Acerca de
Property Cooling Measures
Foreword
You may have heard of some acronyms used when reading real estate news, such as ABSD and BSD. The Singaporean government watches the property market closely to ensure stability and would often impose new rules to curb any significant changes in the market.
When the property market is overheating, it means that the demand for properties is exceeding the supply. In order to reduce the demand, the Singapore government would therefore implement property cooling measures.
Here are some property cooling measures you ought to know to make wise decisions when purchasing properties in Singapore.
1. Buyer's Stamp Duty (BSD)
This is a tax on the documents for the transfer or sale and purchase of properties in Singapore. BSD will be computed on the purchase price as stated in the document to be stamped or market value of the property (whichever is higher).
2. Additional Buyer's Stamp Duty (ABSD)
This is a tax on second and subsequent property purchases. The tax would differ depending on whether you are a Singaporean citizen, permanent resident or a foreigner.
3. Total Debt Servicing Ratio (TDSR)
This is the portion of a borrower's gross monthly income that goes towards repaying the monthly debt obligations, including the loan being applied for.
4. Seller's Stamp Duty (SSD)
This is tax on all residential properties or land that are acquired and disposed of during the holding period.
This starts at 12% if sold in the 1st year of purchase, 8% in the 2nd year, and 4% in the 3rd year.
5. Mortgage Servicing Ratio (MSR)
This is a tax on HDBs and ECs and it refers to the portion of a borrower's gross monthly income that goes towards repaying all property loans, including the loan being applied for. MSR is capped at 30% of a borrower's gross monthly income.
6. Tightening of Loan-To-Value (LTV) Limits
This determines the maximum amount of funds you can borrow and hence, how much downpayment you need to pay upfront in cash and/or CPF OA savings.