A Summary of the Latest Cooling Measures
By PEARL LIM
This article provides the thrust of the latest round of cooling measures – the 7th since 2009. For the full details, please visit the Monetary Authority of Singapore (MAS) website at http://www.mas.gov.sg/en/News-and-Publications/Press-Releases/2013/Additional-Measures-To-Ensure-A-Stable-And-Sustainable-Property-Market.aspx#1.
The slew of measures that has kicked in on 12 January 2013 are
- Changes to Residential Financing:
- Cash Down Payment,
- Loan-to-value ratio (LTV),
- Mortgage Servicing Ratio (MSR) for HDB Flats
- Changes to Additional Buyer’s Stamp Duty (ABSD)
- Additional Housing Measures for Permanent Residents (PRs)
- Regulations on Executive Condominiums (ECs) Size and Sales
- Implementation of Industrial Seller’s Stamp Duty (SSD)
The measures (only apply to HDB flats with less than 60 years of lease) that will kick in on 1 July 2013 are
- Changes to Financing:
- Use of CPF funds
- HDB Housing Loan
The following outlines the various measures in a diagram, tables, and points.
Additional Buyer’s Stamp Duty (ABSD)
Table 1: Changes to Additional Buyer’s Stamp Duty (ABSD)
|Rate on 1st purchase||2nd purchase||3rd & subsequent purchase|
|Singapore citizens||No change||7%||10%|
|Foreigners and non-individuals||15%||15%||15%|
Of note, is that under the new rulings, permanent residents have to incur the ABSD for HDB flats purchases. But for Singaporeans, ABSD will continue to be remitted for HDB flats and new EC purchases.
Please refer to the MAS or IRAS website for the details about the changes to ABSD, including the conditions for remission.
Additional Housing Measures for Permanent Residents (PRs)
a) No subletting of entire HDB flats
b) Dis-allowed from owning a HDB flat and a private residential property concurrently. Have to sell off the HDB flat within 6 months after buying a private residential property.
Regulations on Executive Condominiums (ECs)
a) The maximum strata floor area of new EC units will be capped at 160 square metres.
b) Sales of new dual-key EC units will be restricted to multi-generational families only.
c) Developers of future EC sale sites from the Government Land Sales programme will only be allowed to launch units for sale 15 months from the date of award of the sites or after the physical completion of foundation works, whichever is earlier.
d) Private enclosed spaces and private roof terraces will be treated as gross floor area (GFA). The GFA of such spaces in non-landed residential developments, including ECs, will be counted as part of the ‘bonus’ GFA of a residential development and subject to payment of charges.
Industrial Property Market: Imposition of Seller’s Stamp Duty (SSD)
Affect industrial properties bought or acquired on and after 12 Jan 2013
Table 2: Seller’s Stamp Duty (SSD) Rates
|% of price or market value, whichever is higher||
New Housing Measures that will kick in on 1 July 2013
Table 3: Use of CPF Funds and Provision of HDB Loans for HDB Flats with Less than 60 Years of Lease
|Remaining Lease of HDB Flat||Use of CPF funds||HDB Housing Loan|
|30 – 59 years||Allowed, except for buyers for whom the remaining lease cannot cover them to the age of at least 80.The total CPF usage by the household will be the pro-rated Valuation Limit (VL) based on the ratio of the remaining lease when the youngest buyer who can use CPF turns 55 years old, to the lease at point of purchase.||Allowed, if remaining lease can cover the buyer* to the age of at least 80.Loan tenure will be the shortest of: 30 years; 65 years minus average age of buyers; and balance lease at the point of purchase minus 20 years.|
|20 – 29 years||Not allowed||Allowed, if remaining lease can cover the buyer* up to the age of at least 80.Loan tenure will be the shortest of: 30 years; 65 minus average age of buyers;and balance lease at the point of purchase minus 20 years.|
|< 20 years||Not allowed||Not allowed|
*Based on the average age if there is more than one buyer to a flat.
Source: Adapted from “Use of CPF Funds and Provision of HDB Loans for Purchase of Public Housing” (http://www.mas.gov.sg/~/media/resource/news_room/press_releases/2013/Annex%20IV.pdf)
For advice on a new home loan.
For refinancing advice.
Download this article here.