Knight Frank Commentary | Revisions To ABSD Regime For Large-Scale En Bloc Redevelopments

Knight Frank Commentary | Revisions To ABSD Regime For Large-Scale En Bloc Redevelopments

The government's latest revisions to the Additional Buyer’s Stamp Duty (ABSD (Housing Developer)) remission framework took a long time coming. It is only logical that a sense of proportion-to-scale should be adopted into the policy, so that differences in size are recognised on a realistic and practical level. Large to very large redevelopment projects face materially different execution, construction and sales risks compared with conventionally-sized residential projects. Under the revised framework, developers acquiring qualifying enbloc sites from 29 July 2026 will receive longer completion and sales timelines. Projects yielding 700 to 1,399 units will have six years instead of five-and-a-half years, while developments yielding 1,400 units or more will have seven years, subject to an intermediate requirement to sell at least 50% of units by the sixth year. This retains a degree of market discipline while acknowledging the complexity of scaling up redevelopment projects. The policy adjustment primarily reduces execution risk for very large redevelopment projects rather than stimulating the en bloc market broadly.

The immediate effect would cause developers to relook at certain enbloc sites on the market, and reconsider the land banking of some. Especially so for very large ageing estates where redevelopment potential can be substantial but execution risk has typically constrained appetite. The previous ABSD deadlines imposed a compressed window on developers undertaking projects of substantial scale, especially when managing project phasing, infrastructure integration, construction complexity and the marketing and sales of a sheer volume of units. This would give developers some breathing space to reasonably navigate the technical and bureaucratic complexities of a large development.

The revision does not fundamentally alter project economics. Developers remain subject to the 5% non-remittable ABSD component and retain exposure to significant clawback risk if conditions are not met. Construction costs, financing costs, land prices and achievable selling prices remain the main elements of redevelopment viability. As such, the change is unlikely to trigger a broad resurgence in enbloc activity.

Hopefully, the policy would encourage rejuvenation of ageing estates and intensify land use where appropriate, offering ageing condominium projects that are facing challenges in upkeep and maintenance a viable exit. Requiring a redevelopment yield at least 1.5 times the existing number of units is significant because it links the timeline extension directly to land optimisation and housing supply outcomes rather than merely facilitating collective sales.

It remains that for collective sales to gain further momentum, enbloc sites will need to be launched at realistic price levels. A key contributing factor that carried some of the recently reported successful enbloc projects across the finishing line was the reduction in price from earlier attempts. Owners of sites with compelling redevelopment potential with intensification, accompanied with pricing within the risk-reward target zone of developers are best positioned to attract interested buyers.