STAMP duty will now be levied on sales of industrial property - a first in Singapore as the Government moves to clamp down on short-term speculation.
The measure was welcomed by industrialists,who said the sky-high prices and rents of recent years have sent business costs soaring.
The seller's stamp duty takes effect todayand applies to industrial property and plots that are sold within three years of the date of purchase.
Property sold within the first year will be levied 15 per cent; 10 per cent if sold in the second year and 5 per cent in the third year.
The aim is to discourage short-term speculation which could distort property prices and raise business costs, the Government said yesterday.
"Traditionally we have not wanted to intervene in this fashion in the industrial segment. But ... the evidence of flipping is very clear," Deputy Prime Minister Tharman Shanmugaratnam told a briefing. "We are doing this to help genuine industrialists and also to prevent a rise in industrial property prices feeding through to consumer prices."
Industrial property prices have doubled over the last three years, outpacing rent increases.
Speculative activity has also shot up. About 15 per cent of all transactions of multiple-user factory space in 2011 were resales carried out within three years of purchase. This percentage rose to 18 per cent over the first 11 months of last year - nearly twice the average of about 10 per cent from 2006 to 2010.
Bosses welcomed the stamp duty, saying they hoped it would lower costs for industrialists.
"This measure will bring some sanity to the whole industrial market," said Mr Douglas Foo, chief executive of Sakae Sushi, which bought its own 200,000 sq ft industrial building in Paya Lebar iPark in the mid-2000s.
Mr Foo said that though firms need their own premises to operate, it has been hard for many genuine industrialists to afford space as their bottom lines have not grown in tandem with the astronomical rise in industrial prices.
DWG analyst Lee Sze Teck said the seller's stamp duty will make people think twice about investing in industrial property.