Parliament
No GCBs sold to trust companies holding properties for foreign beneficiaries over the past five years
In response to a Parliamentary question from NCMP Leong Mun Wai, Second Minister for Law Edwin Tong clarified that no Good Class Bungalows (GCBs) were sold to trust companies with foreign beneficiaries in the last five years. This followed the S$88 million transfer of a GCB by Mr K Shanmugam to UBS Trustees, sparking speculation about foreign ownership.
On 14 October 2024, during a Parliamentary session, Non-Constituency Member of Parliament Mr Leong Mun Wai raised concerns regarding the acquisition of Good Class Bungalows (GCBs) by trust companies, particularly with respect to foreign beneficiaries.
He posed three questions to the Minister for Law: what percentage of GCBs have been sold to trust companies in the last five years, how many of these trust companies have foreign beneficiaries, and how many clearance certificate applications by such companies have been rejected.
Second Minister for Law Edwin Tong, in a written response, clarified that no GCBs had been sold to trust companies holding properties for foreign beneficiaries over the past five years.
Foreign individuals, including Permanent Residents (PRs), and foreign entities must seek approval under the Residential Property Act (RPA) to acquire any landed residential property, including GCBs. This applies whether the purchase is direct or through trust companies.
Singaporean citizens, however, are exempt from this requirement if the property is not held for foreign beneficiaries.
The Singapore Land Authority (SLA) tracks all applications for foreign purchases under the RPA, and Mr Tong confirmed that, from 2019 to 2023, no approvals were granted to trust companies where the beneficiaries were foreign.
Moreover, no approvals have been issued to foreigners, including PRs, for the purchase of GCBs since 2021. Between 2012 and 2021, only five such approvals were granted, two of which were inheritance cases.
Mr Tong emphasised the government’s strict stance on limiting foreign ownership of GCBs and other landed properties in Singapore.
These properties, often seen as prime real estate in affluent districts, are closely monitored to ensure compliance with the RPA, preventing foreign buyers from acquiring such assets without approval. This strict approach aligns with the government’s broader efforts to ensure that GCBs remain accessible primarily to Singaporeans or individuals with a strong nexus to Singapore.
Sale of GCB by Home Affairs and Law Minister in 2023 for S$88 million
This parliamentary clarification comes against the backdrop of a high-profile property transaction involving Mr Shanmugam, the Minister for Home Affairs and Law, who transferred his GCB at Astrid Hill to UBS Trustees (Singapore) Ltd for S$88 million in August 2023.
The transfer raised public interest due to the speculation that the beneficiary of the trust may be a foreigner, despite the stringent rules laid out under the RPA.
UBS Trustees, a licensed trust company under the Trust Companies Act 2005, acted as the trustee for The Jasmine Villa Settlement, in this transaction.
Trust structures such as this are commonly used for estate planning and asset management.
The lack of clarity regarding the identity of the beneficiary has led to public speculation, with some questioning whether the trust could involve a foreign beneficiary. However, based on Mr Tong’s response, this seems impossible unless the beneficiary is a new Singaporean citizen.
Mr Shanmugam purchased the Astrid Hill GCB in December 2003 for S$7.95 million. By the time of its transfer in 2023, its value had risen significantly to S$88 million, in line with the rising prices of GCBs in Singapore’s prime District 10, known for its exclusive residential estates. The transaction was facilitated by Allen & Gledhill, with Ms Ho Sheau Farn representing UBS Trustees and Mr Ho Kin San acting on behalf of Mr Shanmugam.
The property’s transfer was not recorded in the Urban Redevelopment Authority’s (URA) Private Residential Property Transactions database, likely due to its nature as a trust-related transaction rather than a conventional sale. This lack of public visibility has further fuelled speculation regarding the identity of the trust’s beneficiary.
Significant stamp duties were also involved in the transfer. Based on current rates, the Buyer’s Stamp Duty (BSD) amounted to approximately S$5.2 million.
In addition, a 65% Additional Buyer’s Stamp Duty (ABSD), applicable for such transactions, would result in a further S$57.2 million, bringing the total cost to around S$150.4 million. However, UBS Trustees may have been eligible for remission of the 65% ABSD under certain conditions. Specifically, if the trust is held for identifiable individual beneficiaries who are Singaporean citizens, part or all of the ABSD may be refunded.
This transfer followed shortly after Mr Shanmugam’s ministerial statement in July 2023, where he addressed questions from Members of Parliament regarding his rental of a state-owned black-and-white colonial bungalow at 26 Ridout Road.
In that statement, he explained that as he approached his 60s, he reassessed his financial situation and decided to place his Astrid Hill property on the market while moving into a rental home. This restructuring was part of his broader financial planning, and he clarified that the decision was not driven by financial need but by prudent management of his assets.
The timing of the GCB transfer, just weeks after his statement in Parliament, raised further questions, particularly given the substantial value of the transaction.
As of the time of publication, no official comment has been received from Mr Shanmugam over the sale of his property.
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