Knowledge Highlights 23 October 2020

On 8 October 2020, the Ministry of National Development, Ministry of Finance, Ministry of Law (“MinLaw”) and Ministry of Trade and Industry (collectively, “Ministries”) introduced additional temporary relief measures for property developers affected by disruptions to construction timelines resulting from the Covid-19 pandemic due to workers being placed under quarantine and the redesign of worksite practices for safe distancing.

The additional temporary relief measures effective 8 October 2020 are:

  • Extension of the Project Completion Period (“PCP”) by a further six months for residential, commercial and industrial development projects;
  • Extension of time by a further six months for the commencement and completion of the residential development projects in relation to the remission of the Additional Buyer’s Stamp Duty (“ABSD”) for housing developers; and
  • Extension of the PCP by up to a further six months for residential development projects under the Qualifying Certificate (“QC”) regime for foreign housing developers. 

These additional temporary measures are in addition to the temporary relief measures announced on 6 May 2020 and highlighted in our article titled “Covid-19: Temporary relief measures for property sector”.

These temporary relief measures do not affect the other existing residential property market cooling measures which remain relevant to ensure that private residential property prices are broadly consistent with economic fundamentals. All qualifying housing developers will continue to be subject to the prevailing ABSD regime, albeit with a further six-month extension of the remission condition timelines for commencement and completion of the residential development projects. There is no further extension of the remission condition timeline for the sale of all housing units in the residential development project.

The Ministries’ joint press release states that contractors and developers have raised concerns over possible additional costs and financial penalties in contracts incurred due to delays caused by the Covid-19 pandemic. With these additional support measures, the Government expects developers to continue providing relief and support to their main contractors. The Government will implement additional relief measures to support the stakeholders as necessary, and ensure that no stakeholder bears an undue share of the burden imposed by the Covid-19 pandemic.

Private residential development projects

Project Completion Period

The PCP for qualifying residential development projects on Government sale sites, or on land which was directly alienated or had their lease renewed by the Singapore Land Authority (“SLA”), will be extended by a further six months. The qualifying conditions to be met for the extension of the PCP remain unchanged and are as follows:

  • The land was awarded on or before 1 June 2020, or the land was directly alienated or had its lease renewed by SLA on or before 1 June 2020; and
  • The original timeline for completion of the residential development expired on or after 1 February 2020.

No application is necessary as eligible developers will be notified by the respective agencies.

Additional Buyer’s Stamp Duty

Under the ABSD regime, developers are to commence and complete the residential development, and sell all housing units in the residential development project within the specified timelines, failing which they will be subject to the ABSD on the purchase of the land.

By way of background, the specified timeline for commencement of housing development is two years from the purchase of the land for all housing developers. The specified timelines for completion of housing development and sale of all housing units are five years from purchase of the land for licensed developers (those who construct more than four housing units), and three years from purchase of the land for non-licensed developers (those who construct no more than four housing units). Under the temporary relief measures announced on 6 May 2020, the specified commencement, completion and sale timelines were extended by six months, subject to conditions.

Under the additional temporary relief measures, the specified commencement and completion timelines will be extended by a further six months for qualifying residential development projects. There is no further extension of the specified timeline to sell all housing units in the residential development project.

The qualifying conditions to be met for the extension of the specified timelines for commencement of residential development remain unchanged and are as follows:

  • The land was purchased on or before 1 June 2020; and
  • The original timeline for commencement of the residential development expired on or after 1 February 2020.

The qualifying conditions to be met for extension of the specified timeline for completion of residential development remain unchanged and are as follows:

  • The land was purchased on or before 1 June 2020; and
  • The original timeline for completion of the residential development expired on or after 1 February 2020.

Eligible developers will be granted the extension automatically. No application is necessary.

Qualifying Certificate

Under the QC regime, developers subject to the QC rules are to complete construction of all housing units in a residential development project within five years from the date of issue of the QC or the collective sale order, and dispose of all housing units within two years from the issue of Temporary Occupation Permit or Certificate of Statutory Completion.

Under the additional temporary relief measures, developers applying to extend their existing completion deadline will be granted a further waiver of extension charges of up to a total of six months. This will also apply to other SLA approvals requiring the completion of all units in the residential development. There is no further waiver of extension charges to extend the existing deadline to dispose of all housing units in the residential development project.

The qualifying conditions to be met for the waiver of extension charges to extend the completion deadline remain unchanged and are as follows:

  • The QC or SLA approval requiring the completion of all units in the residential development was issued on or before 1 June 2020; and
  • The original timeline for completion of the residential development expired on or after 1 February 2020.

If you hold a QC or other SLA approval and qualify for the concessions, we would be pleased to assist you to apply to the SLA Land Dealings Approval Unit (“LDAU”) for the concessions. Please note that applications must be made by 1 December 2020.

Developers which had already applied for and obtained an extension of existing completion deadlines under the temporary relief measures announced on 6 May 2020 will automatically be granted the further six-month waiver of extension charges, and will be notified of their new deadlines by LDAU.

Commercial and Industrial development projects

Project Completion Period

The PCP for qualifying commercial and industrial development projects on Government sale sites, or on land which was directly alienated or had their lease renewed by SLA, will be extended by a further six months.

The qualifying conditions to be met for the extension of the PCP remain unchanged and are as follows:

  • The land was awarded on or before 1 June 2020, or the land was directly alienated or had their lease renewed by SLA on or before 1 June 2020; and
  • The original timeline for completion of the development expired on or after 1 February 2020.

No application is necessary as eligible developers will be notified by the respective agencies.

Reference materials

The Ministries’ joint press release is available from the MinLaw website www.mlaw.gov.sg by clicking here.

The following subsidiary legislation are deemed to have come into operation on 1 August 2020 and are available on the Singapore Statutes Online website sso.agc.gov.sg:

Further information

Allen & Gledhill has a Covid-19 Resource Centre on our website www.allenandgledhill.com that contains knowhow and materials on legal and regulatory aspects of the Covid-19 crisis.

In addition, we have a cross-disciplinary Covid-19 Legal Task Force consisting of Partners across various practice areas to provide rapid assistance. Should you have any queries, please do not hesitate to get in touch with us at covid19taskforce@allenandgledhill.com.

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