Macroprudential Policies in Singapore

MAS is responsible for macroprudential policy, which concerns the stability of the financial system as a whole. Macroprudential policy in Singapore has historically had a significant focus on the private residential property market, given its importance for household balance sheets and banks’ loan portfolios.

Current settings of macroprudential policies

The tables below show the current settings of macroprudential policies in Singapore. This includes tax policies set by the Ministry of Finance. 

Countercyclical Capital Buffer (CCyB)

As MAS has not observed any broad-based domestic credit overheating in Singapore at this juncture, MAS has maintained the CCyB rate at 0%.

Property market-related macroprudential policies


Housing Loan-to-Value (LTV) limit

LTV limits on housing loans granted by financial institutions are tiered according to the number of loans a borrower has.

No. of loans LTV Limit
1st housing hoan 75%An LTV limit that is 20 percentage points lower is applicable if the loan tenure exceeds 30 years (or 25 years where the property purchased is a HDB flat) or loan period extends beyond the borrower's retirement age (65 years).
2nd housing loan 45%Same as Footnote 1 above. 
3rd housing loan 35%Same as Footnote 1 above. 

LTV limits for mortgage equity withdrawal loans (MWLs):

Type of borrower LTV Limit
For a borrower with no outstanding housing loan for the purchase of another residential property 75%
For a borrower with one or more outstanding housing loans for the purchase of another residential property
45%
Total Debt Servicing Ratio (TDSR) and Mortgage Servicing Ratio (MSR)
  • The TDSR cap is set at 60%, which limits the entire monthly debt obligation of borrowers at 60% of their monthly income.
  • The MSR cap is set at 30% for housing loans granted by FIs for HDB flats and executive condominium units purchased directly from property developers.
Maximum Tenure Limit
The maximum loan tenure allowed is 35 years for all housing loans granted for private property, and 30 years for public housing. Loans exceeding a tenure of 30 years for private property, and 25 years for public housing, will face tighter LTV limits. For these loans, the LTV limit is (i) 15%-25% for a borrower with one or more outstanding residential property loans and (ii) 55% for a borrower with no outstanding residential property loan.
Seller's Stamp Duty (SSD)

The SSD is imposed on all residential properties sold within three years of purchase. The SSD rate is set at 4%, 8% and 12% for properties sold within 3 years, 2 years and 1 year of purchase respectively.

Industrial properties and land bought and sold within three years of the date of purchase are subject to the following SSD rates:

Time period in which property is held SSD Rate
If the property is sold in the first year of purchase, i.e. the property is held for one year or less from the date of purchase  15%
If the property is sold in the second year of purchase, i.e. the property is held for more than one year and up to two years from the date of purchase  10%
If the property is sold in the third year of purchase, i.e. the property is held for more than two years and up to three years from the date of purchase  5%
Additional Buyer’s Stamp Duty (ABSD)

The ABSD is applied depending on the number of property an individual has and his/her citizenship.

ABSD Rates 1st Property 2nd Property 3rd and subsequent property
Singapore Citizens Nil 12% 15%
Permanent Residents 5% 15% 15%
Foreigners 20% regardless of number of properties owned
Entities 25% regardless of number of properties ownedAs entities, developers will also be subject to the ABSD rate of 25% for entities. Developers may apply for remission of this 25% ABSD, subject to conditions (including completing and selling all units within the prescribed periods of 3 years or 5 years for non-licensed and licensed developers respectively). Details are provided under the Stamp Duties (Non-licensed Housing Developers) (Remission of ABSD) Rules and the Stamp Duties (Housing Developers) (Remission of ABSD) Rules. 
plus additional 5% for Housing DevelopersDevelopers refer to entities which engage in the business of construction and sale of housing units. (non-remittable)This new 5% ABSD for developers is in addition to the 25% ABSD for all entities. This 5% ABSD will not be remitted, and is to be paid upfront upon purchase of residential property.

History of macroprudential policies in Singapore

This table shows the various macroprudential policies which were introduced in Singapore over the years since 1996.

May


Introduction of Housing Loan-to-Value (LTV) limit for Financial Institutions (FIs)

Housing loan quantum not to exceed 80 percent of purchase price or valuation, whichever is lower.

Foreigners disallowed to have SGD loans

Disallowed the granting of Singapore dollar loans to non-Singapore Permanent Resident (SPR) foreigners and non-Singapore companies for the purchase of residential properties.

Introduction of deemed income tax on gains from sale of property

Deemed income tax on gains from the sale of property within 3 years of purchase was introduced to discourage speculation in the residential property market.

Introduction of Seller’s Stamp Duty (SSD)

The SSD was imposed on residential properties sold within three years of purchase as follows:

  • Sold within the first year of purchase, that is, the property is held for 1 year or less from its purchase date – the full SSD rate (1 percent for the first S$180,000 of the consideration, 2 percent for the next S$180,000, and 3 percent for the balance) will be imposed.
  • Sold within the second year of purchase, that is, the property is held for more than 1 year and up to 2 years – 2/3 of the full SSD rate.
  • Sold within the third year of purchase, that is, the property is held for more than 2 years and up to 3 years – 1/3 of the full SSD rate.

Bring forward stamp duty payment date

Payment of stamp duty was brought forward to the time of agreement to purchase a property. Previously, a buyer who purchased an uncompleted property need not pay stamp duty until the title was transferred to him. This allowed property speculators who bought and sold properties quickly to pay no stamp duty.

November

Suspension of SSD

The SSD was suspended to improve the liquidity of transactions in the market.

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July

Cap on banks’ property exposures

Property-related exposure of a bank capped at 35% of total eligible assets.

October

Removal of deemed income tax on gains from sale of property within 3 years of purchase

The Government removed deemed income tax on gains from the sale of property within 3 years.

Foreigners allowed to have SGD loans

The restrictions that foreigners who were not PRs and non-Singapore companies were not allowed to obtain housing loans in Singapore dollars were lifted.

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July

Increased LTV limit and decreased minimum cash down payment for housing

The LTV limit applicable to housing loans granted by FIs was raised from 80 to 90 percent, and the minimum cash down payment was decreased from 10 to 5 percent.

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September

Disallowed Interest-only housing loans (IOL) and Interest Absorption Scheme (IAS) loans

These are loans in which the developer absorbed interest payments on behalf of the borrower for a period of time.

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February

Lowered Housing LTV limit

The LTV limit applicable to housing loans granted by financial institutions was lowered from 90 to 80 percent. 

SSD was re-introduced

SSD was imposed on all residential properties and residential lands that are bought on or after February 20, 2010 and sold within one year from the date of purchase. The SSD was levied at 1 percent for the first $180,000 of the consideration, 2 percent for the next $180,000, and 3 percent for the balance.

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August

Lowered LTV limit and raised minimum cash down payment

For property buyers with one or more outstanding housing loans: LTV limit was lowered from 80 to 70 percent for housing loans granted by financial institutions and the minimum cash down payment for housing was raised from 5 to 10 percent.

Increased holding period for imposition of SSD

For residential properties bought on or after August 30, 2010, the holding period for the imposition of SSD on residential properties sold was increased from one to three years. The SSD levied on residential properties was revised as follows:

  • Sold within the first year of purchase, i.e. the property is held for 1 year or less from its purchase date – the full SSD rate (1 percent for the first $180,000 of the consideration, 2 percent for the next $180,000, and 3 percent for the balance) will be imposed.
  • Sold within the second year of purchase, i.e. the property is held for more than 1 year and up to 2 years – 2/3 of the full SSD rate.
  • Sold within the third year of purchase, i.e. the property is held for more than 2 years and up to 3 years – 1/3 of the full SSD rate.

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January

Lowered Housing LTV limits

  • For property buyers who are individuals with one or more outstanding housing loans: LTV limit for housing loans granted by FIs was lowered from 70 to 60 percent.
  • For property buyers who are not individuals: LTV limit was lowered from 70 to 50 percent for housing loans granted by FIs.

Increased holding period for imposition of SSD

Holding period for imposition of SSD was increased from three to four years.

Increased SSD rate

SSD rates were raised to 16, 12, 8 and 4 percent for residential properties bought on or after January 14. 2011, and are sold in the in 1st, 2nd, 3rd and 4th year of purchase respectively.

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December

Imposition of Additional Buyer's Stamp Duty (ABSD)

ABSD was imposed on the following categories of private residential property purchases:

  • 10 percent for foreigners and non-individuals (corporate entities) buying any residential property;
  • 3 percent for Singapore Permanent Residents (SPRs) owning one and buying a second and subsequent residential property; and
  • 3 percent for Singapore Citizens (SC) owning two and buying a third and subsequent residential property.

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October

Introduced Maximum Loan Tenure for housing loans from financial institutions

The new loan tenure rules imposed a limit of 35 years on the tenure of housing loans granted by financial institutions for the purchase of any residential property.

Lowered Housing LTV limits
  • LTV limits for new housing loans to borrowers who are individuals, if
      (i) the tenure exceeds 30 years; or
      (ii) the loan period extends beyond the retirement age of 65 years, were lowered to
      (i) 40 percent for a borrower with one or more outstanding residential property loans; and
      (ii) 60 percent for a borrower with no outstanding residential property loan.
  • The LTV limit for housing loans to non-individual was lowered from 50 to 40 percent.

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January

Lowered LTV limits and raised minimum cash down payment for housing

  • LTV limits for new housing loans to borrowers who are individuals with one outstanding housing loan and applying for another housing loan were lowered to
      (i) 50 percent if the loan tenure does not exceed 30 years and the loan period does not extend beyond the borrower’s age of 65 years and;
      (ii) 30 percent if the loan tenure exceeds 30 years or the loan period extends beyond the borrower’s age of 65 years.
  • LTV limits for new housing loans to borrowers who are individuals with two or more outstanding housing loans and applying for another housing loan were lowered to
      (i) 40 percent if the loan tenure does not exceed 30 years and the loan period does not extend beyond the borrower’s age of 65 years; and
      (ii) 20 percent if the loan tenure exceeds 30 years or the loan period extends beyond the borrower’s age of 65 years.
  • The LTV limit for housing loans to non-individuals was lowered to 20 percent, regardless of whether the borrower has any outstanding housing loan.
  • Raised the minimum cash down payment for individuals applying for a second or subsequent housing loan from 10 to 25 percent.

Introduction of Mortgage Servicing Ratio (MSR) for public housing loans granted by FIs

The MSR was capped at 30 percent of a borrower’s gross monthly income.

Raised ABSD rates 

ABSD rates were raised between five and seven percentage points across the board. Imposed ABSD on SPRs purchasing their first residential property and on Singapore citizens purchasing their second residential property. 

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June

Introduction of Total Debt Servicing Ratio (TDSR) framework 

The TDSR framework comprised the standardisation of the methodology for assessing the debt servicing ability of borrowers applying for residential property loans. FIs are required to compute the percentage of total monthly debt obligations to gross monthly income, on a consistent basis and based on a headline threshold of 60 percent. 

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August

Revised Mortgage Loan Terms for public housing

The maximum tenure of new housing loans and re-financing facilities granted by FIs for the purchase of HDB flats was reduced from 35 years to 30 years. New loans with tenures exceeding 25 years and up to 30 years will be subject to tighter LTV limits.

Lowered LTV limits for public housing

  • LTV limits for new housing loans granted for the purchase of public housing to borrowers who are individuals with no outstanding housing loan were lowered to 60 percent if the loan tenure exceeds 25 years or the loan period extends beyond the borrower’s age of 65 years.
  • LTV limits for new housing loans granted for the purchase of public housing to borrowers who are individuals with one outstanding housing loan and applying for another housing loan were lowered to
      (i) 50 percent if the loan tenure does not exceed 25 years and the loan period does not extend beyond the borrower’s age of 65 years; and 
      (ii) 30 percent if the loan tenure exceeds 25 years or the loan period extends beyond the borrower’s age of 65 years.
  • LTV limits for new housing loans granted for the purchase of public housing to borrowers who are individuals with two or more outstanding housing loans and applying for another housing loan were lowered to
      (i) 40 percent if the loan tenure does not exceed 25 years and the loan period does not extend beyond the borrower’s age of 65 years; and
      (ii) 20 percent if the loan tenure exceeds 25 years or the loan period extends beyond the borrower’s age of 65 years
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December

Introduced MSR for Executive Condominiums (ECs)

The MSR for housing loans granted by financial institutions for EC units bought directly from property developers is capped at 30 percent of a borrower’s gross monthly income.

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January

Implementation of countercyclical capital buffer (CCyB) framework

Implemented the CCyB in MAS’ macroprudential policy framework with effect from 1 January 2016. The CCyB was set at zero percent.

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September

Revisions to the TDSR framework

Disapplied the TDSR framework to borrowers refinancing their owner-occupied housing loan, regardless of when the residential property was bought. The refinancing of all investment property loans would be subject to the TDSR threshold, except if they can commit to a debt reduction plan to repay at least 3% of their outstanding property loan over a period of no more than three years, and they meet the lender’s credit assessment.

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March

Revisions to TDSR framework

Disapplied TDSR framework to mortgage equity withdrawal loans with housing LTV ratios of 50 percent and below.

Revisions to SSD

Imposed SSD on holding periods of up to three years, down from four years previously; and lower the SSD rate by four percentage points for each tier. The new SSD rates range from 4 percent (for properties sold in the third year) to 12 percent (for those sold within the first year).

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July

Lowered Housing LTV Limits

Lowered LTV limits by 5 percentage points for all housing loans granted by FIs.

Raised ABSD Rates
  • Raised ABSD by 5 percentage points for individuals (excluding SC and SPR purchasing their first residential property), and by 10 percentage points for entities
  • Introduced an additional ABSD of 5 percent that is non-remittable under the Remission Rules (payable on the purchase price or market value, as applicable) for developers purchasing residential properties for housing development.
  • The ABSD rates for SC and SPR purchasing their first residential property is retained at 0 and 5 percent respectively.

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Selected macroprudential policy measures since 2009

The table below lists the changes made to the housing loan-to-value (LTV) limits and residential property stamp duty tax rates since January 2009. The dates represent key policy changes to either one of selected policy measures.

Housing LTV and Tax-related Measures

Housing Loan-to-Value (LTV) limits (%)*
(tiered by loan count and borrower type)
Date With no outstanding housing loans With one outstanding housing loan With two or more outstanding housing loans For non-individuals
January 2009 90 90 90 90
February 2010 80 80 80 80
August 2010 80 70 70 70
January 2011 80 60 60 50
December 2011 80 60 60 50
October 2012 80 60 60 40
January 2013 80 50 40 20
March 2017 80 50 40 20
July 2018 75 45 35 15

*An LTV limit that is 20 percentage points lower is applicable if the loan tenure exceeds 30 years (or 25 years where the property purchased is a HDB flat) or loan period extends beyond the borrower’s retirement age (65 years).

Seller's Stamp Duty (SSD) rates (%)
(tiered by holding period)
Date Sold within the first year of purchase Sold within the second year of purchase Sold within the third year of purchase Sold within the fourth year of purchase
January 2009 0 0 0 0
February 2010 1% for the first S$180,000 of the consideration, 2% for the next S$180,000, and 3% for the balance 0 0 0
August 2010 1% for the first S$180,000 of the consideration, 2% for the next S$180,000, and 3% for the balance 2/3 of the full SSD rate 1/3 of the full SSD rate 0
January 2011  16 12 8 4
December 2011  16 12 8 4
October 2012  16 12 8 4
January 2013  16 12 8 4
March 2017  12 8 4 0
July 2018  12 8 4 0

* For February and August 2010, we used the highest tax rate for each category for the chart.

Additional Buyer's Stamp Duty (ABSD) rates (%)
(tiered by property count and buyer type)
Date Singapore Citizens (1st property) Singapore Citizens (2nd property) Singapore Citizens (3rd and subsequent property) Permanent Residents (1st property) Permanent Residents (2nd and subsequent property)  Foreigners Non-individuals (Entities) 
January 2009  0 0 0 0 0 0 0
February 2010  0 0 0 0 0 0
August 2010  0 0 0 0 0 0 0
January 2011  0 0 0 0 0 0 0
December 2011  0 0 3 0 3 10 10
October 2012 0 0 3 0 3 10 10
January 2013  0 7 10 5 10  15  15 
March 2017 0 7 10 5 10  15  15 
July 2018  0 12 15 5 15  20 25**

** Plus an additional 5% for housing developers (non-remittable)