Say no to hoarding homes: PAP MPs call for inheritance tax, multiple residential property tax - Mothership

"Wealth packed in housing is not flowing and building anything else," said Chen.

On the back of proposed amendments to the Finance (Income Taxes) Bill, several members of parliament took the opportunity to bring up the topic of inheritance tax.

MPs Elysa Chen and Shawn Loh in particular called for taxes for people who own multiple properties, amid growing concerns about wealth inequality in Singapore.

Transport Minister Jeffrey Siow said that such topics "actually go beyond the scope of this bill", and encouraged members to file parliamentary questions at a later sitting.

Speaking ahead of the reading of the Bill on Oct. 6, Chen said that "hoarding"  properties can worsen inequality at the expense of other Singaporeans.

"A home is not like other assets. If someone buys gold or shares, no young couple is worse off," she said.

"But in land-scarce Singapore, when one person holds a fifth or 10th residential property, it takes away another family's chance at a home."

She pointed to a family dispute at High Court last year, in which a woman was found to own 25 properties despite registering them partly in her children's names.

Chen added that while the government has introduced at least 15 rounds of property cooling, residential property prices have risen in a manner out of proportion to real wages.

In addition, as Singapore has no inheritance tax or capital gains tax, the property can appreciate across a lifetime, and compound as an asset over generations.

"The young couple at the viewing, bidding against an investor who already owns four properties, is not competing on equal terms. They are competing against accumulated advantages, built up over decades," she said.

Chen said that Singaporeans already accept the logic of contributing more for more properties, with the additional buyer's stamp duty.

But she called for the same logic to continue "beyond the day of purchase, and into the years of holding".

For instance, rental income tax rates could increase progressively with an individual's third property and beyond, barring the first two for occupation and investment.

Chen pointed out that this is not a call for Singaporeans to "resent success", but for wealth to flow into industry instead of being hoarded in housing.

"Wealth packed in housing is not flowing and building anything else...

Let us make it less attractive to hoard homes, and correspondingly more attractive to put money into venture capital, into private capital, into our SMEs, into companies listed on the SGX, into funds managed in Singapore."

She hence asked the government to study a progressive holding tax on multiple investment residential properties.

Loh called the growing wealth divide "one of the greatest challenges of our time".

He said that if the problem worsens, the government should be prepared to increase property taxes further to reduce income inequality across the generations.

In particular, he suggested that the government consider two things: Property taxes on higher-value investment properties, and taxes on wealth "that is not earned but inherited", namely an inheritance tax.

Should property owners wish to reduce their tax obligations, they have the option to contribute to charitable causes, he pointed out.

Loh added that much of Singapore's wealth is stored in property.

However, the increase in property value is due to the nation's collective success, rather than the efforts of the property owners alone.

As such, it follows that part of the increase in property values "should be shared with those that have less".

"Mr Speaker, taxation is a politically sensitive policy area. As it involves government taking from some and redistributing it to others, no one can be entirely happy about it.

But we must accept that no one is successful on his or her own. We must accept that we need to support one another and ensure fair access to opportunities for those who are not related to us by blood or name, but who are part of this same country that we live and work in."