Singapore may need a property gains or inheritance tax to address wealth inequality, according to Monetary Authority of Singapore ( MAS ) managing director Ravi Menon, who cites real estate investment as a key driver of the widening wealth gap in the city-state – and globally.

Menon, speaking at an Institute of Policy Studies lecture, says wealth inequality in Singapore could widen over time if price increases in private housing continue to exceed those in public housing, according to a Straits Times report.

"In very few countries do most citizens have the opportunity to enjoy capital appreciation in housing assets as we do in Singapore,” Menon notes. “To promote an inclusive society, it might make sense to shift the balance in Singapore's tax structure away from taxing income towards taxing wealth.”

The current personal tax rate in Singapore ranges from 0% to 22% on a progressive scale, and there are no taxes on dividends, capital gains or inheritance.

This has attracted a number of the world’s wealthiest families to choose the city-state as the domicile for their family offices, with the number of single-family offices in Singapore doubling since the end of 2019.

A number of government initiatives, including the introduction the Variable Capital Company ( VCC ) corporate structure, together with Singapore’s low taxes, political stability and wide array of professional services, such as legal and accounting professionals and trust companies, that support complex financial and insurance products and structures, have also helped attract the assets of fund managers and family offices to the city-state.

Prime real estate features strongly in the portfolios of super-wealthy families, and Singapore has seen its share of significant property transactions.

In the space of a few weeks in 2019, billionaire British inventor James Dyson acquired Singapore’s largest and most expensive super-penthouse for S$73.8 million ( US$54.2 million ) and quickly followed that up by purchasing a bungalow adjacent to the Singapore Botanic Gardens for around S$45 million.