26 July 2018

On 5 July 2018, in a bid to cool the property market and keep price increases in line with economic fundamentals, the Ministry of Finance (“MOF”), Ministry of National Development and Monetary Authority of Singapore (“MAS”) jointly issued a press release announcing adjustments to the Additional Buyer’s Stamp Duty (“ABSD”) rates and Loan-to-Value (“LTV”) limits on residential property purchases.

Raising ABSD rates

The ABSD rates for Singapore Citizens (“SC”) and Singapore Permanent Residents (“SPR”) purchasing their first residential properties remain at 0% and 5% respectively.

For all other individuals, the ABSD rates have increased by five percentage points. For entities, the ABSD rates have increased by 10 percentage points.

An additional, non-remittable ABSD of 5% has been imposed on developers purchasing residential properties for housing development, which is to be paid upfront upon the purchase of the residential property.

There is a transitional provision for cases where an Option to Purchase (“OTP”) was granted by sellers to potential buyers on or before 5 July 2018, and this OTP has not been varied on or after 6 July 2018. For such cases, the previous ABSD rates, instead of the revised ABSD rates, apply if the OTP is exercised on or before 26 July 2018 or the OTP validity period, whichever is earlier.

Tightening of LTV Limits

The LTV limits have been tightened by five percentage points for all housing loans granted by financial institutions. These revised LTV limits do not apply to loans granted by the Housing Development Board.

 

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