In the Rule Book, equilibrium is a good thing. At least that is how the Singapore government see it. It will not allow property prices to run up too fast and too soon. So, effective 6th July 2018, additional buyer stamp duty (ABSD) will rise a further five percentage point for some home buyers and housing loans will also tighten. These are steps the authority has adopted as preventive measures to align the property market with economic fundamentals.
Since the third quarter of last year, property prices have surged by 9.1% over the past year. The Singapore government stated, "The sharp increase in prices, if left unchecked, could run ahead of economic fundamentals and raise the risk of a destabilizing correction later, especially with rising interest rates and the strong pipeline of housing supply." Additionally, the demand for private residential property has also resulted in an increase in the volume of transactions.
Stamp duty will remain unchanged for Singaporeans and permanent residents buying their first home, but those buying their second or more properties will have to pay 5 percent more.
Foreigners will have to pay stamp duty of 20% instead of 15%, while entities will now pay 25% instead of 15%.
Developers buying residential properties for development will now pay an additional 5% stamp duty.
All housing loans issued by financial institutions will see a 5% tightening of loan-to-value limits.
Revised ABSD Rates as at 6th July 2018
Developers will come under the additional buyer stamp duty (ABSD) rate of 25% for entities. They may apply for ABSD remission, subject to conditions (which include completing and selling all units within the prescribed periods of 3 years or 5 years for non-licensed and licensed developers respectively.