The cost of living in Hong Kong has been much lower than in most cities in the West. Despite this, many Hong Kong investors are finding it difficult to understand why Singapore remains so popular. Why can a relatively small country like Singapore provide such good value for money?
The reasons for Hong Kong investors rejecting Singapore for cheaper property markets could be numerous and varied. Property prices in Singapore are low enough to allow domestic buyers to find great bargains. Property prices in Singapore are also high enough to allow local buyers to find low taxes, allowing them to make their purchase. Taxes, a key feature of their budget when considering where to purchase.
Quality of life affects the investors
The quality of life in Singapore is also a factor for Hong Kong investors rejecting Singapore for the cheaper property markets in Asia. While some would consider the cost of living in Hong Kong very high, a higher quality of life might mean more to people who are able to spend more on things that they like to do, or who live on a smaller scale.
Why does it make sense for Hong Kong buyers to turn their noses up at the savings that Singapore offers in terms of taxation and quality of life? While many would point to the inflation in the East as a key reason why foreign investors are turning their noses up at Singapore, the price of goods in Singapore has been going up since the 1990s. While the cost of goods in Singapore has risen, many investors still think that the increased tax rates make the difference between buying a cheaper property in Singapore and buying a cheaper property in Hong Kong.
Could the tax increase in Singapore really be the decisive factor for Hong Kong investors refusing to turn their noses up at the cheaper property markets in Asia? Possibly, but it doesn’t seem to be the reason for the high tax rates that Hong Kong buyers are willing to pay. The tax increases in Singapore are actually contributing to the improvements that are being made in the quality of life.
Taxation as a factor
A major change that was introduced in early 2020 makes it possible for anyone who lives in Singapore to claim a refund on their taxes. The changes to the taxation of real estate in Singapore make it possible for tax paid to be given back. This will bring some much-needed relief to real estate investors who thought they were paying fewer taxes.
The high tax rates that come with Singapore have also been a deterrent for foreign investors. These high tax rates make it difficult for foreigners to be able to reach the full potential that a cheaper property market in Asia could provide. For foreign investors that have already had to pay high taxes on real estate, these tax changes mean the government is finally getting serious about reducing its tax burden.
Singapore Tax cuts
Although some would see tax reductions as a sign of a decaying economy, it is easy to see why foreign investors want to buy cheaper properties in Asia. The tax cuts that Singapore has introduced are contributing to the gradual improvements in the quality of life that are making life more affordable for local residents. This is also contributing to the property market and economy that are expanding at a rapid pace.
The tax reductions in Singapore are also helping to reduce housing costs for locals and foreigners alike. Some see this as a win-win situation, while others see it as the beginning of the end of their economies. Some see the tax reductions as a sign of a deteriorating economy, while others see it as a sign of a booming economy.
For Hong Kong investors that are looking to buy cheap property in Asia, however, tax cuts mean the return of high tax rates and a stagnant economy. The tax cuts in Singapore may not be the answer for investors looking for lower taxes and quality of life. For investors that are already paying high taxes, tax cuts could mean that they lose out on the opportunity to find better prices on their property purchases.
For the next few years, the real estate markets in Hong Kong and Singapore should remain cheap, but there is no guarantee that this will remain the case for the foreseeable future. As the economies of these two countries continue to expand, their populations grow and there are more people to pay into these economies, their economies may continue to grow and their populations to expand. their pockets.