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7th Property Cooling Measures for Residential & Industrial Properties

ADDITIONAL MEASURES TO ENSURE A STABLE AND SUSTAINABLE PROPERTY MARKET

Below is a detailed illustration for the additional property cooling measures announced by the government on 11th Jan, 2013.

The Government announced a comprehensive package of measures to cool the residential property market. It also introduced a Seller’s Stamp Duty on industrial properties for the first time, to discourage speculative activity in the industrial market.

Issued by the Ministry of Finance, Ministry of National Development, Monetary Authority of Singapore and Ministry of Trade & Industry

Source: The Straits Times

11 JANUARY 2013

Measures to take effect on or after 12th Jan, 2013:

The new ABSD structure (Residential Property) is as follows:

  • Singaporean first-time buyers and Singaporean buyers of HDB flats will not be ­affected by the new measure.
  • For purchases made jointly by two or more parties, the higher applicable ABSD rate will be imposed.

 

Lowering the Loan-to-Value (LTV) Limit and Raising the Minimum Cash Down Payment on Housing Loans Granted by MAS-Regulated Financial Institutions. 

Purchase of Private Residential Property

LTV Limit:

  • A borrower will not be subject to the lower LTV limit and higher minimum cash down payment requirement when he obtains another housing loan for the purchase of a property which is an Executive Condominium (EC) purchased directly from a property developer or a HDB flat.

 

Measures Specific to Public Housing

New Mortgage Servicing Ratios (MSRs) for Loans for the Purchase of New or Resale HDB Flats

Cut-off dates for implementation of revised MSR limit at 35% of borrower’s gross monthly income for HDB loans

  • MAS will set an MSR limit of 30% for loans granted by MAS-regulated financial institutions for the purchase of HDB flats.

 

PRs owning HDB Flats Disallowed from Subletting their Whole Flat

Currently, a PR flat owner can sublet his whole flat after meeting the minimum occupation period (MOP). From 12 January 2013, PR households will be disallowed from subletting their whole flat. This will apply to existing PR households owning an HDB flat and PR households who intend to buy resale flat. PR households will continue to be able to sublet rooms.

 

PRs owning HDB Flats Must Sell their Flat after Purchase of Private Residential Property in Singapore

Currently, PR households can retain their flats and invest in private residential property after meeting the MOP for their flats.

From 12 January 2013, PR households must dispose of their HDB flats within six months of purchasing a private residential property in Singapore. PR households who had earlier been allowed by HDB to own a private residential property in Singapore prior to 12 January 2013 will not be required to sell their HDB flats. However, if they buy another private property in Singapore on or after 12 January 2013, they must sell their HDB flats.

 

Disposal of existing HDB flat upon purchase of private property
in Singapore by PR households

 

 

Use of CPF Funds and Provision of HDB Loans
for Purchase of Public Housing

 

Measures for Executive Condominium Developments

The following measures will take effect on 12 January 2013:

  1. The maximum strata floor area of new EC units will be capped at 160 square metres.
  2. Sales of new dual-key EC units will be restricted to multi-generational families only.
  3. 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.
  4. 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.

 

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:

  1. 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.
  2. 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.
  3. 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.
  4. 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.
  • These SSDs will apply for industrial properties and land bought on or after 12 January 2013.

 

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To your investment success,

Gerald Tay

 

 

 

 


About the Author

Gerald Tay Author, entrepreneur, professional investor and loving father, runs crei-academy.com with a tongue-in-cheek approach to property investment - and himself. He is widely regarded in the industry as 'The Common-Sense' Investor. Gerald writes with passion and straight-forwardness, disclaiming wild claims and impractical investment strategies behind lies and ignorance pervasive in the property industry for vested interests. His well-known statement, "All I did is to value my investments with science, logic and common sense.'

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