Budget 2023: Young Singaporeans Upset About Increase in CPF Salary Ceiling, Buyers’ Stamp Duty

Deputy Prime Minister and Finance Minister Lawrence Wong won little support from young Singaporeans in his Budget 2023 speech yesterday.

Amongst the announcements made were an increase of the CPF monthly salary ceiling from S$6000 to S$8000.

Previously, if your gross salary is S$8000, you will pay 20% of S$6000 (S$1200) to your CPF.

Under the new regulations, if your gross salary is S$8000, you will pay 20% of S$8000 ($1600) to your CPF.

This has upset segments of young Singaporeans, especially those in the lower middle-class, who have slammed the government for cutting their take-home pay at a time when cost of living is escalating rapidly.

They are also afraid that because employers will need to contribute more to their CPF, the higher business costs will encourage bosses to replace them with foreign labour.

This Finance Ministry has stated that to ensure employees earning the same annual salary receive the same CPF contributions regardless of their salary structure, the CPF monthly salary ceiling will eventually be set at one-twelfth of the CPF annual salary ceiling at a steady state.

The increase in buyers’ stamp duty on residential property – the tax one needs to pay when buying n apartment or house – has also irked young Singaporeans looking to upgrade.

Under the new rules, the portion of the property’s value in excess of S$1.5 million, and up to S$3 million, will be taxed at 5 per cent, up from the current 4 per cent.

The portion in excess of S$3 million will be taxed at 6 per cent, up from the current 4 per cent.

This translates to roughly a real percentage increase of around 7 percent to 14 percent in tax for properties that are S$2mil and S$3mil respectively.

Taken together with the huge spike in COE prices, and the increasing unaffordability of HDB flats, it is no wonder then that many young Singaporeans have taken to social media to criticise the existing state of government policies.

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