Singapore lures the super rich
SINGAPORE might cover an area of just 712 square kilometres, but it is fast becoming a tax haven for rich Australians. The attractions are large. Capital gains are not taxed. Individuals are only taxed on income earned directly in Singapore, and for the super wealthy, there are no inheritance taxes.
Mining magnate Gina Rinehart - the largest shareholder in Fairfax Media - is the latest to buy up big in the city state. The billionaire has reportedly spent $S57 million ($A43.8 million) on two units, off the plan, in the Seven Palms Sentosa Cove condominium project.
A company linked to Mrs Rinehart's Hancock Prospecting purchased a unit on the third floor of the four-storey complex for $S23.3 million as well as a top-floor unit for close to $S33.9 million, according to Singapore's Business Times newspaper.
The director of Savills international residential sales in Singapore, Julian Sedgwick, said Mrs Rinehart's purchase would set a new residential price record for the cosmopolitan hub.
Seven Palms Sentosa Cove has been designed by Australian firm Kerry Hill Architects, which was responsible for some of the Aman resort developments. Touted as Singapore's only beachfront condominium, the 41-unit development, due to be completed next year, is located between the Sentosa Golf Club and the South China Sea.
But Mrs Rinehart is not the first Australian mining magnate to head to Singapore. Billionaire Nathan Tinkler of Whitehaven Coal recently put his plans for a $13 million beachfront pad in Newcastle on hold and moved his family to Singapore.
It is believed Mr Tinkler has also bought in Sentosa Cove but Mr Sedgwick said the purchase was in a different luxury development from Mrs Rinehart's.
Eduardo Saverin, who co-founded Facebook at age 21, also lives in Singapore.
His Facebook stake was worth more than $US3 billion when the company went public in May. That may have been reduced since, but he is still phenomenally wealthy. Born in Brazil, Saverin, 30, has renounced the US citizenship he gained as a teenager to become a permanent resident of Singapore. This led to claims in the US that he was avoiding tax.
What has attracted attention is his billionaire playboy lifestyle in Singapore. ''It's a misperception, especially the playboy,'' he said. ''I do have a Bentley. I do go out. I'd rather not go into personal details.''
Personal tax rates in Singapore are among the lowest in the world, with a cap of 20 per cent, compared to the top tax rate of 46.5 per cent in Australia.
Mr Sedgwick said Singapore was ''turning itself into a mini-Switzerland''.
''It's got the banking secrecy laws, it's becoming a financial centre, new casinos and now a lot of the big banks are operating out of Singapore purely because it's becoming a very exclusive place to live.''
Under Singaporean law, Sentosa Cove is the only location where foreigners can buy houses. Properties are bought on a 99-year lease program under strict conditions that the property is owner-occupied and never rented out.
Wealthy internationals are clearly the target audience for the development. On the Seven Palms website, the section titled ''Schemes for Foreigners'' details how one can apply for a long-term social visit pass. It is a three-year pass that can be renewed for up to five years each time it expires.
Mr Sedgwick said most foreigners who bought in Singapore were from Malaysia, Indonesia or China, but he had seen an increasing number of high-net-worth Australians moving to the business hub, drawn by the exclusivity and privacy. ''What you do there is kept there,'' he said.