Revised ABSD and LTV Overview
Singapore: Government announced today 5 Jul 2018 on adjustment to Additional Buyer Stamp Duty and Loan to Limit Value in an attempt to cool the property market after prices rose sharply by 9.1% over the past year. Prices has decline since 2013 when government first implemented Additional Buyer Stamp Duty in 2013 on top of the normal buyer stamp duty and only started reverse in trend in end of 2017 as property picked up in term of property prices and volumes.
The sharp rise in property prices if left unattended could risk destabilising and run ahead of economic fundamentals with strong supply of housing supply and rising interest rate.
Singapore Citizen (SC) and Singapore Permanent Resident (SPR) buying first residential property will not be affected. Other individuals owning 2 or more properties and entities will incur an additional 5% and 10% for entities respectively. There will also be an additional 5% for property developers buying residential properties for housing development.
For property purchase by joint partnership with different profiles, the ABSD rate will be based on the highest applicable ABSD Rate.
In the event of ABSD remission, married couple with at least one Singaporean can appeal for ABSD refund when they sold off their first residential property, normally within 6 months after the project TOP or date of purchase of the 2nd property, whichever that is earlier.
In the event of transitional provision cases with option granted before 5 Jul 2018, the old ABSD rate remains and the option have to be exercised before 26 July 2018 or to validity period of the OTP date, whichever earlier apply.
Revised ABSD Rate for Residential Property
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Revised LTV Limit of Housing Grants
Loan to Value (LTV) is tightened by financial institutions for housing loans by 5%. This is only applicable to private property and does not apply to HDB.
This revised tightening will be applicable for options that are dated on or after 6 July 2018.
Loan to Value (LTV) limits of mortgage equity withdrawal loans (MWLs) will be revise as follows:
- Loan of up to 75% for borrower without existing outstanding residential property loan
- Loan of up to 45% for borrower with existing outstanding residential property loan
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