Measures To Cool The Property Market
1 The Government announced today a package of measures to cool the private residential and HDB resale markets. With effect from 16 December 2021, Additional Buyer’s Stamp Duty (ABSD) rates will be raised, and the Total Debt Servicing Ratio (TDSR) threshold will be tightened. The Government will also tighten the LTV limit for loans from HDB from 90% to 85%. In addition, the Government will increase public and private housing supply to cater to demand.
2 The Government has been closely monitoring the property market for several quarters. The private residential and HDB resale markets have been buoyant, despite the economic impact of COVID-19. Private housing prices have risen by about 9% since 1Q2020. HDB resale flat prices are also recovering sharply after a six-year decline,
3 If left unchecked, prices could run ahead of economic fundamentals, and raise the risk of a destabilising correction later on. Borrowers would also be vulnerable to a possible rise in interest rates in the coming years.
4 The Government has therefore decided to implement a set of measures to cool the private and public housing markets, to promote continued housing affordability. The private residential measures are calibrated to dampen broad-based demand, especially from those purchasing property for investment rather than owner-occupation. Measures to tighten financing conditions for both public and private housing will encourage greater financial prudence. The Government will also be ramping up the supply for both private and public housing.
Measures Applicable to All Residential Property
Raising Additional Buyer’s Stamp Duty (ABSD) Rates
5 The current ABSD rates for Singapore Citizens (SCs) and Singapore Permanent Residents (SPRs) purchasing their first residential property will remain at 0% and 5% respectively.
6 The Government will raise the ABSD rates as follows:
a. Raise ABSD rate to 17% for SCs purchasing their 2nd residential property;
b. Raise ABSD rate to 25% for SCs purchasing their 3rd and subsequent residential property, and SPRs purchasing their 2nd residential property;
c. Raise ABSD rate to 30% for SPRs purchasing their 3rd and subsequent residential property and foreigners purchasing any residential property;
d. Raise ABSD rate to 35% for entities purchasing any residential property; and
e. Raise ABSD rate to 35% for developers purchasing any residential property. This 35% may be remitted under the Stamp Duties (Non-licensed Housing Developers) (Remission for ABSD) Rules and the Stamp Duties (Housing Developers) (Remission of ABSD) Rules, subject to conditions. In addition to this 35% ABSD rate, the non-remittable component remains unchanged at 5%.
7 Table 1 summarises the adjustments to the ABSD rates.
Table 1: Adjustments to ABSD Rates for Residential Property
|Additional Buyer’s Stamp Duty Rates from 6 July 2018 to 15 December 2021||Rates from 6 July 2018 to 15 December 2021||Rates on or after 16 December 2021|
|Singapore Citizens||First residential property||0%|| 0%
|Second residential property||12%|| 17%
|Third and subsequent residential property||15%|| 25%
|Permanent Residents||First residential property||5%|| 5%
|Second residential property||15%|| 25%
|Third and subsequent residential property||15%|| 30%
|Foreigners||Any residential property||20%|| 30%
|Entities||Any residential property||
(Plus additional 5% for Housing Developers
(Plus additional 5% for Housing Developers
8 For purchases made jointly by two or more parties of different profiles, the highest applicable ABSD rate will apply.
9 Married couples with at least one SC spouse, who jointly purchase a second residential property, can continue to apply for a refund of ABSD, subject to conditions. These conditions include selling their first residential property within 6 months after (a) the date of purchase of the second residential property if this is a completed property, or (b) the issue date of the Temporary Occupation Permit (TOP) or Certificate of Statutory Completion (CSC) of the second residential property, whichever is earlier, if the second property is not completed at the time of purchase.
10 The ABSD currently does not affect those buying an HDB flat or EC unit from property developers with an upfront remission, if any of the joint acquirers/purchasers is a SC. There will be no change to this.
11 The revised ABSD rates will apply to cases where the Option to Purchase (OTP) is granted on or after 16 December 2021. There will be a transitional provision where ABSD rates before 16 December 2021 will apply for cases that meet all of the following conditions:
a. The OTP is granted by sellers to potential buyers on or before 15 December 2021;
b. This OTP is exercised on or before 5 January 2022, or within the OTP validity period, whichever is earlier; and
c. This OTP has not been varied on or after 16 December 2021.
12. Correspondingly, the Additional Conveyance Duties for buyers of equity interest property-holding entities
Tightening of Total Debt Servicing Ratio Threshold (TDSR)
13 The TDSR threshold
Measure Specific to Public Housing
Tightening of Loan-to-Value (LTV) Limit
14 The LTV limit for HDB housing loans will be tightened by 5%-points from 90% to 85%. The revised LTV limit does not apply to loans granted by financial institutions, for which the LTV limit remains at 75%.
15 The LTV limit of 85% will apply to new flat applications for sales exercises launched after 16 December 2021, and complete resale applications
Increasing housing supply
16 The Government will also increase the supply of both public and private housing to meet housing demand. Details will be provided tomorrow.
17 The measures undertaken in this cooling package will help promote a stable and sustainable property market. The Government remains vigilant to the risk of a sustained increase in prices relative to income trends.
Issued by: Ministry of Finance, Ministry of National Development and Monetary Authority of Singapore