I’m back from my ski trip to Austria! It was fun and I even got to spend a day in Munich as well. Though I’m not sure whether we will go back to Austria to ski anytime soon or try another ski region. It’s more interesting to visit new places when you are younger before picking the ones you want to go back to when you are older.
Anyway, the Singapore Budget 2018 happened when I was away, which apparently has been a hot topic of discussion since its announcement. Having worked in accounting firms in Australia and Singapore, Budget Announcements are always major events that I look out for professionally and personally. This year is no different as I actually found the time to read summaries of the Singapore Budget 2018 in between finishing a ski session and waiting to go relax in the hot pool and sauna. Haha, priorities.
I’m only going to touch on the aspects that affect my wife and I personally. Not planning to debate and address the divisive issues since there’s already plenty of online material on that.
SG Bonus for all adult Singaporeans
I might have mentioned this on my blog before but I’m actually a Singapore PR (Malaysia Citizen). I was born in Singapore and served NS but just never got around to converting my Malaysia Citizenship to Singapore Citizenship. Having grown up all my life as a Singapore PR, I have gotten used to not receiving any of such cash handouts (another example is the GST Voucher – Cash and Growth Dividends) given to Singapore Citizens.
I’m happy that my wife gets to receive the SG Bonus. An advantage of being married to a Singapore Citizen. She has 1 property with Assessable Income for YA2017 above S$100,000. This means she gets S$100, which is to be paid around end 2018. Nice to know our family household of 2 still received this benefit.
Increase in Buyer’s Stamp Duty (BSD) rates for residential properties
The top marginal BSD rate will be raised from 3% to 4% and applied on the value of a residential property in excess of S$1 million. This is annoying because my wife and I were thinking of buying a bigger 3-bedroom apartment to get ready for family planning. There’s no direct impact yet and it’s not a significant increase in BSD. But the timing of this BSD hike is not helpful at all.
Future increase in GST
The GST will be raised progressively from its current 7% to 9% sometime between 2021 and 2025. This was perhaps the most anticipated Budget Announcement that people were speculating on. It looks like the Government is really going to increase GST eventually while giving us at least 3 years to get used to it first. As we know, GST is a broad-based consumption tax and raising it means increasing the costs of living for everyone. There’s no hiding from it.
My wife and I are big consumers of goods and services, which is evident from our monthly spending levels. While we are not looking forward to the GST hike, we can still take steps to manage its impact given the room we have to make cuts on our spending. Besides, a 2% increase is not going to make the difference between whether we plan to purchase an item, dine out or not. We are just going to have to find ways to earn more income to offset the higher expenses. Tough ask in this labour market.
Heh heh … you forgot about tax transparency treatment for S-REITs inside S’pore listed REIT ETFs.
No more corporate tax of 17% on their distributions to investors!
Good news for holders of Phillip-Lion SREIT ETF and Nikko-ST REIT ETF (which holds large % of S-REITs).
Oh yah, thanks for the reminder! Haha, that should be useful for my REIT ETF holdings.