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The latest round of residential property cooling measures effective from 16 December 2021 – Part One

This is the first part of a two-part article on the recent residential property cooling measures implemented by the government to put some brakes on the heating residential property market in Singapore.

The latest round of property cooling measures effective from December 16, 2021 was introduced by the government to put some brakes on the heating property market in Singapore.

Although most people will have to agree that there were clear signs that the market was heating up, the timing of the new measures was unexpected and the gap between their announcement and their implementation – a mere 25 minutes – was even more unexpected.

For buyers of residential property, the new measures include the following:

  1. higher Additional Buyer’s Stamp Duties (ABSD);
  2. lower Loan-To-Value (LTV) limit; and
  3. lower Total Debt Servicing Ratio (TDSR).

Additional Buyer’s Stamp Duties

ABSD is levied on buyers who purchase residential property.

The new cooling measures impose a flat 30 percent tax on foreign buyers for any residential property (up from 20 percent).

There has been no change for Singapore citizens (0 percent ABSD) and permanent residents (5 percent ABSD) buying their first property.

With the new measures Singapore citizens will now have to pay 17 percent (up from 12 percent) for a second residential property and 25 percent (up from 15 percent) for a third and subsequent properties. PRs on the other hand will now have to pay 25 percent (up from 15 percent) for a second residential property and 30 percent (up from 15 percent) for a third.

Entities (company or association) are looking at 35 percent ABSD (up from 25 percent) plus 5 percent non-remissible if the entity is a housing developer and the ABSD deadline is five years regardless of the size of the development.

Read part two of this article which covers the recent changes to the Loan-To-Value Limit, the Total Debt Servicing Ratio and the views of analysts about their impact on the market.

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