Measures take effect to ensure a stable property market
The Government introduced a Seller’s Stamp Duty (SSD) and lowered the Loan-to-Value (LTV) limit to 80% for all housing loans.
The SSD will be applied on all residential properties and residential lands that are bought after 20 February 2010 and sold within one year from the date of purchase.
The SSD will not be applicable to HDB flats as they are already subject to a minimum occupation period of at least one year. It will be applied at the standard ad valorem stamp duty rates for the conveyance, assignment or transfer of property: 1% for the first $180,000 of the consideration, 2% for the next $180,000, and 3% for the balance.
This new tax measure aims to discourage short-term speculative activity that could distort underlying prices. It is not targeted at the purchase of properties for owner-occupation or longer term investment.
Meanwhile the housing loans covered by the new LTV limit are those provided by financial institutions regulated by the Monetary Authority of Singapore. However, loans granted by HDB for HDB flats will still have an LTV cap of 90%. This is because HDB flats are already subject to other criteria to prevent speculation and encourage financial prudence.
These calibrated measures are intended to temper sentiments and pre-empt a property bubble from forming.
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