SINGAPORE – Property Cooling measures – higher ABSD, HDB loan limits lowered. In a statement late last night by Ministry of National Development (MND), 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 ones.
The sustained rise in property prices despite the Covid-19 pandemic has prompted the authorities to introduce cooling measures, in a surprise move that will lead to property buyers paying higher stamp duties.
From Thursday (Dec 16), the additional buyer’s stamp duty (ABSD) that must be paid for purchases of additional properties will be raised.
The total debt servicing ratio (TDSR) for borrowers will also be tightened, while Housing Board loans will be lowered from 90 per cent to 85 per cent of a property’s purchase price.
Permanent residents buying their second residential property will see the ABSD rate rise from 15 per cent to 25 per cent. If they are buying their third and subsequent properties, the rate will increase from 15 per cent to 30 per cent.
Foreigners buying any residential property will pay an ABSD rate of 30 per cent, up from 20 per cent now.
The ABSD rate for entities, including housing developers, will go up from 25 per cent to 35 per cent. Housing developers can have this sum waived if they abide by certain conditions, but will still have to abide by the existing rule under which they must pay an extra 5 per cent of ABSD that cannot be waived.
These measures are being taken because the property market has been buoyant despite the economic impact of Covid-19, the authorities said.
How does this impact your housing & investment needs, rental yields, and retirement planning? At the immediate impact, the number of eligible buyers could drop, which serves as the aim of the cooling measure to tamper demand.
For a comprehensive review of the impact of the changes to your financial well-being, do get in touch, or with your advisors who will be able to guide you as well.
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You can read more about higher ABSD, HDB loan limits lowered at https://www.mnd.gov.sg/newsroom/press-releases/view/measures-to-cool-the-property-market
