Summary of URA’s New Regulations on Singapore Property Market

The recent measures on 14 Jan 2011 imposed by the Singapore government had taken to ensure that the property market is sustainable has been pretty drastic.  Check out the new regulations here.

 

A Summary of URA’s regulations:

1. Holding Period for Seller’s Stamp Duties from 3 years to 4 years

2. Seller’s Stamp Duties imposed on properties bought after 14 Jan 2011:

– properties that are sold within:

  • 0 – 1st Year of Purchase: 16% of selling price
  • 1st – 2nd Year of Purchase: 12% of selling price
  • 2nd – 3rd Year of Purchase: 8% of selling price
  • 3rd – 4th Year of Purchase: 4% of selling price
  • after 4th Year of Purchase: 0%

3. Loan to Value (LTV) limit on housing loan granted by financial institutions regulated by MAS for residential property purchasers who are not individuals is lowered to 50%.

“With effect from 14 January 20117, an LTV limit of 50% will apply to all residential property purchasers who are not individuals. This includes corporations, trusts and collective investment schemes, among others. The 50% LTV limit for housing loans will also apply to joint property purchases by an individual and a purchaser who is not an individual.

‘Purchasers who are not individuals’ refer to purchasers who are not natural persons.  These include but are not limited to corporations, trusts and collective investment schemes.

The 50% LTV limit will apply to transactions where the date on which the option to purchase (OTP) was granted falls on or after 14 January 2011; or if there is no OTP, where the date of the Sale & Purchase agreement falls on or after 14 January 2011. ” Source: URA

4. LTV limit on housing loans granted by financial institutions regulated by MAS lowered from the current 70% to 60% for residential property purchasers who are individuals with one or more outstanding housing loans at the time of the new housing purchase.

– effective from 14 Jan 2011

– for borrowers who are individuals and 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.

However , for housing loans granted by financial institutions for private residential properties, Executive Condominiums, HUDC flats and HDB flats (including DBSS flats):

– borrowers who can show evidence that they have sold their existing properties will not be subject to the lower LTV limit when they buy a new property.

– If existing property is a private property, he can show a signed Sale & Purchase (S&P) agreement with the IRAS certificate showing that stamp duty has been paid on it.

– If the existing property is a HDB flat, he can show HDB’s approval letter to sell the flat, that HDB will issue within 2 weeks of the First Appointment.

– These borrowers will still be able to borrow at an 80% LTV from financial institutions.

– Borrowers without any outstanding housing loans continue to have a LTV cap of 80%.

 

Loans granted by HDB for HDB flats (including DBSS flats) will still have a LTV cap of 90%.

– HDB loans are offered to eligible Singapore citizens buying their first homes or right-sizing their flats to meet their housing needs.

– HDB loan applicants are required to utilise all the balance in their CPF Ordinary Account before HDB loans will be granted.

– 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 to ensure that eligible buyers, especially first-time buyers, purchase public housing in a financially prudent manner.

 

Additional Information:

  1. The date of purchase for computation of the holding period for SSD shall be the date when a buyer (i.e. Buyer A) exercises the option to purchase the property, or signs the sale and purchase agreement, whichever is earlier. The date of sale of the property shall be the date when the subsequent buyer (i.e. Buyer B) exercises the option to purchase the property from Buyer A, or signs the sale and purchase agreement, whichever is earlier.
  2. SSD is to be paid within 14 days of the execution of the Agreement (i.e. exercise of Option or signing of Agreement). If the Agreement is executed overseas, upon receipt of the Agreement in Singapore, the SSD must be paid within 30 days.
  3. The 50% LTV limit will apply to transactions where the date on which the option to purchase (OTP) was granted falls on or after 14 January 2011; or if there is no OTP, where the date of the Sale & Purchase agreement falls on or after 14 January 2011.
  4. The 60% LTV limit will apply to transactions where the date on which the option to purchase (OTP) was granted falls on or after 14 January 2011; or if there is no OTP, where the date of the Sale & Purchase agreement falls on or after 14 January 2011.

Source: URA

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