Latest Singapore Property Cooling Measures for Purchasing a New Launch Property

Major Key changes:
– Additional Buyer’s Stamp Duty will be raised between five and seven percentage points across the board. To be imposed on PRs purchasing their first residential property and on Singaporeans purchasing their second property.

– Individuals obtaining a second housing loan, the LTV limits will be lowered to 50 percent, or 30 percent if the loan tenure exceeds 30 years. For individuals obtaining third or subsequent housing loans, LTV will be 40 per cent or 20 per cent if tenure exceeds 30 years. For non-individual borrowers, LTV will be lowered to 20 percent, from 40 percent before.

– Minimum cash down payment for individuals who are applying for a second or subsequent housing loan will also be raised from 10 per cent to 25 per cent.

– PRs who own HDB flats will be disallowed from subletting their whole flat

– Max strata floor area for new EC units to be capped to 160 sqm

– Sales of new dual-key EC units will be restricted to multi-generational families only.

– New seller’s stamp duty for the industrial property of between 5 per cent and 15 per cent, depending on when it is sold.

This is the seventh round of cooling measures announced by the Government since 2009 and it’s the most comprehensive set of measures so far.

Private enclosed spaces and private roof terraces will be treated as gross floor area (GFA). The GFA of such spaces in non-landed residential developments, including ECs, will be counted as part of the “bonus” GFA of a residential development and subject to payment of charges.

SELLER STAMP DUTY

Seller Stamp Duty imposed dated 14 of Jan 2011

On 13 January, the government announced the extension of the holding period for imposition of Seller Stamp Duty (SSD) on residential properties from 3 years to 4 years based on new rates.

New SSD rates imposed on or after 14 January 2011 and disposed of (or sold) within 4 years of acquisition are as follows:

  • Up to 1 Year: 16% of price
  • More than 1 Year and up to 2 years:  12% of price.
  • More than 2 Year and up to 3 years:  8% of price
  • More than 3 Year and up to 4 years:  4% of price
  • More than 4 years:  No SSD Payable

 

Changes to the Seller Stamp Duty on and after 11 of Mar 2017

  • Up to 1 Year: 12% of price or market value, whichever is higher.
  • More than 1 Year and up to 2 years:  8% of price
  • More than 2 Year and up to 3 years:  4% of price
  • More than 3 years:  No SSD Payable

Questions for Seller Stamp Duty  

1. Does the SSD holding period start from the date of issue of the Option to Purchase (OTP), the date of Acceptance to OTP or the date of legal completion / Key collection ?

IRAS Answer:

The SSD holding period starts from the date of the instrument that gave effect to the original acquisition (e.g. Acceptance to OTP, Sale and Purchase Agreement signed by the buyers and sellers, transfer instrument).

 2. Is the SSD holding similar to HDB’S minimum occupation period (MOP)  ?

IRAS Answer:

No, the SSD holding period commences from the date of instrument that gave effect to the purchase, whereas the MOP generally commences from the date of Key collection for New / Resale flats. Even if HDB approves a sale within MOP, SSD is payable if the flat is sold within the SSD holding period.

ADDITIONAL BUYER STAMP DUTY - FOR TWO OR MORE PROPERTIES

Additional Buyer Stamp Duty (ABSD) on Purchase Of Residential Properties

Affected Buyers & Additional Buyer Stamp Duty (ABSD) Rates

Between 8 of Dec 2011 and 11 Jan 2013,

  • Foreigners and Entities would have to pay ABSD of 10% on the purchase or acquisition of any residential property.
  • Singapore Permanent Residents (SPR) who already own#1 of more residential properties would have to pay ABSD of 3% on the purchase or acquisition of another residential property.
  • Singapore Citizens (SC) who already own #2 or more residential properties would have to pay ABSD of 3% on the purchase or acquisition of another residential property.

From 12 of Jan 2013, buyers or transferees who are:

  • Foreigners and Entities would have to pay ABSD of 15% on the purchase or acquisition of any residential property.
  • Singapore Permanent Residents (SPR) would have to pay ABSD of 5% on the purchase of their first residential property.
  • Singapore Citizens (SC) who already own #1 residential properties would have to pay ABSD of 7% on the purchase or acquisition of the second residential property.
  • Singapore Citizens (SC) who already own #2 or more residential properties would have to pay ABSD of 10% on the purchase or acquisition of another residential property.

 

Foreign of Certain Nationalities who fall within the scope of the respective Free Trade Agreements (FTA) will be accorded the same treatment as Singapore Citizens.

Remission from Additional Buyer’s Stamp Duty

  • Nationals of Switzerland, Liechtenstein, Norway, Iceland, and the United Stated of America.
  • Such Buyers must submit an application for Remission so as to enjoy the same treatment as Singapore Citizens.
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REVISED ADDITIONAL BUYER STAMP DUTY - FROM 6TH OF JULY 2018

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Question for Remission for Additional Buyer Stamp Duty

1. Residency status – If the buyer is in the process of obtaining his Singapore Citizen (SC) or Singapore Permanent Residency (PR) at the time of purchase, can he later apply for a remission to enjoy lower ABSD rates in his new residency status ?
 
IRAS Answer: The applicable ABSD rate is based on the nationality of the buyer on the date of purchase. The buyer must have been  granted the residency status by the Immigration and Checkpoint Authority (ICA) as at the date be taken as when the residency status was granted.
 
2. Property count – If the individual has sold his existing property (i.e. a buyer has executed the Acceptance to Option to Purchase) but the sale has not been legally completed, will the Existing property still be in his property count ?
 
IRAS Answer: No, the existing property is considered sold once there is an executed sale contract. It will not be included in the individual’s property count.

 

3.  What are the conditions for a married couple to qualify for ABSD refund on the purchase of their second residential property ?

 

IRAS Answer: The ABSD refund is only extended to the married couples with at least one SC spouse who purchase a second property in both spouses’ names only, provided the first property is sold within 6 months after 1) date if purchase (1) of second property or 2) issue date of Temporary occupation Permit (TOP) / Certificate of Statutory Completion (CSC), whichever is earlier (if The second property was uncompleted at the time of purchase) (referred to as “6 –Month Sale timeline”). The married couple must not acquire a third or The married couple must not acquire a third or subsequent residential  property before  the sale if their first property. They must remained married at the time of Sale of their first property.

ABSD must be paid on the second property and the refund application must be made within 6 months after the sale of the first property (1) The date of purchase refers to the date of the  instrument that effects the purchase (e.g Acceptance to Option to Purchase / Sale and Purchase Agreement), not the date of legal completion for the purchase.

 

4. Extension of 6 – month sale timeline

– Can the married couple still request for ABSD if they were unable to sell their first residential property within the 6 – month sale timeline due to poor market conditions (e.g.  Government cooling measures, Seventh Month, festivals and public holidays), condition of property, or personal circumstances (e.g. children’s exams, need time to move into second residential property)?

 

IRAS Answer: No. The ABSD refund is a special concession given only to Singaporean married couples, to facilitate their changing of homes. Given the intent, such couples should sell off their first property expeditiously and not hold on to two properties for an undue period. This is why one of the conditions for ABSD refund is that the first property must be sold within 6 months of the purchase of the second property. This condition is strictly applied to all who wish to avail  themselves to the ABSD refund. To be fair and transparent to all Singaporean married couples, the refund conditions are consistently applied, and there will be no extension of the Six – month timeline to sell the first property. If Singaporean married couples wish to apply for and ABSD refund, they should take into account their personal circumstances, the conditions of the market and of their first property, and ensure that the 6 – month criterion can be met. In this regard, they are strongly encouraged to start the process to sell the first residential property as early as possible. They could also sell their first property before buying the replacement property.

 

5. Buyers who are not married couples – Can a single purchaser also qualify for the ABSD remission on the purchase of a second residential property if the conditions are met ?

 

IRAS Answer: No. The ABSD refund on the second property is only granted to Singapore married couples to facilitate their changing of homes. The remission is not extended to other groups of buyers. Such as parent and child or siblings making a joint purchase, or singles buying a property on their own, as this will inadvertently undermine the underlying policy intent for moderating demand among Singaporeans for second residential properties. Singapore citizen (SC) and Permanent resident (PR) buyers who do not wish to incur the higher ABSD on second residential properties should sell their first property before purchasing their replacement Property.

 

6. Third residential property purchase – If the married couple jointly purchased a third residential property, and was able to sell their existing 2 properties within the 6–month sale timeline, can they qualify for ABSD refund ?

 

IRAS Answer: No. The current ABSD refund for Singaporean married couple buying their second property is strictly not extended to the purchase if third or subsequent property, even if the married couple ultimately only owns 1 property.

Residential Property Loan to Value with effect from 12 of Jan 2013

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Revised Residential Property Loan to Value with effect from 6th of July 2018

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