Here’s an important update on the new property rules in Singapore. Written by Dennis Ng, founder of housingloan.sg and masteryourfinance.com:
After the National Day Rally speech by Prime Minister Lee Hsien Loong on 29 Aug 2010, today Ministry of National Development and HDB announced some measures on the property market. To summarise, the changes are as follows:
#1. Increase the holding period for imposition of Seller’s Stamp Duty (SSD) from the current one year to three years. This is on a step-down basis, ie. Sell within 1 year, 100% of SSD is payable. Sell within 2 years, 2/3 of SSD is payable, sell within 3 years, 1/3 of the SSD is payable. Sell after 3 years, no SSD payable.
Note: If Option to Purchase is exercised on 30 Aug 2010 or later, you’re affected.
#2. For property buyers who already have one or more outstanding housing loans at the time of the new Property purchase:
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Increase the minimum cash payment from 5% to 10% of the valuation limit; and Decrease the Loan-to-Value (LTV) limit for housing loans granted by financial institutions regulated by MAS to these buyers from the current 80% to 70%. Thus, if you have an existing property that is fully paid, and have no outstanding Housing Loan, if you buy a property, you might still get 80% financing.
Note: Above measures on the Cash Downpayment and 70% Financing Limit apply to all property purchase with Date of Option to Purchase dated 30 Aug or later.
#3. Changes to Purchasers of non-subsidised flats and Resale HDB Flats.
Note: * Resale flat bought without CPF housing grant. The MOP will be computed from the effective date of purchase of the non-subsidised flats.
Measures announced by HDB on 30 Aug 2010:
- Allow households earning between $8,000 and $10,000, to buy new DBSS flats with a $30,000 CPF Housing Grant;
- Increase the supply of new flats, Design, Build and Sell Scheme (DBSS) flats, and Executive Condominiums (EC);
- Shorten the completion time of Build-To-Order (BTO) flats;
- Increase the Minimum Occupation Period (MOP) for non-subsidised flats to 5 years; and
Disallow concurrent ownership of both HDB flats and private residential properties within the MOP.
#4. Anyone who owns a Private Property CANNOT purchase a HDB flat, whether New or Resale. If you own a Private Property and purchase a HDB Resale Flat, you need to sell off your Private Property within 6 months.
Note: This will help ensure that buyers purchase HDB flats only when they have the intent of staying in it for long term and ensure equitable treatment for all HDB flat lessees during their MOP. Ownership of private properties by HDB lessees will be allowed after the MOP.