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SINGAPORE - Starting Thursday (Dec 16), the additional buyer's stamp duty (ABSD) that must be paid in purchases of additional properties will be raised and the total debt servicing ratio for borrowers tightened as part of measures to cool Singapore's property market.
Housing Board loans will also be lowered from 90 per cent to 85 per cent of a property's purchase price.
The ABSD rate will go up from 12 to 17 per cent for citizens buying their second residential property, and from 15 to 25 per cent for those buying their third and subsequent properties.
Permanent residents buying their second residential property will see the ABSD rate rise from 15 to 25 per cent. If they are buying their third and subsequent properties, the rate will increase from 15 to 30 per cent.
Foreigners buying any residential property will pay an ABSD rate of 30 per cent, up from 25 now.
For housing developers, the ABSD rate will go up from 25 to 35 per cent.
These measures are being taken because the property market has been "buoyant" despite the economic impact of Covid-19, said the Finance Ministry, National Development Ministry and Monetary Authority of Singapore in a joint statement late Wednesday night.
Private housing prices have risen by about 9 per cent since the first quarter of last year, while HDB resale flat prices are also recovering sharply after a six-year decline, rising about 15 per cent in the same time period.
"If left unchecked, prices could run ahead of economic fundamentals, and raise the risk of a destabilising correction later on," the authorities said. "Borrowers would also be vulnerable to a possible rise in interest rates in the coming years."
The revised ABSD rates will apply where the option to purchase (OTP) is granted from Dec 16 onwards.
But the old rates will apply in cases where the OTP was granted on Dec 15 or earlier. In addition, the OTP must be exercised on or before Jan 5 or within the OTP validity period, whichever is earlier.
In another move to cool the market, the total debt servicing ratio (TDSR) threshold will be tightened from 60 to 55 per cent.
This will apply where the OTP is granted from Dec 16, as well as for mortgage equity withdrawal loan applications made starting Dec 16.
Borrowers with existing property loans granted before Dec 16 will not be affected by the revised TDSR threshold when refinancing their loans.
The authorities also pledged to increase the supply of both public and private housing to meeting demand, with more details expected to be released on Thursday.
"The measures undertaken in this cooling package will help promote a stable and sustainable property market," they said. "The Government remains vigilant to the risk of a sustained increase in prices relative to income trends."
https://www.straitstimes.com/singap...rs-stamp-duty-tightens-hdb-loan-limit-to-cool
