New Measures To Cool Property Market 30 August

[Warrior88 0]

SINGAPORE: The government said Monday that it will increase the holding period for imposition of Seller's Stamp Duty (SSD).

The SSD will be raised from the current one year to three years.

Another measure will impact those who have more than one outstanding housing loan.

Property buyers who already have one or more outstanding housing loans at the time of the new housing purchase will have to pay more money upfront.

The government will increase the minimum cash payment from five per cent to 10 per cent of the valuation limit.

Those with more than one outstanding housing loan will also see a decrease in the Loan-to-Value (LTV) limit for housing loans granted by financial institutions regulated by MAS.

The LTV will be lowered from the current 80 per cent to 70 per cent.

The measures will take immediate effect on August 30.

The government said the objective of the measures is "to ensure a stable and sustainable property market where prices move in line with economic fundamentals".

It noted that the property market is currently very buoyant, with prices increasing by 11 per cent in the first half of this year.

It added that while Singapore has enjoyed strong economic growth in the first half, growth is expected to moderate in the second half of the year.

Should economic growth falter and the market correct, the government said property buyers could face capital losses.

It has thus decided to introduce additional measures now to temper sentiments and encourage greater financial prudence among property purchasers.

-CNA/wk

[blue_skies 3]

Made a typo in my subject heading.

Actually the LTV limit of 70% will only affect those with more than one outstanding housing loan.

So frustrating. New rules every couple of months.

[therat 18]

This is long overdue.

They should react long time ago.

I thought Mr Mah say.. the price is OK..

Market not hot.

House enough

etc

NOW.. story line change again.

National rally has nothing to say. So must keep this until then?

[neubie 2]

1 The Government announced today the following measures to maintain a stable and sustainable property market:

Increase the holding period for imposition of Seller’s Stamp Duty (SSD) from the current one year to three years.

For property buyers who already have one or more outstanding housing loans1 at the time of the new housing purchase:

Increase the minimum cash payment from 5% to 10% of the valuation limit2; 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%.

The measures will take immediate effect on 30 August 2010.

2 The Government's objective is to ensure a stable and sustainable property market where prices move in line with economic fundamentals. The property market is currently very buoyant. While the rate of price increase of private residential properties has moderated in the last 3 quarters, prices have still increased significantly by 11% in the first half of 2010, and price levels have now exceeded the historical peak in the second quarter of 1996.

3 While Singapore has enjoyed strong economic growth in the first half of 2010, our economic growth is expected to moderate in the second half of the year. There are also still uncertainties in the global economy. Should economic growth falter and the market corrects, property buyers could face capital losses, with implications on their own finances and the economy as a whole. Moreover, the current low global interest rate environment will not continue indefinitely, and higher interest rates could have severe implications for buyers who have overextended themselves. Therefore, the Government has decided to introduce additional measures now to temper sentiments and encourage greater financial prudence among property purchasers.

Extending the Holding Period for Imposition of Seller’s Stamp Duty (SSD) on Residential Properties Sold from 1 Year to 3 Years

4 The Government imposed in February 2010 a seller’s stamp duty (SSD) for sellers who buy residential properties3 on or after 20 February 2010 and sell them within a year of purchase.

5 For residential properties bought4 on or after 30 August 2010, SSD will be imposed if these properties are sold within three years of purchase. Specifically, the SSD levied on residential properties will be revised to 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% for the first $180,000 of the consideration, 2% for the next $180,000, and 3% 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.

No SSD will be payable by the vendor if the property is sold more than 3 years after it was bought. Please see Annex for examples of how the SSD will be computed.

6 The extended SSD will not affect HDB lessees as the required Minimum Occupation Period for HDB flats is at least 3 years.

7 IRAS will be releasing an updated e-tax guide on the circumstances under which SSD will apply and the procedures for paying SSD. The e-tax guide will be available at www.iras.gov.sg. Taxpayers with enquiries may call IRAS at 6351 3697 or 6351 3698.

Increase the Minimum Cash Payment from 5% to 10% of the Valuation Limit for Property Purchasers with one or more outstanding Housing Loans

8 Previously, property buyers have to make cash payment of at least 5% of the valuation limit5. With effect from 30 Aug 20106, the cash payment is increased from 5% to 10% of the valuation limit7. This measure is applied only to buyers of private residential properties, Executive Condominiums, HUDC flats and HDB flats (including those under the Design, Build and Sell Scheme, or DBSS flats) who are taking housing loans from financial institutions regulated by MAS and who already have one or more outstanding housing loans at the time of applying for a housing loan for the new property purchase.

Decrease the LTV limit for housing loans granted by financial institutions regulated by MAS from the current 80% to 70% for Property Purchasers with one or more outstanding Housing Loans

9 The LTV limit is lowered from 80% to 70% with effect from 30 Aug 20108 for borrowers who have one or more outstanding housing loans (whether from HDB or a financial institution regulated by MAS) at the time of applying for a housing loan for the new property purchase. Borrowers who do not have any outstanding housing loans continue to have an LTV cap of 80%. These rules apply to housing loans granted by financial institutions for private residential properties, Executive Condominiums, HUDC flats and HDB flats (including DBSS flats).

10 Loans granted by HDB for HDB flats (including DBSS flats) will still have an LTV cap of 90%. HDB loans are offered to eligible first-time flat buyers and second-timers who are right-sizing their flats to meet their housing needs. They are required to utilise all of their CPF Ordinary Account balance before HDB loans will be granted. Furthermore, those taking a second concessionary HDB loan must use the CPF refund and 50% of the cash proceeds from the sale of their previous flat before they are granted an HDB loan. This is in line with HDB's home ownership policy of helping eligible buyers, especially first-time buyers, purchase public housing in a financially prudent manner.

11 Financial institutions' lending standards have remained prudent and the asset quality of housing loans has stayed robust, with the non-performing loans ratio at less than 1% as at Q2 2010. Nonetheless, there are signs that more housing loans are originating at higher LTV bands of above 70%. In line with the objective of ensuring a stable and sustainable property market, lowering the LTV limit sends a clear signal to financial institutions to maintain credit standards, and encourages greater financial prudence among property purchasers already servicing one or more outstanding housing loans.

Adequate Supply in the Pipeline

12 The Government will also continue to ensure that there is adequate supply of housing to meet demand. In the second half 2010 GLS Programme, we have made available sites that can yield about 13,900 private housing units, of which about 8,100 units will be from sites on the Confirmed List. This is the highest potential supply quantum in the history of the GLS Programme. We will inject an even larger supply of private housing in the first half 2011 GLS Programme, if demand continues to be strong.

13 Apart from the supply from the GLS Programme, there are also 61,800 uncompleted units of private housing from projects in the pipeline as at 2Q20109. Of these, 32,600 units were available or could be made available for sale. These comprised units that had been launched for sale by developers, units that had pre-requisite conditions for sale10 and which could be launched for sale immediately, as well as units with planning approvals for which pre-requisite conditions for sale could be obtained quickly from the Government and made available for sale11.

14 The Government will continue to monitor the property market closely and will introduce additional measures if required later, to promote a stable and sustainable property market.

[blue_skies 3]

I am in the process of selling my private ppty. Now thinking about the implications and wondering if I should just hold on instead coz I also just bought a HDB.

[bepgof 20]

I sort of anticpated these already, but expected only after GE. I've mentioned earlier, THG also keyed in those "variables" into the simulator and know the possible effects of each variable.

Just to share: quotes from Agent trainer, Mr. Sam Gian:

A CROUCHING TIGER in business is someone with huge potential and will one day take the market by storm.

- Plenty of business opportunities in the new home segment and HDB resale segment.

- Opportunities hidden rather than displayed openly.

- What you need is the basic knowledge and skills.

Edited August 30, 2010 by bepgof

[Warrior88 0]

If you sellyour pte now. You cannot buy until MOP for your realse flat.

5 years ? so long.. see dream home also cannot buy ?

Getting sick.... thought of selling my resale, tie here tie there.

But, new rule start, cannot also get out, only after 5 years. Both way die .. Haiz

[Warrior88 0]

I sort of anticpated these already, but expected only after GE. I've mentioned earlier, THG also keyed in those "variables" into the simulator and know the possible effects of each variable.

Just to share: quotes from Agent trainer, Mr. Sam Gian:

A CROUCHING TIGER in business is someone with huge potential and will one day take the market by storm.

- Plenty of business opportunities in the new home segment and HDB resale segment.

- Opportunities hidden rather than displayed openly.

- What you need is the basic knowledge and skills.

Bro, you fast hand fast leg... bought the TG, otherwise you kena the SSD for 3 years sub sale.

Also, you cannot buy the TG,FV ... can see only for a long time

[therat 18]

Bro, you fast hand fast leg... bought the TG, otherwise you kena the SSD for 3 years sub sale.

Also, you cannot buy the TG,FV ... can see only for a long time

that's why I say he very super heng

The MOP , SSD 3 yrs all miss.

But the most important is the 70% loan (was 80%) and 10% cash deposit (was 5%)

He can save 15% cash.

super heng

[neubie 2]

so if i were to fully redeem my hdb and buy a 2nd property, will this 10% d/p and LTV affect me?

[Warrior88 0]

so if i were to fully redeem my hdb and buy a 2nd property, will this 10% d/p and LTV affect me?

I don't think so. But the MOP still stay if yours is realse HDB

[sporty 0]

If you sellyour pte now. You cannot buy until MOP for your realse flat.

5 years ? so long.. see dream home also cannot buy ?

Getting sick.... thought of selling my resale, tie here tie there.

But, new rule start, cannot also get out, only after 5 years. Both way die .. Haiz

Why is there a need to wait until MOP then can buy?

[Warrior88 0]

Why is there a need to wait until MOP then can buy?

Currently, buyers of subsidised HDB flats are not allowed to own a private residential property within the 5-year MOP. On the other hand, buyers of non-subsidised flats can concurrently own a private residential property during the MOP, as long as they live in the HDB flat. Private property owners can also buy non-subsidised flats while concurrently owning their private residential properties, provided they live in the HDB flat during MOP. There is therefore disparity in treatment amongst the different groups during their MOP.

[therat 18]

so if i were to fully redeem my hdb and buy a 2nd property, will this 10% d/p and LTV affect me?

Don't think so. It say it is for those who has existing loan.

[Warrior88 0]

so if i were to fully redeem my hdb and buy a 2nd property, will this 10% d/p and LTV affect me?

So, 1 way to fully redeem either one, before proceed to the next if you are cash tight, but cpf rich