INVEST IN SINGAPORE PROPERTY OR RENT ONE
There are many factors to consider whether to buy or rent a house. If you are a foreigner, you may be tempted to buy a house.
For own stay, you need to first like the place then you are buying. You need to be emotional and you need the house to “talk to you”, you need to feel good about the place. If you are buying for investment, you need to be as unemotional as possible. It’s all about safety, yield and capital appreciation.
Everyone needs a roof over their heads. Hence a residential home is first and foremost a consumption.
By Property Buyer Mortgage Brokers
When you rent a house
When you rent a house, you pay rent, rental stamping fee and some routine maintenance.
When you buy a house
When you buy a house, you pay interest costs for the housing loan, property tax, maintenance and repairs and many other associated costs.
Should you buy a house or Rent a house?
Let us examine the cost of renting a house versus that of owning a house.
There are of course price considerations. Timing is quite important as well as negotiation skills. Most people are disadvantaged when they deal with property agents alone.
RENTING COST
As the cost of renting a house will also change over time, we have factored in a +/- 30% renting cost so that you can compare the relative cost and hence savings.
WILL YOU SAVE MONEY THROUGH BUYING A HOUSE?
Assume you will now buy a house at Park Infinia at Wee Nam say at $1666 per square feet. How much will you save?
We worked out a few interest rates scenario and it’s various yearly housing cost.
We also worked out the rental costs over a 3 years period on both high, low and current scenario.
Rental Cost over 3 years (Ignoring time-value of money)
If you have a 3 to 5 years horizon, let’s say you sit out of the market for 3 years, this will be your cost over 3 years.
Current: 3 x $67,142 = $201,426
+30% : 3 x $85,844 = $257,532
-30%: 3 x $48,439 = $145,317
Cost of Buying a House over 3 years
If you are buying a house, let’s assume a 3 year horizon. Based on repayment, the amount will be almost the same as renting a place.
The cost over 3 years using various interest rates: -
Based on 1.5%: 3 x $31,278 = $ 93,834
Based on 2.5%: 3 x $44,622 = $134,064
Based on 3.5%: 3 x $57,966 = $173,898
Savings From buying a house versus renting (3 year horizon)
Rental cost Current price: 3 x $67,142 = $201,426
Housing loan cost
Based on 1.5%: 3 x $31,278 = $ 93,834
Based on 2.5%: 3 x $44,622 = $134,064
Based on 3.5%: 3 x $57,966 = $173,898
Savings from buying a place ranges from $27,528 to $107,592.
Based on 1.5%: $201,426 - $93,834 = $107,592
Based on 2.5%: $201,426 - $134,064 = $ 67,362
Based on 3.5%: $201,426 - $173,898 = $ 27,528
So it would seem that there will definitely be savings from buying a house compared to renting. Is that really the case?
If all property prices stayed stagnant, that would definitely be the case. However, prices of properties tend to fluctuate.
As you can see from the above chart that, if you buy at a wrong time, the difference can be easily a $321 psf difference within a 1 year period.
In other words, a 1001 sq feet condo would cost you $321,321 more.
Your savings ranging from $27,528 to $107,592 would be wiped out by getting in at a wrong price by overpaying $321,321.
Therefore, when property agents tell you it's cheaper to buy a house than renting, it's only half the story.
The other half of the story is still about buying at the right price, obviously this half, they don't want you to know.
Please note:
Calculations ignore time-value of money as well as the opportunity cost of sum of money repaid through principle repayment.
About Property Buyer Contact Property Buyer
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We are a Research-focused Singapore Mortgage Consultant which helps you compare Singapore Home loans either for new home loans or Singapore Mortgage refinance home loans, we balance risks versus rewards for each home loan to match your risk profile and financing needs.
Not Simply Cheap, but what Fits. We Research, You Save!
Tel: 6100 - 0608
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Career at Property Buyer
Thursday, October 28, 2010
Friday, October 8, 2010
Invest in Singapore Property: Regulation and analysis
ANALYSIS of Singapore Government Property Regulation
Commenting on the 30th Aug 2010 Property regulation
http://www.propertybuyer.com.sg/articles/regulation/singapore-property-regulation-30th-aug-2010/
Due to a mis-alignment in supply and demand from insufficient HDB flats in the year from 2006 to early 2010 HDB prices have shot upwards. We cannot help but be critical of the Singapore government as we feel this is a major mistake and causes untold hardships on first time property buyers and raises the cost of housing via raising land prices. We can only see one beneficiary, the Singapore government land sales program.
Using regulation to constrict demand is a Brute force mechanism. Of course regulation can stop some demand by curbing affordability, limiting access to credit or by stopping some Permanent residents (PR) from buying property in singapore. A more severe regulatory environment can even kill growth. But all these are necessary as most electorate stays in HDB flats and government must be seen to control rampant HDB price rises.
HDB has repeatedly clarified that they have a very sophisticated way to measure demand and therefore build houses, but these explanations while it seems like there are some logic, is illogical and out of touch with the reality.
Supply and demand is easy enough in a Country such as Singapore. Therefore we can only conclude that the Singapore government wants to maximise land productivity as Minister Mentor has mentioned.
Maximising land productivity means you can expect the singapore government to get the most out of you by selling you the land. This is our interpretation.
Demography
Just take a look at the statistics and our conclusion is still that supply and demand has been misaligned. Someone must have fallen asleep on the job.
From the year 2006 to 2010, the population (mainly from immigration) grew from 4.4014m to 5.0767m (http://www.singstat.gov.sg/stats/themes/people/hist/popn.html).
This is a massive increase 675,300 people in less than 4 years. A more than 15% increase in population. Not even a big country like America who has more than 300m population takes in so much people.
HDB flats built numbers are extremely elusive. We wonder why don’t HDB put these data in one place on the website.
From 2006 to 2007 – HDB built 4628 units (Adapted from Source: http://tankinlian.blogspot.com/2010/01/hdb-flats-and-population-growth.html)
From 2007 to 2008 – HDB built 1472 units (Adapted from Source: http://tankinlian.blogspot.com/2010/01/hdb-flats-and-population-growth.html)
From 2008 to 2009 – HDB built 8400 units
(“The Build-To-Order (BTO) system constitutes the main supply of new flats. HDB has to date launched about 5,000 of the planned supply of 8,400 Build-To-Order (BTO) flats for 2008.” source: http://www.hdb.gov.sg/fi10/fi10296p.nsf/PressReleases/82A850D8E04A77C8482574EC001188EC?OpenDocument)
From 2009 to 2010 – HDB built 13,500 units (http://www.hdb.gov.sg/fi10/fi10296p.nsf/PressReleases/78746BAD770849794825768C00147042?OpenDocument)
For 2010 – estimated HDB built flats are 16,000 to 22,000.
(Source: http://www.hdb.gov.sg/fi10/fi10296p.nsf/PressReleases/895204E2295BDC394825778E007FA919?OpenDocument)
Total HDB units built between 2006 to 2010 (estimated)
2006 - 4624 units
2007 – 1472 units
2008 – 8400 units
2009 – 13,500 units
2010 – 16,000 to 22,000 units
= 43,996 to 49,996 units
Total population increase = 675,300
Assume that 80% of these population growth stays in HDB or will eventually buy HDB.
80% of 675,300 = 540,240
With an average household size of 3.5 (Singstat figures for Singapore's household size). We do accept that foreigners can have a different household size, but this is simply an estimate.
The total HDB units demand is estimated to be 540,240 / 3.5 person per household = 154,354 HDB units of demand.
154,354 HDB units of estimated demand and only 43,996 units built.
HDB SHORTAGE = 110,358 units (Estimated).
It is precisely this shortage to fulfill latent HDB demand that fuels crazy HDB prices rise. And do bear in mind, there is a 2 years lag in building HDB, therefore the shortage is real.
In another words, part of the price rise is not bubble, but an actual acute shortage of HDB flats due to an imbalance created by HDB.
What about Property Supply in the Private Residential segment?
According to MAS, there is adequate supply in the pipeline. There is a pipeline of 75,700 units (61,800 as at 2Q2010 and 13,00 from Government land sales GLS programmes) available with 32,600 available or could be made available for sale. (Appendix 2)
Possible End result of this new Singapore property regulation
This new property regulation is nonetheless a move in the right direction and will lead to less speculation.
And since Private property dwellers will no longer be able to buy HDB flats, this will relieve pressures on HDB flats from rising too fast.
But the latent demand is real. Even if all these people that need HDB housing are not buying, they will be renting. The rental yields will rise and therefore lead to HDB price rise.
Some of the HDB dwellers will sell out and then upgrade to Private residential housing.
By constricting HDB flat supply and then creating more Private residential supply, if this was intended, this indicate that the Singapore government was intending on upgrading it’s citizens towards private residential housing.
The bulk of Singaporean heartland residents who stays in HDB or aspire towards owning a HDB will suffer. As HDB prices rise and closes the gap with private housing, newly wed couples will have a hard time to afford to buy even a HDB given that HDB is priced based on a market subsidy.
What is a HDB market subsidy?
HDB publishes financial statements, but they cannot be easily understood, let us just attempt to make some assumptions here based on our best understanding. You can go to this link to understand more about the financial report. http://theonlinecitizen.com/2009/11/hdb-annual-report-deficit-has-doubled-%E2%80%93-really/)
We read the financial report and we have a big headache understanding what they say.
After looking very hard, we have compiled the HDB flats supply here for you.
An example of market subsidy, the price of a resale flat is $350,000. And for first time buyers, you get a subsidy of $30,000. HDB sells you a HDB flat for $350,000 - $30,000 = $320,000. That $30,000 is a market subsidy, but that is not real money, it is simply a discount.
If the price of the flat in the resale market rises to $420,000, HDB will sell corresponding new flats in similar location at $420,000 - $30,000 = $390,000.
Say the cost of building an HDB flat is $100,000 per unit. And the price in the market is now $420,000. Then HDB could buy the land from another government body for $320,000. Add $100,000 to the construction cost, you will arrive at the selling price of $420,000. Since HDB sells you at only $390,000 HDB technically lose money.
But of course, the money would have gone into the Singapore government’s coffers via another government agency which holds the land.
Therefore HDB really did lose money subsidizing the citizens, but on the overall, the government ends up with increased prices for the land which HDB sits on.
Call it land productivity or whatever terminology. The end result is a fairly regulated and micro-managed property market in Singapore whereby the heartland Singaporeans are increasingly marginalized in the name of profits.
And for those who can afford more, the government is moving the population into a higher consumption bracket. We believe this is to create consumption or to suck up excess liquidity.
APPENDIX 1 - HDB supply of New HDB flats in 2010
“HDB will be offering more than 16,000 new flats in 2010. If demand remains strong, HDB is prepared to launch up to 22,000 new flats in 2011. These numbers are substantial. Over two years, HDB will offer more new flats than the total flats in Toa Payoh town today (35,400 flats).
In addition, HDB will release more land for tender in 2010 to yield an estimated supply of 3,000 DBSS 1 flats and 4,000 ECs. In 2011, HDB will release land sites for another 4,000 DBSS flats and 4,000 ECs, if demand is sustained. This injection of 7,000 DBSS flats and 8,000 ECs over two years is also significant. In comparison, 4,000 DBSS flats and 10,000 ECs have been launched for public sale so far.”
(Source: http://www.hdb.gov.sg/fi10/fi10296p.nsf/PressReleases/895204E2295BDC394825778E007FA919?OpenDocument)
Appendix 2 - Adequate Private Supply in the Pipeline
“12 The Government will also continue to ensure that there is adequate supply of housing to meet demand. In the second half 2010 GLS Programme, we have made available sites that can yield about 13,900 private housing units, of which about 8,100 units will be from sites on the Confirmed List. This is the highest potential supply quantum in the history of the GLS Programme. We will inject an even larger supply of private housing in the first half 2011 GLS Programme, if demand continues to be strong.
13 Apart from the supply from the GLS Programme, there are also 61,800 uncompleted units of private housing from projects in the pipeline as at 2Q20109. Of these, 32,600 units were available or could be made available for sale. These comprised units that had been launched for sale by developers, units that had pre-requisite conditions for sale10 and which could be launched for sale immediately, as well as units with planning approvals for which pre-requisite conditions for sale could be obtained quickly from the Government and made available for sale11.”
(source: http://www.mas.gov.sg/news_room/press_releases/2010/Measures_to_Maintain_a_Stable_and_Sustainable_Property_Market.html )
Commenting on the 30th Aug 2010 Property regulation
http://www.propertybuyer.com.sg/articles/regulation/singapore-property-regulation-30th-aug-2010/
Due to a mis-alignment in supply and demand from insufficient HDB flats in the year from 2006 to early 2010 HDB prices have shot upwards. We cannot help but be critical of the Singapore government as we feel this is a major mistake and causes untold hardships on first time property buyers and raises the cost of housing via raising land prices. We can only see one beneficiary, the Singapore government land sales program.
Using regulation to constrict demand is a Brute force mechanism. Of course regulation can stop some demand by curbing affordability, limiting access to credit or by stopping some Permanent residents (PR) from buying property in singapore. A more severe regulatory environment can even kill growth. But all these are necessary as most electorate stays in HDB flats and government must be seen to control rampant HDB price rises.
HDB has repeatedly clarified that they have a very sophisticated way to measure demand and therefore build houses, but these explanations while it seems like there are some logic, is illogical and out of touch with the reality.
Supply and demand is easy enough in a Country such as Singapore. Therefore we can only conclude that the Singapore government wants to maximise land productivity as Minister Mentor has mentioned.
Maximising land productivity means you can expect the singapore government to get the most out of you by selling you the land. This is our interpretation.
Demography
Just take a look at the statistics and our conclusion is still that supply and demand has been misaligned. Someone must have fallen asleep on the job.
From the year 2006 to 2010, the population (mainly from immigration) grew from 4.4014m to 5.0767m (http://www.singstat.gov.sg/stats/themes/people/hist/popn.html).
This is a massive increase 675,300 people in less than 4 years. A more than 15% increase in population. Not even a big country like America who has more than 300m population takes in so much people.
HDB flats built numbers are extremely elusive. We wonder why don’t HDB put these data in one place on the website.
From 2006 to 2007 – HDB built 4628 units (Adapted from Source: http://tankinlian.blogspot.com/2010/01/hdb-flats-and-population-growth.html)
From 2007 to 2008 – HDB built 1472 units (Adapted from Source: http://tankinlian.blogspot.com/2010/01/hdb-flats-and-population-growth.html)
From 2008 to 2009 – HDB built 8400 units
(“The Build-To-Order (BTO) system constitutes the main supply of new flats. HDB has to date launched about 5,000 of the planned supply of 8,400 Build-To-Order (BTO) flats for 2008.” source: http://www.hdb.gov.sg/fi10/fi10296p.nsf/PressReleases/82A850D8E04A77C8482574EC001188EC?OpenDocument)
From 2009 to 2010 – HDB built 13,500 units (http://www.hdb.gov.sg/fi10/fi10296p.nsf/PressReleases/78746BAD770849794825768C00147042?OpenDocument)
For 2010 – estimated HDB built flats are 16,000 to 22,000.
(Source: http://www.hdb.gov.sg/fi10/fi10296p.nsf/PressReleases/895204E2295BDC394825778E007FA919?OpenDocument)
Total HDB units built between 2006 to 2010 (estimated)
2006 - 4624 units
2007 – 1472 units
2008 – 8400 units
2009 – 13,500 units
2010 – 16,000 to 22,000 units
= 43,996 to 49,996 units
Total population increase = 675,300
Assume that 80% of these population growth stays in HDB or will eventually buy HDB.
80% of 675,300 = 540,240
With an average household size of 3.5 (Singstat figures for Singapore's household size). We do accept that foreigners can have a different household size, but this is simply an estimate.
The total HDB units demand is estimated to be 540,240 / 3.5 person per household = 154,354 HDB units of demand.
154,354 HDB units of estimated demand and only 43,996 units built.
HDB SHORTAGE = 110,358 units (Estimated).
It is precisely this shortage to fulfill latent HDB demand that fuels crazy HDB prices rise. And do bear in mind, there is a 2 years lag in building HDB, therefore the shortage is real.
In another words, part of the price rise is not bubble, but an actual acute shortage of HDB flats due to an imbalance created by HDB.
What about Property Supply in the Private Residential segment?
According to MAS, there is adequate supply in the pipeline. There is a pipeline of 75,700 units (61,800 as at 2Q2010 and 13,00 from Government land sales GLS programmes) available with 32,600 available or could be made available for sale. (Appendix 2)
Possible End result of this new Singapore property regulation
This new property regulation is nonetheless a move in the right direction and will lead to less speculation.
And since Private property dwellers will no longer be able to buy HDB flats, this will relieve pressures on HDB flats from rising too fast.
But the latent demand is real. Even if all these people that need HDB housing are not buying, they will be renting. The rental yields will rise and therefore lead to HDB price rise.
Some of the HDB dwellers will sell out and then upgrade to Private residential housing.
By constricting HDB flat supply and then creating more Private residential supply, if this was intended, this indicate that the Singapore government was intending on upgrading it’s citizens towards private residential housing.
The bulk of Singaporean heartland residents who stays in HDB or aspire towards owning a HDB will suffer. As HDB prices rise and closes the gap with private housing, newly wed couples will have a hard time to afford to buy even a HDB given that HDB is priced based on a market subsidy.
What is a HDB market subsidy?
HDB publishes financial statements, but they cannot be easily understood, let us just attempt to make some assumptions here based on our best understanding. You can go to this link to understand more about the financial report. http://theonlinecitizen.com/2009/11/hdb-annual-report-deficit-has-doubled-%E2%80%93-really/)
We read the financial report and we have a big headache understanding what they say.
After looking very hard, we have compiled the HDB flats supply here for you.
An example of market subsidy, the price of a resale flat is $350,000. And for first time buyers, you get a subsidy of $30,000. HDB sells you a HDB flat for $350,000 - $30,000 = $320,000. That $30,000 is a market subsidy, but that is not real money, it is simply a discount.
If the price of the flat in the resale market rises to $420,000, HDB will sell corresponding new flats in similar location at $420,000 - $30,000 = $390,000.
Say the cost of building an HDB flat is $100,000 per unit. And the price in the market is now $420,000. Then HDB could buy the land from another government body for $320,000. Add $100,000 to the construction cost, you will arrive at the selling price of $420,000. Since HDB sells you at only $390,000 HDB technically lose money.
But of course, the money would have gone into the Singapore government’s coffers via another government agency which holds the land.
Therefore HDB really did lose money subsidizing the citizens, but on the overall, the government ends up with increased prices for the land which HDB sits on.
Call it land productivity or whatever terminology. The end result is a fairly regulated and micro-managed property market in Singapore whereby the heartland Singaporeans are increasingly marginalized in the name of profits.
And for those who can afford more, the government is moving the population into a higher consumption bracket. We believe this is to create consumption or to suck up excess liquidity.
APPENDIX 1 - HDB supply of New HDB flats in 2010
“HDB will be offering more than 16,000 new flats in 2010. If demand remains strong, HDB is prepared to launch up to 22,000 new flats in 2011. These numbers are substantial. Over two years, HDB will offer more new flats than the total flats in Toa Payoh town today (35,400 flats).
In addition, HDB will release more land for tender in 2010 to yield an estimated supply of 3,000 DBSS 1 flats and 4,000 ECs. In 2011, HDB will release land sites for another 4,000 DBSS flats and 4,000 ECs, if demand is sustained. This injection of 7,000 DBSS flats and 8,000 ECs over two years is also significant. In comparison, 4,000 DBSS flats and 10,000 ECs have been launched for public sale so far.”
(Source: http://www.hdb.gov.sg/fi10/fi10296p.nsf/PressReleases/895204E2295BDC394825778E007FA919?OpenDocument)
Appendix 2 - Adequate Private Supply in the Pipeline
“12 The Government will also continue to ensure that there is adequate supply of housing to meet demand. In the second half 2010 GLS Programme, we have made available sites that can yield about 13,900 private housing units, of which about 8,100 units will be from sites on the Confirmed List. This is the highest potential supply quantum in the history of the GLS Programme. We will inject an even larger supply of private housing in the first half 2011 GLS Programme, if demand continues to be strong.
13 Apart from the supply from the GLS Programme, there are also 61,800 uncompleted units of private housing from projects in the pipeline as at 2Q20109. Of these, 32,600 units were available or could be made available for sale. These comprised units that had been launched for sale by developers, units that had pre-requisite conditions for sale10 and which could be launched for sale immediately, as well as units with planning approvals for which pre-requisite conditions for sale could be obtained quickly from the Government and made available for sale11.”
(source: http://www.mas.gov.sg/news_room/press_releases/2010/Measures_to_Maintain_a_Stable_and_Sustainable_Property_Market.html )
Saturday, October 2, 2010
Property Investor Regulation in Singapore
Singapore Property Buyer regulation 30th Aug 2010
With effect from 30th Aug 2010. The following measures are implemented. The moves are what the Singapore government claims are required to maintain a stable and sustainable property market.
Seller Stamp Duty in Singapore
Seller stamp duty is increased from the current 1 year to 3 years of holding period for residential properties bought on or after 30th Aug 2010.
The amount payable is 1% on the first $180,000, 2% on the second $180,000 and 3% thereafter of the property price.
Cash Down-payment for Property Buyers
For property buyers with one or more outstanding housing loans at the time of buying another property, the minimum cash payment is increased from 5% to 10% of the valuation of the property.
Decrease in the Loan to Valuation limit for housing loans
If you already have 1 or more existing home loan, all banks and financial institutions regulated by MAS can only lend up to 70% of the valuation amount if property buyers have one or more outstanding housing loans at the time of buying another property.
The decrease in the loan to valuation limit for housing loans applies to the following properties: -
Private residential properties
Executive Condominiums
HUDC
HDB flats
Design, Build and sell scheme (DBSS) flats
If this is your first residential property, the loan to valuation limit remains at 80%.
Seller stamp duty Calculation
Seller stamp duty is applied on a pro-rated basis. If the property is; -
Sold within the first year of purchase – Full stamp duty is applicable
Sold within the 2nd year of purchase, 2/3 of the stamp duty is applicable
Sold within the 3rd year (i.e. > 2 year and < 3 years), 1/3 of the
stamp duty is applicable
HDB houses – Seller stamp duty
Seller stamp duty will not affect the HDB flats as the minimum occupation period for HDB flat is at least 3 years.
For more details, please check with MAS or IRAS.
IRAS enquiries: 6351-3697 or 6351 3698
Downpayment for HUDC, HDB flats, Design, Build and sell Scheme (DBSS flats)
The cash downpayment increase from 5% to 10% of the valuation limit is only applicable to the those who has one or more outstanding housing loan at the time of applying for a housing loan for a new property purchase or those who are borrowing from financial institution regulated by MAS.: -
Private residential properties.
Executive Condominiums
HUDC flats
HDB flats
Design, Build and sell scheme (DBSS) flats
What about first time HDB buyers?
For loans granted by HDB for HDB flats including those design, build and sell scheme (DBSS) flats. These will continue to enjoy a Loan to valuation limit of 90%.
HDB loans are offered to eligible first-time flat buyers and some second timers who are right-sizing their flats to meet their housing needs.
People who are eligible for HDB loans must first WIPE OUT all their CPF ordinary account balance before HDB loan is granted.
For those taking a second concessionary HDB loan, they must use the CPF refund and the 50% of the cash proceeds from the sale of their previous flat before they are granted a HDB loan.
Definitions of property regulation
Date of purchase is deemed as the date when buyer exercise the option or signs the sales and purchase agreement, whichever is earlier.
By Property Buyer Mortgage Consultants
Tel: 6100 – 0608
SMS: 9782 – 8606
Email: loans@propertyBUYER.com.sg
With effect from 30th Aug 2010. The following measures are implemented. The moves are what the Singapore government claims are required to maintain a stable and sustainable property market.
Seller Stamp Duty in Singapore
Seller stamp duty is increased from the current 1 year to 3 years of holding period for residential properties bought on or after 30th Aug 2010.
The amount payable is 1% on the first $180,000, 2% on the second $180,000 and 3% thereafter of the property price.
Cash Down-payment for Property Buyers
For property buyers with one or more outstanding housing loans at the time of buying another property, the minimum cash payment is increased from 5% to 10% of the valuation of the property.
Decrease in the Loan to Valuation limit for housing loans
If you already have 1 or more existing home loan, all banks and financial institutions regulated by MAS can only lend up to 70% of the valuation amount if property buyers have one or more outstanding housing loans at the time of buying another property.
The decrease in the loan to valuation limit for housing loans applies to the following properties: -
Private residential properties
Executive Condominiums
HUDC
HDB flats
Design, Build and sell scheme (DBSS) flats
If this is your first residential property, the loan to valuation limit remains at 80%.
Seller stamp duty Calculation
Seller stamp duty is applied on a pro-rated basis. If the property is; -
Sold within the first year of purchase – Full stamp duty is applicable
Sold within the 2nd year of purchase, 2/3 of the stamp duty is applicable
Sold within the 3rd year (i.e. > 2 year and < 3 years), 1/3 of the
stamp duty is applicable
HDB houses – Seller stamp duty
Seller stamp duty will not affect the HDB flats as the minimum occupation period for HDB flat is at least 3 years.
For more details, please check with MAS or IRAS.
IRAS enquiries: 6351-3697 or 6351 3698
Downpayment for HUDC, HDB flats, Design, Build and sell Scheme (DBSS flats)
The cash downpayment increase from 5% to 10% of the valuation limit is only applicable to the those who has one or more outstanding housing loan at the time of applying for a housing loan for a new property purchase or those who are borrowing from financial institution regulated by MAS.: -
Private residential properties.
Executive Condominiums
HUDC flats
HDB flats
Design, Build and sell scheme (DBSS) flats
What about first time HDB buyers?
For loans granted by HDB for HDB flats including those design, build and sell scheme (DBSS) flats. These will continue to enjoy a Loan to valuation limit of 90%.
HDB loans are offered to eligible first-time flat buyers and some second timers who are right-sizing their flats to meet their housing needs.
People who are eligible for HDB loans must first WIPE OUT all their CPF ordinary account balance before HDB loan is granted.
For those taking a second concessionary HDB loan, they must use the CPF refund and the 50% of the cash proceeds from the sale of their previous flat before they are granted a HDB loan.
Definitions of property regulation
Date of purchase is deemed as the date when buyer exercise the option or signs the sales and purchase agreement, whichever is earlier.
By Property Buyer Mortgage Consultants
Tel: 6100 – 0608
SMS: 9782 – 8606
Email: loans@propertyBUYER.com.sg
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