New Property Measures As of Mar 2013

Singapore Property Measures - 8 March 2013

New Housing Measures For HDB Flat

Minister for National Development Khaw Boon Wan announced in Parliament today several new housing measures to help first-timers, second-timers, divorcees, singles, and the elderly.

a) Extension of the Parenthood Provisional Housing Scheme (PPHS) to all first-timer married couples – To provide an additional housing option to first-timer married couples who are awaiting the completion of their BTO/SBF flats

b) Extension of the Parenthood Priority Scheme (PPS) to expectant mothers – To help first-timer married couples expecting children buy a home sooner

c) Quota of 2 and 3-room flats in non-mature estates Build-To-Order (BTO) flats for second-timers doubled from 15% to 30%; 5% of the 30% quota will be set aside for divorced/widowed second-timers with children below 16 – To help vulnerable second-timers right-size

d) Reduction in the time bar for divorced couples to each buy a subsidised flat from 5 to 3 years – To help divorced persons buy a subsidised flat earlier

e) New 2-room flats in non-mature estates for first-timer singles aged 35 and above, earning up to $5,000 monthly – To meet singles' housing needs

f) Half of Studio Apartments set aside under Studio Apartment Priority Scheme (SAPS) – To provide greater assurance of success to elderly applicants right-sizing to a studio apartment (SA) near their current home, or near their married children

g) Two related measures on the subletting of HDB flats to non-citizen subtenants were also shared in Parliament:

Plan to impose a quota on non-citizen subtenants renting entire HDB flats and bedrooms, and

Reduction of the maximum approved subletting period from 3 years to 1.5 years, for all new and renewal of HDB tenancy agreements involving non-citizens

Sources : Housing & Development Board (HDB)

Singapore Property Measures - 25 Febuary 2013 (Budget 2013)

Change Of Property Tax Structure

The Government announced the introduction of progressive property tax rates for all residential properties from 1 Jan 2014 and 1 Jan 2015. The revised property tax structure will be phased in over two years starting from 1 January 2014.

A) Owner-Occupied Residential Property Tax

B) Non-Owner-Occupied Residential Property Tax

C) Removing the Property Tax Refund Concession for Vacant Properties

With effect from 1 Jan 2014, the property tax refund concession for vacant properties (whether residential or not) will be removed. The tax treatment of all vacant properties will be streamlined as follows:

a) Vacant residential properties will be taxed at the prevailing property tax rates for non-owner-occupied residential properties;

b) However, residential properties undergoing repairs or building works for owner-occupation can be taxed at the owner-occupier property tax rates during the period of repairs or building works (for up to two years). This is provided that the property is owner-occupied for at least one year after the completion of the repairs or building works;

c) Vacant non-residential buildings or those undergoing repairs to render them fit for occupation will be taxed at the prevailing property tax rate of 10% for non-residential buildings;

d) Vacant land undergoing residential development for owner-occupation can be taxed at owner-occupier tax rates during the development period (for up to two years) if the property is owner-occupied for at least a year after the completion of the residential development. All other vacant land will continue to be taxed at 10% during the development period.

e) The property tax treatment for residential properties undergoing demolition and reconstruction remains unchanged.

Sources: Inland Revenue Authority of Singapore (IRAS)

Singapore Property Measures - 12 January 2013

A) Cooling Measures for the Residential Property Market

The following measures will take effect on 12 January 2013:

1. Additional Buyer's Stamp Duty (ABSD) rates will be:

Raised between five and seven percentage points across the board.

Imposed on Permanent Residents (PRs) purchasing their first residential property and on Singaporeans purchasing their second residential property.

Citizenship	ABSD Rate on 1st Purchase	ABSD Rate on 2nd Purchase	ABSD Rate on 3rd & Subsequent Purchase
Singapore Citizens	Existing: NA Revised: NA	Existing: NA Revised: 7%	Existing: 3% Revised: 10%
Permanent Residents	Existing: NA Revised: 5%	Existing: 3% Revised: 10%	Existing: 3% Revised: 10%
Foreigners and nonindividuals (corporate entities)	Existing: 10% Revised: 15%	Existing: 10% Revised: 15%	Existing: 10% Revised: 15%

2. 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.

3. 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%. 

	1st Housing Loan	2nd Housing Loan	From 3rd Housing Loan
LTV Limit	Existing Rules 80%; or 60% if the loan tenure is more than 30 years or extends past age 65 Revised Rules No change	Existing Rules 60%; or 40% if the loan tenure is more than 30 years or extends past age 65 Revised Rules 50%; or 30% if the loan tenure is more than 30 years or extends past age 65	Existing Rules 60%; or 40% if the loan tenure is more than 30 years or extends past age 65 Revised Rules 40%; or 20% if the loan tenure is more than 30 years or extends past age 65
Minimum Cash Down Payment	Existing Rules 5% (for LTV of 80%) 10% (for LTV of 60%) Revised Rules No change	Existing Rules 10% Revised Rules 25%	Existing Rules 10% Revised Rules 25%
Non- Individual Borrowers	Existing LTV Limit 40% Revised LTV Limit 20%

B) Cooling Measures Specific to Public Housing

1. Tighter eligibility for loans to buy HDB flats:

MAS will cap the Mortgage Servicing Ratio (MSR) for housing loans granted by financial institutions at 30% of a borrower's gross monthly income.

For loans granted by HDB, the cap on the MSR will be lowered from 40% to 35%.

2. PRs who own a HDB flat will be disallowed from subletting their whole flat.

3. PRs who own a HDB flat must sell their flat within six months of purchasing a private residential property in Singapore.

4. An additional measure will take effect on 1 July 2013 to tighten the terms for granting HDB loans and the use of CPF funds for the purchase of HDB flats with remaining leases of less than 60 years.

Remaining Lease of HDB Flat	Use of CPF funds	HDB Housing Loan
> 60 years	Allowed based on current policy, i.e. status quo.	Allowed based on current policy, i.e. status quo.
30 to 59 years	Allowed, except for buyers for whom the remaining lease cannot cover them to the age of at least 80. The total CPF usage by the household will be the prorated Valuation Limit (VL) based on the ratio of the remaining lease when the youngest buyer who can use CPF turns 55 years old, to the lease at point of purchase.	Allowed, if remaining lease can cover the buyer* to the age of at least 80. Loan tenure will be the shortest of: 30 years; 65 years minus average age of buyers; and balance lease at the point of purchase minus 20 years.
20- 29 years	Not allowed.	Allowed, if remaining lease can cover the buyer* up to the age of at least 80. Loan tenure will be the shortest of: 30 years; 65 minus average age of buyers; and balance lease at the point of purchase minus 20 years.
< 20 years	Not allowed.	No HDB housing loan.

C) Cooling Measures for Executive Condominium Developments

The following SSD rates will be imposed on industrial properties and land bought and sold within three years of the date of purchase:

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 only.

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.

D) Cooling Measure for the Industrial Property Market: Seller's Stamp Duty

The following SSD rates will be imposed on industrial properties and land bought and sold within three years of the date of purchase:

a) SSD at 15% if the property is sold in the first year of purchase, i.e. the property is held for one year or less from the date of purchase

b) SSD at 10% if the property is sold in the second year of purchase, i.e. the property is held for more than one year and up to two years from the date of purchase.

c) SSD at 5% if the property is sold in the third year of purchase, i.e. the property is held for more than two years and up to three years from the date of purchase.

Sources : Monetary Authority of Singapore (MAS)