Currently, individual property sellers do not pay tax on capital gains unless the Inland

Revenue Authority of Singapore (IRAS) views them as traders and will therefore treat
such gains as revenue receipts and hence subjected to tax. Whether the gain is taxable
depends on a number of factors to be considered and they include why the properties
were sold, how long the sellers owned them and how frequently the sellers transacted
properties in the past. (call IRAS to find out exactly how,factors?)

Recently the Ministry of Finance (MOF) put up a proposal for public consultation so that
individuals who sell their properties will be certain that the gains they made on property
transactions will not be subject to income tax if they had not sold any other properties in
the preceding four years.

Nevertheless the market sees this as an anti-speculation measure, as those who sell more
than one property within four years will not be exempt.

MOF then clarified that the proposal is intended to offer greater clarity on whether
property gains will be taxed as it proposes a condition that would guarantee no tax
will be imposed for an individual who sells a property on or after Jan 1, 2010 if that
individual has not sold any other property in the previous four years. Further MOF
emphasized that the proposal concerned changes in the income tax framework from a
long term perspective, and was not aimed at influencing the property market cycle. In
particular, the proposed change involved no tightening of the current income tax
treatment for individuals who sell their properties.

Subsequently MOF decided not to implement the proposed change following the recent
public consultation exercise as the proposed change may inadvertently create uncertainty
for individuals who sell more than one property within any four years - even though there
was no change to the current income tax treatment for such cases.