A summary of Singapore’s property cooling measures: 1996 to present day

PRICE stability is one of the pillars of Singapore’s housing policies.

Over the years, the Singapore government has introduced various measures to cool housing prices when they are out of sync with economic fundamentals. Here is a summary of those moves.

Apr 27, 2023: Higher additional buyer’s stamp duty (ABSD) rates, with those for foreign buyers, entities, and trusts doubled

  • Singaporeans buying second property: from 17 to 20%; third or subsequent properties: from 25 to 30%
  • For permanent residents (PRs) purchasing their second property: from 25 to 30%; third or subsequent properties: from 30 to 35%
  • For foreigners buying any residential property: from 30 to 60%
  • For corporate entities and trustees buying residential property: from 35 to 65%

Sep 30, 2022: Borrowing limits tightened; 15-month wait period for private property owners switching to public housing.

Tweaks were made to the benchmark interest rate used to calculate the total debt servicing ratio (TDSR):

  • For residences: increased from 3.5 to 4%
  • For non-housing property: increased from 4.5 to 5%

For HDB flats, a new 3% rate was introduced to work out how much a borrower can handle in loans from HDB – above the prevailing HDB loan rate of 2.6% used in calculations up to this point. The loan-to-value limit for HDB loans was also cut to 80%, from 85%.

Private property sellers now have to wait 15 months before they can buy an HDB resale flat.

Dec 16, 2021: Higher ABSD rates, borrowing limits tightened

  • Singaporeans buying second property: from 12 to 17%; third or subsequent properties: from 15 to 25%
  • For permanent residents (PRs) purchasing their second property: from 15 to 25%; third or subsequent properties: from 15 to 30%
  • For foreigners buying any residential property: from 20 to 30%
  • For corporate entities buying residential property: from 25 to 30%

The TDSR threshold also tightened from 60 to 55%; loan-to-value ratio for HDB loans reduced from 90% to 85%.

Jul 6, 2018: ABSD raised, borrowing limits tightened

ABSD rates increased:

  • For Singaporeans purchasing their second property: from 7 to 12%; for third and subsequent property: from 10 to 15%
  • For PRs purchasing their second and subsequent property: from 10 to 15%
  • For foreigners buying any residential property: from 15 to 20%
  • For corporate entities buying residential property: from 15 to 25%
  • For developers buying for housing development: an additional ABSD of 5%, to be paid upfront

Loan-to-value limits were also tightened by 5 percentage points for all housing loans granted by banks.

For individual borrowers:

  • Taking their first housing loan: from 80 to 75% (or 60 to 55% if the loan tenure exceeds 30 years or extends past when the borrower turns 65)
  • Taking their second housing loan: from 50 to 45% (or 30 to 25% in the aforementioned scenario)
  • Taking their third housing loan: from 40 to 35% (or 20 to 15%, as above)

For non-individual borrowers, the limit was lowered from 20 to 15%.

Jun 29, 2013: Total debt factored into granting of property loans

The TDSR is introduced to limit how much an individual can borrow to buy property. The TDSR takes into account all debt, and this cannot exceed 60% of gross monthly income.

A benchmark interest rate is applied to the TDSR calculation:

  • 3.5% for residential property
  • 4.5% for non-residential property

The Monetary Authority of Singapore also refined rules relating to how existing loan-to-value limits on housing loans are applied, to prevent buyers from circumventing tighter limits on second and subsequent housing loans.

Jan 12, 2013: ABSD raised, borrowing limits tightened

ABSD rates:

  • Introduced for Singaporeans purchasing their second property, at 7%. For third and subsequent property, this was raised from 3 to 10%
  • Introduced for PRs at 5% for their first property; raised from 3 to 10% on their second property and from 3 to 10% on their third and subsequent property
  • Increased for foreigners buying any residential property: from 10 to 15%
  • Increased for corporate entities buying residential property: from 10 to 15%

Changes relating to loan-to-value limits:

  • For individuals getting a second housing loan: 50%, from 60% previously; 30 (previously 40%) if the loan tenure exceeds 30 years or extends beyond the borrower’s retirement age of 65
  • For individuals getting a third or subsequent housing loan: 40%, from 60% previously; 20 (previously 40%) if per above
  • For non-individual borrowers: 20%, from 40% previously
  • Minimum cash down payment for individuals getting a second or subsequent loan raised to 25%, from 10% previously

Oct 6, 2012: New max loan tenure imposed at 35 years, loan-to-value ratios reduced for loans exceeding 30-year tenures

  • This new absolute limit of 35 years was applicable to loans for all residential property, to both individual and non-individual borrowers
  • Also, when refinancing, the period of the new loan plus the number of years since the first loan was granted could not add up to more than 35 years
  • Loan-to-value ratios were also reduced further for individuals whose loans exceed 30 years in tenure, or who will be more than 65 years old when their loans finish up:

- For a borrower with no outstanding property loan: 60%, versus 80 previously
- For a borrower with existing home loans: 40%, from 60 previously

For non-individual borrowers, the loan-to-value ratio were lowered as well to 40%, from 50 previously.

Dec 8, 2011: ABSD introduced

  • Foreigners or corporate entities buying residential property had to pay 10% of its purchase price or market value, whichever is higher
  • Singaporeans buying their third or subsequent properties were charged 3%
  • For PRs, the 3% kicked in from their second property

Jan 14, 2011: Changes to seller’s stamp duty and loan-to-value limits

A seller’s stamp duty is payable for any property sold within four years of purchase at:

  • 16%, if sold within the first year;
  • 12%, if sold within the second year;
  • 8%, if sold within the third year; and
  • 4% if sold in the fourth year of purchase

Changes to loan-to-value limits:

  • Lowered to 60% for individual buyers with existing outstanding housing loans on hand, from 70%
  • A new limit of 50% was imposed for buyers who are not individuals

Aug 30, 2010: Seller’s stamp duty period expanded, restrictions introduced on new loans

  • Seller’s stamp duty was from this point payable for any property sold within three years of purchase, instead of one
  • For property buyers with existing housing loans, the minimum cash downpayment was raised from 5 to 10% and the loan-to-value limit lowered further to 70%

Feb 20, 2010: Seller’s stamp duty reinstated, loan-to-value limit lowered

  • For all residential property and land sold within a year of purchase, 3% of the sale price was payable in stamp duty to the government
  • Banks were only allowed to loan up to 80% of the purchase price to a buyer, from 90% previously

Sep 14, 2009: Schemes that helped support the market are scrapped

To attract people to buy houses and take up loans, banks had previously teamed up with developers to create two products:

  • Interest absorption schemes, allowing home buyers to make only the down payment (usually 20% of the property value) and defer further payments until the home is built; developers pay the bank the interest on the loan until then
  • Interest-only housing loans, which only require the home buyer to begin repaying the principal after a specified period – usually when the unit is completed

Both products, along with measures to support developers, were scrapped.

May 15, 1996: Taxing gains from property sales

In response to people buying and flipping property, the government moved to tax as income:

  • If sold within one year of purchase, 100% of gains;
  • If sold within two years of purchase, two-thirds; and
  • If sold within three years of purchase, a third

Appropriate individual or corporate tax rates were applied for the above.

The buyer’s stamp duty payment was also moved forward to the time of signing the sale and purchase agreement. Before this, it was only payable upon the transfer of the title deed. This allowed speculators to buy and sell property quickly, and avoid paying it.

A seller’s stamp duty was introduced, charged to people selling their homes within three years of purchase.

A loan-to-value limit was introduced for bank loans for housing. This was set at 80% of the cost of the residential property.

Foreigners without permanent residency and non-local companies are not allowed to take Singapore-dollar housing loans.

The above suite of measures was rolled back between November 1997 and July 2005.

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