Longer ABSD remission timelines for developers of large and mega en bloc sites

For complex en bloc projects that can yield 700 or more homes, property developers will get more time to complete and sell all residential units before the 35% portion of additional buyer’s stamp duty (ABSD) can be remitted to them.

The extended remission timelines will apply to large and mega sites purchased on or after July 29 this year, said the Ministry of Finance (MOF) and Ministry of National Development (MND) in a July 28 announcement.

This is meant to support licensed housing developers in undertaking large-scale en bloc redevelopments, and thereby rejuvenate those sites and produce additional housing supply, the announcement added.

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Large en bloc sites, classified as Category 1A, can yield 700 to 1,399 residential units. The ABSD completion and sale timeline is now six years, up from 5.5 years.

Mega en bloc sites, or Category 1B, can yield 1,400 or more homes. Developers will have seven years to complete such projects and sell all homes to qualify for the ABSD remission, up from 5.5 years.

In addition, mega sites will face an intermediate sales condition. Developers will be required to sell at least half of the residential units at the end of six years. If they fail to do so, the 35% remittable component of the ABSD with interest will be clawed back in full at the end of six years.

Current and revised remission timelines for collective sale sites, by no. of residential units and intensification factor after redevelopment:

Both large and mega sites are currently under a single Category 1, with a completion and sale timeline of 5.5 years.

The commencement timeline remains at 2.5 years for both, which means housing development must start within 2.5 years from the date of acquisition of the site.

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To qualify for the extended completion and sale timelines, the minimum intensification factor remains at 1.5 times. That means the number of residential units upon redevelopment is required to be at least 1.5 times the number of residential units in the existing development.

Leonard Tay, head of research at Knight Frank Singapore, said the revisions are “a long time coming”, as “it is only logical that a sense of proportion to scale should be adopted into the policy, so that differences in sizes are recognised on a realistic and practical level”.

This is given that large to very large redevelopment projects face materially different risks in execution, construction and sales, as compared to conventionally sized residential projects, Tay noted.

What it could mean for owners

The collective sale market, especially for large sites, has largely been muted since the government raised the ABSD for developers to 40% in 2021.

The number of collective sales has dwindled to four in 2025, down from an estimated 17 in 2021, according to Huttons. This year, Loyang Valley was sold, while Tan Boon Liat Building’s deal is awaiting owners’ approval.

The latest revision to ABSD remission timelines may prompt owners to consider relaunching their developments en bloc, said Mark Yip, CEO, Huttons Asia.

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However, there may not be a big increase in the number of sites actually launched for collective sale, as it will depend on the reserve price and the proportion of foreigners and investors in the development.

“The prohibitive 60% ABSD on foreigners will lead to a veto on a collective sale, as the replacement home will likely cost more than what they can receive in the event of a successful [en bloc] sale,” Yip added.

For ageing condo projects that are facing challenges in upkeep and maintenance, the policy would hopefully offer them a viable exit, according to Tay from Knight Frank.

“It remains that for collective sales to gain further momentum, en bloc sites will need to be launched at realistic price levels,” Tay said.

A key contributing factor that carried some of the recent successful en bloc projects over the finishing line was a reduction in price from earlier attempts.

“Owners of sites with compelling redevelopment potential with intensification, accompanied with pricing within the risk-reward target zone of developers, are best positioned to attract interested buyers,” Tay opined.

More land acquisition options; better managing delays

As for developers, the longer timelines will give them a longer runway to sell units and should mitigate some development risks on large projects, where sales naturally take longer, noted PropNex CEO Kelvin Fong.

The changes could thus give developers more confidence to undertake larger and more ambitious projects, in his view.

Also, the regime change can help support the rejuvenation of ageing estates and the more intensive use of well-located land. Over time, this benefits the wider market through fresh, well-sited homes, Fong said.

The further extension is likely to have a more significant impact on encouraging developers to consider larger-scale en bloc sites, as compared to the first timeline extension framework in March 2025, according to Tricia Song, CBRE head of research, Singapore and Southeast Asia.

“Larger sites, in our opinion, are more efficient in reaping economies of scale during construction,” she said. “They are also more transformational and thus better able to achieve ‘rejuvenation effects’ on the precinct and ultimately offer better value to end-buyers with more facilities spread over lower maintenance costs.”

That said, while this removes a size hurdle, there remain challenges to successful en bloc sales such as divergent owner interests and an uncertain deal completion timeframe.

Developers generally prefer government land sale (GLS) sites due to greater transaction certainty, with the government as the only seller, and thus a more straightforward and faster process, Song said.

While the GLS programme will remain the primary source of residential land for developers, the extended ABSD timelines could encourage large en bloc opportunities as an alternative.

“This may be particularly relevant when competition for well-located GLS parcels is intense, or when developers are seeking sizeable redevelopment sites that are not readily available through GLS,” said Marcus Chu, CEO of ERA Singapore.

In particular, collective sale sites can also provide access to established neighbourhoods where undeveloped state land may be limited. Older developments in mature estates may offer redevelopment potential supported by existing schools, transport connectivity, amenities and a proven residential catchment, Chu noted.

Christine Sun, chief researcher and strategist at Realion (OrangeTee & ETC) Group, said developers will have more time to exit from new risks that may come from fresh typology and design.

They may be more willing to explore complex designs and take part in high-risk, large-scale projects without facing hefty penalties, in Sun’s view. Such projects may involve incorporating eco-friendly construction methods, or building integrated developments or taller infrastructure that entail longer and more complicated construction.

The longer timelines can also help developers manage unforeseen construction delays arising from procurement delays or supply chain disruptions amid the volatile macro-economic environment, Sun added.

Knight Frank’s Tay said the policy adjustment does not fundamentally alter project economics and as such is unlikely to trigger a broad resurgence in en bloc activity.

Developers remain subject to the 5% non-remittable ABSD component and are still exposed to significant clawback risk if conditions are not met. Also, Tay highlighted that construction costs, financing costs, land prices and achievable selling prices will continue to influence redevelopment viability.

Up to 7.5-year timeline

On top of the latest changes, an additional extension of six months to the ABSD remission timelines will continue to be granted if the large or mega sites also have complex technical or infrastructural requirements, are approved under the Strategic Development Incentive (SDI) scheme, or adopt new construction technologies to achieve higher productivity targets.

Those fall under the existing Categories 2 to 4 under the ABSD(HD) Remission Timeline Extension Framework for Complex Projects, which was implemented in March 2025 to provide a six-month extension.

That means large or mega sites that also qualify for another category within the framework will receive the six-month extension too, giving them a commencement timeline of three years, up from 2.5 years. Completion and sale timelines will also increase to 6.5 years for such large sites and 7.5 years for mega sites.

Licensed housing developers buying residential land are subject to 40% ABSD — comprising a 35% upfront remittable component and 5% that is not remittable.

The 35% with interest will be clawed back by the authorities if the developer does not start development, complete it and sell all housing units by the stipulated timelines.

These conditions are intended to inject housing supply in a timely way, and to encourage housing developers to bid for land prudently.

ERA’s Chu said that over time, a more balanced land supply ecosystem, comprising both GLS and collective sale sites, could contribute to a more diversified housing landscape in Singapore.

“This may encourage a wider range of projects across different locations, tenure profiles and market segments, while supporting Singapore’s broader objectives of urban renewal, housing choice and sustainable long-term development,” he added.