Thursday, January 24, 2013

Singapore Property Measures - 12 January 2013


Posted this for my reference... Does it really put off those rich people?  I don't think so...

A) Cooling Measures for the Residential Property Market

The following measures will take effect on 12 January 2013:
1. Additional Buyer's Stamp Duty (ABSD) rates will be:
  • Raised between five and seven percentage points across the board.
  • Imposed on Permanent Residents (PRs) purchasing their first residential property and on Singaporeans purchasing their second residential property.
CitizenshipABSD Rate on
1st Purchase
ABSD Rate on
2nd Purchase
ABSD Rate on
3rd & Subsequent
Purchase
Singapore
Citizens
Existing: NA
Revised: NA
Existing: NA
Revised: 7%
Existing: 3%
Revised: 10%
Permanent
Residents
Existing: NA
Revised: 5%
Existing: 3%
Revised: 10%
Existing: 3%
Revised: 10%
Foreigners and nonindividuals
(corporate entities)
Existing: 10%
Revised: 15%
Existing: 10%
Revised: 15%
Existing: 10%
Revised: 15%

2. Loan-to-Value limits on housing loans granted by financial institutions will be tightened for individuals who already have at least one outstanding loan, as well as to non-individuals such as companies. 

3. Besides tighter Loan-to-Value limits, the minimum cash down payment for individuals applying for a second or subsequent housing loan will also be raised from 10% to 25%. 

1st Housing Loan2nd Housing LoanFrom 3rd Housing
Loan
LTV LimitExisting Rules
80%; or 60% if the
loan tenure is more
than 30 years or
extends past age 65

Revised Rules
No change
Existing Rules
60%; or 40% if the
loan tenure is more
than 30 years or
extends past age 65

Revised Rules
50%; or 30% if the
loan tenure is more
than 30 years or
extends past age 65
Existing Rules
60%; or 40% if the
loan tenure is more
than 30 years or
extends past age 65

Revised Rules
40%; or 20% if the
loan tenure is more
than 30 years or
extends past age 65
Minimum
Cash
Down
Payment
Existing Rules
5% (for LTV of 80%)
10% (for LTV of 60%)

Revised Rules
No change
Existing Rules
10%


Revised Rules
25%
Existing Rules
10%


Revised Rules
25%
Non-
Individual
Borrowers
Existing LTV Limit
40%

Revised LTV Limit
20%

B) Cooling Measures Specific to Public Housing

1. Tighter eligibility for loans to buy HDB flats:
  • MAS will cap the Mortgage Servicing Ratio (MSR) for housing loans granted by financial institutions at 30% of a borrower's gross monthly income.
  • For loans granted by HDB, the cap on the MSR will be lowered from 40% to 35%.
2. PRs who own a HDB flat will be disallowed from subletting their whole flat. 

3. PRs who own a HDB flat must sell their flat within six months of purchasing a private residential property in Singapore.

4. An additional measure will take effect on 1 July 2013 to tighten the terms for granting HDB loans and the use of CPF funds for the purchase of HDB flats with remaining leases of less than 60 years. 

Remaining
Lease
of HDB Flat
Use of CPF fundsHDB Housing Loan
> 60 yearsAllowed based on current
policy, i.e. status quo.
Allowed based on current
policy, i.e. status quo.
30 to 59 yearsAllowed, 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 prorated
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 yearsNot 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 yearsNot allowed.No HDB housing loan.

C) Cooling Measures for Executive Condominium Developments

The following SSD rates will be imposed on industrial properties and land bought and sold within three years of the date of purchase: 

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. This is in line with the treatment of balconies under URA's current guidelines. 

D) Cooling Measure for the Industrial Property Market: Seller's Stamp Duty

The following SSD rates will be imposed on industrial properties and land bought and sold within three years of the date of purchase: 

a) SSD at 15% if the property is sold in the first year of purchase, i.e. the property is held for one year or less from the date of purchase 

b) SSD at 10% if the property is sold in the second year of purchase, i.e. the property is held for more than one year and up to two years from the date of purchase. 

c) SSD at 5% if the property is sold in the third year of purchase, i.e. the property is held for more than two years and up to three years from the date of purchase. 

Sources : Monetary Authority of Singapore (MAS)

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