Many rich Sinkies were over the moon when estate duty was scrapped. Now they could hang on to their assets and inheritance forever, and not just one property but unlimited number of properties, assets and cash. This is extremely good for the old rich and the super rich. Even the HDB owners were in a way happy with it as they too were hoping that their flats would be worth millions in the future. And this is not far fetch given the way things are moving.
What people failed to see is the impact of abolishing estate duty on inflating property prices. Without estate duty, no one needs to be concerned about how high the prices of properties can go. The higher the better, $50m, $100m or $1b, it is okay, very good indeed, for the owners. Govt too need not be unduly concerned once this is taken out of the equation. It is no longer a source of revenue for the state.
Seriously, it is this disregard to the high property prices that is directly affecting property prices here. Everyone, from owners, speculators and developers would want the prices to go even higher. And this will trickle down to all other property prices.
And unthinkingly, the people that benefited most from this no estate duty affair are the foreigners. They could come and buy up everything, as investments or to park their money, which in turn drives up prices even higher. And the foreigners are benefiting more than Sinkies as they have much more money to invest in real estates. They need to park their money somewhere. And we don’t have enough properties for them to acquire. If we are blind to this fact, it is only a matter of time when foreigners would own all the properties they are eligible to buy up. The number of rich foreigners is unlimited and so is their wealth.
Another sordid tale of foreigners dumping their money here is that some are ill gotten gains. Unintentionally or intentionally, our property market is turning into the biggest and legal laundry machine for such black money. There were many tales of foreigners buying anything at any price without bargaining or batting an eye lid. They need to wash their dirty money and where else allowed them to do so so freely and easily.
For those who are pissed off by the unfair advantages foreigners are enjoying here, this is another point of contention. Foreigners are taking full advantage of this situation, to exploit the property markets for huge benefits. They are talking in terms of tens and hundreds of millions, not the few millions which Sinkies are talking about or the few hundred thousands of our HDB millionaires.
When property prices are in the tens of millions and hundreds of millions, it is big money for the state in estate duties. Why are the super rich and foreigners given such great privileges to multiply their wealth which in turn fuelled the property bubble at the expense of the average Sinkies?
It may be time to reconsider reintroducing estate duty to tap on this very rich gold mine of properties in tens and hundreds of millions. Considerations can be made to allow Sinkies to continue to enjoy a tax free property at $5m or $10m. Anything more is reasonable for the state to impose an estate duty on them, a tax to defray the country’s expense, and to curb the uncontrollable escalation of property prices. And why not tax on the ill gotten gains of foreigners and also on them to pay for pushing up property prices here. They must be made to pay for the pains and sufferings of those who could no longer buy what they wanted to buy because of them.
The scrapping of estate duty is not so innocent after all and have very wide implications and consequences.