The Law Society’s Conditions of Sale sets out standard terms and conditions for buyer and seller to enter into a contract for sale and purchase of immovable properties by referencing and incorporating them.
In line with recent legislated amendments, new regulatory provisions were introduced under the 2012 Conditions, to safeguard conveyancing money and payment of additional stamp duty.
The rate for interest payable on late completion due to the default of a party has also been revised down from 10% per annum to 8% per annum after extensive consultation with conveyancing practitioners and other interested stakeholders. It also addressed issues on unauthorised additions or alterations to the property.
A Foreign person who wishes to purchase a landed residential property is required to seek Government approval, as foreign ownership of such properties is restricted to those who make adequate economic contribution to Singapore. The ownership restrictions are provided in the Residential Property Act.
The sales of separate units of commercial properties in a commercial complex and for purposes connected therewith is governed by the above act.
An Act to control the rents of certain premises and the right to recover possession of those premises.
Matters incidental to and arising from these include issues of excessive rents or the imposition of unlawful premiums and charges.
Government Measures For A Stable and Sustainable Property Market
Sep 14, 2009
- Removal of the Interest Absorption Scheme (IAS) and Interest-Only Housing Loans (IOL).
- Non-extension of the Jan 2009 Budget assistance measures for the property market when the measures expire.
Feb 19, 2010
- Introduction of Seller’s Stamp Duty (SSD) on all residential properties and residential lands that are bought after 19 Feb 2010 and sold within 1 year from the date of purchase.
- Lowering the Loan-to-Value (LTV) limit to 80% for all housing loans provided by financial institutions regulated by the Monetary Authority of Singapore (MAS).
The measures will come into effect on 20 February 2010.
AUG 30, 2010
- Increase the holding period for imposition of Seller’s Stamp Duty (SSD) from the current one year to three years.
- For property buyers with one or more outstanding housing loans at the time of the new housing purchase:
- The minimum cash payment will increase from 5% to 10% of the valuation limit
- Decrease the Loan-to-Value (LTV) limit for housing loans granted by financial institutions regulated by MAS to these buyers from the current 80% to 70%.
- Loans granted by HDB for HDB flats (including DBSS flats) will still have an LTV cap of 90%.
The measures will take immediate effect on 30 August 2010.
Jan 13, 2011
a) Holding period for imposition of Seller's Stamp Duty (SSD) increase from three years to four years;
b) SSD rates raise to 16%, 12%, 8% and 4% of consideration for residential properties which are bought on or after 14 January 2011, and are sold in the first, second, third and fourth year of purchase respectively;
c) Lower the Loan-To-Value (LTV) limit to 50% on housing loans granted by financial institutions regulated by MAS for property purchasers who are not individuals
d) Lower the LTV limit on housing loans granted by financial institutions regulated by MAS from 70% to 60% for property purchasers who are individuals with one or more outstanding housing loans at the time of the new housing purchase.
The measures will take effect on 14 January 2011.
Dec 7, 2011
Additional Buyer’s Stamp Duty (ABSD) will be imposed on certain categories of residential property purchases over and above the current Buyer’s Stamp DutY. ABSD will apply to the purchase price or market value of the property (whichever is higher) for the following purchases:
- Foreigners and non-individuals (corporate entities) buying any residential property will pay an ABSD of 10%;
- Permanent Residents (PRs) owning one and buying the second and subsequent residential property will pay an ABSD of 3%.
- Singapore Citizens (Singaporeans) owning two and buying the third and subsequent residential property will pay an ABSD of 3%.
The ABSD will take effect on 8 Dec 2011. Remission of ABSD will be given for options granted on or before 7 Dec 2011 and exercised within 3 weeks (i.e. on or before 28 Dec 2011) or the option validity period, whichever is the earlier.
Oct 5, 2012
MAS Restricts Loan Tenure for Residential Properties
The new MAS rules impose an absolute limit of 35 years on the tenure of all loans for residential property. This will apply to loans to both individual and non-individual borrowers, as well as refinancing loans from 6 October 2012.
Additionally, MAS will lower the LTV ratio for new residential property loans to borrowers who are individuals.
For loan tenure exceeding 30 years or the loan period extending beyond the retirement age of 65 years, the LTV limit will be:
- 40% for a borrower with one or more outstanding residential property loans3; and
- 60% for a borrower with no outstanding residential property loan.
MAS will also lower the LTV ratio for residential property loans to non-individual borrowers from 50% to 40%.
Jan 11, 2013
Additional Measures To Ensure A Stable And Sustainable Property Market - Effective 12 January 2013
Applicable Measures On Residential Properties:
a) Additional Buyer’s Stamp Duty (ABSD) rates will be:
i) Raised between five and seven percentage points across the board.
ii) Imposed on Permanent Residents (PRs) purchasing their first residential property and on Singaporeans purchasing their second residential property.
b) Loan-to-Value limits on housing loans granted by financial institutions will be tightened for individuals who already have at least one outstanding loan, as well as to non-individuals such as companies.
c) Besides tighter Loan-to-Value limits, the minimum cash down payment for individuals applying for a second or subsequent housing loan will also be raised from 10% to 25%.
These new ABSDs and loan rules are temporary and will be reviewed in future depending on market conditions.
The details of the ABSD measure are set out in Annex I, and the housing loan measures, in Annex II.
Measures Applicable To Public Housing
i) MAS will cap the Mortgage Servicing Ratio (MSR) for housing loans granted by financial institutions at 30% of a borrower’s gross monthly income.
ii) For loans granted by HDB, the cap on the MSR will be lowered from 40% to 35%.
iii) PRs who own a HDB flat will be disallowed from subletting their whole flat.
iv) PRs who own a HDB flat must sell their flat within six months of purchasing a private residential property in Singapore.
Measures for Executive Condominium
a) The maximum strata floor area of new EC units will be capped at 160 square metres.
b) Sales of new dual-key EC units will be restricted to multi-generational families
c) Developers of future EC sale sites from the Government Land Sales programme will only be allowed to launch units for sale 15 months from the date of award of the sites or after the physical completion of foundation works, whichever is earlier.
d) Private enclosed spaces and private roof terraces will be treated as gross floor area (GFA). The GFA of such spaces in non-landed residential developments, including ECs, will be counted as part of the ‘bonus’ GFA of a residential development and subject to payment of charges. This is in line with the treatment of balconies under URA’s current guidelines.
Imposition Of SSD On Industrial Propeties
SSD rates will be imposed on industrial properties and land bought and sold within three years of the date of purchase:
These SSDs will apply for industrial properties and land bought on or after 12 January 2013.
The Inland Revenue Authority of Singapore (IRAS) will be releasing an E-tax guide on the circumstances under which SSD is applicable and the procedures for paying SSD.
June 28, 2013
MAS Introduces Debt Servicing Framework for Property Loans
Financial Institutions (FI) will be required to:
- take into account the monthly repayment for the property loan that the borrower is applying for plus the monthly repayments on all other outstanding property and non-property debt obligations of the borrower.
- apply a specified medium-term interest rate or the prevailing market interest rate, whichever is higher, to the property loan that the borrower is applying for when calculating the TDSR.
- apply a haircut of at least 30% to all variable income (e.g. bonuses) and rental income.
- apply haircuts to and amortise the value of any eligible financial assets taken into consideration in assessing the borrower’s debt servicing ability, in order to convert them into ‘income streams’ in computing the TDSR.
MAS expects any property loan extended by the FI to not exceed a TDSR threshold of 60%.
Dec 9, 2013
Refining the Executive Condominium Housing Scheme
MND Media Release
Three measures to be implemented for Executive Condominium (EC) developments:
I. Reduce EC Cancellation Fees from 20% to 5% of the purchase price, applicable to EC land sales launched on or after 9 Dec 2013, including those where the tenders have not closed.
II. Resale Levy for Second-Timer Applicants. The new requirement will be applied to EC land sales which are launched on or after 9 Dec 2013, including those where the tenders have not closed.
III. Mortgage Servicing Ratio (MSR) will be capped at 30% of a borrower’s gross monthly income for Option to Purchase granted on or after 10 Dec 2013.
Feb 10, 2014
MAS broadens exemptions from TDSR thresholds For Refinancing
Owner occupied residential property will be exempt from the TDSR threshold when refinancing if the Option to Purchase (OTP) of the residential property was granted before 29 June 2013.
This is a concession compared to the current rules, which also require that he does not own any other property, or have any other outstanding property loan.