Speech by Mr. Louis Ng Kok Kwang, MP for Nee Soon GRC at the Second Reading of the Stamp Duties (Amendment) Bill [Bill No. 30/2018]
Sir, I stand in support of this Bill.
Last year, stamp duty comprised some seven percent of all taxes collected. In a time of rising social and healthcare spending, it is important that we secure this revenue base.
At the same time, we should also always aspire towards providing more options and greater clarity to liable taxpayers.
I am confident that this Bill will help the government achieve these goals. The Bill provides for the Stamp Duties Act to be applied to electronic records and details specific rules for its application.
This is a significant step towards a regulatory framework built around a digitised economy. The digital world moves quickly, and that creates both opportunity and confusion for Singaporeans.
Sir, I have two points of clarification.
Clarification on legality of blockchain-based property dealers
The first point centers on blockchain.
Can the Minister clarify the government’s regulatory stance towards “proptech” startups that use blockchain to decentralise the electronic records of property transactions?
Can the Minister also share what efforts it has made or will make to educate Singaporeans about the legalities of these services?
Over the past few years, Singapore has seen the rise of the “fintech” industry. What has gone less noticed is the rise of a property tech, or “proptech” industry.
A 2017 media article profiled several Singapore-based proptech firms, each vowing to transform Singapore’s real estate sector with new technology.
Several claim to use blockchain, a technology that decentralises control and ownership.
One of the start-ups, Averspace, has an app that connects renters and leasers. Its app offers templates for rental contracts that are signed online and stored using blockchain.
Two other start-ups, Reidao and FundPlaces, allow users to own properties using blockchain in conjunction with complex currency changes or Special Purpose Vehicles, though their services have yet to extend to properties located inSingapore.
Yet another start-up, InvestaCrowd is planning to launch a crowdfunding model for Singapore property.
A HSBC report states that 89% of recent homeowners look for properties online. Yet consumers may find themselves unclear on the legality of these models.
In 2017, the MAS said only that it was “closely watching” the space. That same year, Reidao’s Chief Executive told the media that it had reached out to the MAS when he started the business.
He claimed that MAS did not, I quote, ““make any real comments” to him because it lacked legislation to instruct the process”.
Young digital firms have showed that they can bring excitement to Singaporeans but also headaches for regulators, as we have seen with the likes of Grab.
Taking a proactive approach, especially where Singaporeans’ nest eggs are concerned, may be a worthwhile.
As such, clarifications on the legality of blockchain-based property dealers would provide very useful guidance for Singaporeans navigating these digital frontiers.
Addressing skepticism on use of electronic records in property transactions
Secondly, and on the other hand, I would like to clarify how the government plans to overcome any possible skepticism towards the use of electronic records in property transactions.
A commentary written by Lee Liat Yang, senior partner of Dentons Rodyk, suggested that while electronic contracts might become the norm in lower value rental contracts, people may still shy from them when buying and selling property over safety concerns.
I am heartened that the Stamp Duties Act outlines clear penalties against the falsification of records and that the Bill defines key terms such as electronic signatures.
Does the government have plans to go beyond these measures to promote awareness of and address concerns about the security and reliability of using electronic records to execute real estate transactions?
In this and in many other digital areas, consumers are charting new waters, and there is enough importance in housing that the government should provide a lighthouse, if not a map, for the people.
Notwithstanding these clarifications, I am in support of this Bill that keeps our property regulatory framework up-to-date with developments on the digital frontier.