Minister for National Development Lawrence Wong told parliament on March 7 that the government is planning to subject “significant owners of residential-property-holding entities” to the usual stamp duties when they transfer equity interest in such entities, like what would happen if they were to buy or sell the properties directly.

Under current rules, direct residential property purchases by entities are liable for 3% buyer’s stamp duty and a 15% additional buyer’s stamp duty. However, buying the shares in the holding company that owns the property will incur a 0.2% tax of the net asset value of the holding company. The holding company is also not liable for any seller’s stamp duty.

The change may impact developers with substantial unsold inventory. A number of developers have carried out bulk sales of unsold residential units through the sale of shares in the holding companies to avoid extension charges under the qualifying certificate rules.