The Singapore Government has again introduced measures, this time major, to cool the residential property market, which took effect on 12 January 2013.
The Loan-to-Value (LTV) is now lowered further for individual with second and third housing loans and also for non-individuals. The minimum cash down payment will also be increased from 10% to 25% for individuals who are getting their second and subsequent housing loans.
The summary of changes is as shown in the table below:
|Housing Loan||1st Loan||2nd Loan||From 3rd Loan|
|LTV Limit||80%; or 60% if the loan tenure is more than 30 years or extends past age 65||No change||60%; or 40% if the loan tenure is more than 30 years or extends past age 65||50%; or 30% if the loan tenure is more than 30 years or extends past age 65||60%; or 40% if the loan tenure is more than 30 years or extends past age 65||40%; or 20% if the loan tenure is more than 30 years or extends past age 65|
|Minimum Cash Down Payment||5% (for LTV of 80%)
10% (for LTV of 60%)
However, a borrower will not be subject to the lower LTV limit and higher minimum cash down payment requirement when he obtains another housing loan for the purchase of a property which is an Executive Condominium (EC) purchased directly from a property developer or a HDB flat.
Next, Additional Buyer’s Stamp Duty (ABSD) will be raised and also imposed on Permanent Residents (PRs) purchasing their first residential property and Singaporeans buying their second residential property.
The new ABSD structure is as follows:
|ABSD Rate||1st Purchase||2nd Purchase||3rd and Subsequent Purchase|
|Foreigners and non-individuals (corporate entities)||10%||15%||10%||15%||10%||15%|
Singaporean first-time buyers of HDB flats will not be affected by the new measure. However, ABSD can be remitted for purchase of HDB flat/new EC by a Singapore Citizen household only, upon the disposal of the first property. Married couples with at least one Singaporean spouse will also be eligible for the refund of ABSD when the existing property is disposed of.
An additional measure will take effect on 1 July 2013 to tighten the terms for granting HDB loans and the use of CPF funds for the purchase of HDB flats with remaining leases of less than 60 years.