.
ALSO READ: Buyer's and seller's stamp duty: What you should know
This article was first published in 99.co.
