Subsale Properties in Singapore: How Owners Profit from Them

What is a Subsale Property?
In Singapore’s real estate market, a subsale refers to the resale of a property that is still under construction or has recently been completed but has not yet been fully occupied. Unlike resale properties (which are sold after the developer has handed over the unit), subsale transactions occur before the project receives its Certificate of Statutory Completion (CSC).

Subsale properties are typically purchased directly from the original buyer (not the developer), often at a higher price than the initial launch price.

Why Do Owners Profit from Subsales?

1. Capital Appreciation During Construction
Many buyers purchase properties during the pre-launch or early phases at lower prices. As construction progresses and the market improves, the property’s value increases. By selling in the subsale market, owners can lock in profits before the project is even completed.

2. Avoiding Additional Buyer’s Stamp Duty (ABSD) and Seller’s Stamp Duty (SSD)
– ABSD: Investors who buy a second property must pay Additional Buyer’s Stamp Duty (ABSD). By selling in the subsale market, they avoid holding the property long-term and incurring extra taxes.
– SSD: If they sell within the first 3 years, they may face Seller’s Stamp Duty (SSD). However, if they time the sale correctly (after SSD period ends but before completion), they maximize gains.

3. High Demand from Buyers Who Missed Early Launch Prices
Some buyers prefer subsale properties because:
– They missed the initial launch price.
– They want to avoid the long waiting period for new launches.
– They can inspect near-complete units rather than buying based on showflats.

This demand allows subsale sellers to mark up prices significantly.

4. Flipping for Quick Returns
Investors with strong market insight buy units at launch, then sell at a higher price in the subsale market—sometimes even before construction finishes. This strategy, known as “flipping,” can yield double-digit returns in just a few years.

Risks of Subsale Investments
While profitable, subsale transactions come with risks:
– Market downturns can reduce demand.
– High competition if many units are listed.
– Financing challenges if banks undervalue the property.

Conclusion
Subsale properties in Singapore offer a lucrative opportunity for owners to profit from capital appreciation, strong demand, and strategic tax planning. However, success depends on market timing, location, and economic conditions.

For investors, subsales can be a faster way to earn returns compared to waiting for full completion. For buyers, they offer a chance to secure a property at a price below future market rates.