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On December 15, the Singapore government announced new measures to cool the private residential and HDB resale markets. At a glance these measures include:

  • Tightening of the Loan-To-Value (LTV) limits for HDB housing loan
  • Raise in the Additional Buyer's Stamp Duty (ABSD) rates for those buying second and subsequent properties
  • Tightening of Total Debt Servicing Ratio (TDSR) threshold 

As private housing prices and HDB resale flat values have increased by about 9% and 15% respectively since the first quarter of 2020, the introduction of these new measures are meant to "promote continued housing affordability".

Tightening of the Loan-To-Value (LTV) limits for HDB housing loan

From December 16 onwards, the LTV limits for HDB housing loans will reduce from 90% to 85%. Before, home buyers were typically able to get a maximum loan of 90% of the property purchase price through HDB and then pay the remaining 10% as down payment through cash or CPF. With the new measure, home buyers will now need to fork out an extra 5% down payment through cash or CPF payment and thereby have a lesser loan quantum.

This however does not apply to bank loans, where the LTV limit will stay at 75%.

Raise in the Additional Buyer's Stamp Duty (ABSD) rates for those buying second and subsequent properties

Additional Buyer's Stamp Duty (ABSD) rates Current rates Rates as of 16 Dec 2021
Singapore citizens First residential property 0% 0%
Second residential property 12% 17%
Third and subsequent residential property 15% 25%
Permanent residents First residential property 5% 5%
Second residential property 15% 25%
Third and subsequent residential property 15% 30%
Foreigners Any property 20% 30%
Entities Any property

25%
(Plus additional 5% for housing developers; non-remittable)

35%
(Plus additional 5% for housing developers; non-remittable)

Currently, the ABSD rates for Singapore citizens and Permanent Residents (PRs) purchasing their first residential property will not change. What has changed is the stamp duty rates when purchasing a second and subsequent property. Singapore citizens buying a second property will see a rise of 5% in ABSD rates from 12% to 17%, and a rise of 10% from 15% to 25% for a third and subsequent property. 

For the rise in rates, please refer to the table above. 

Tightening of Total Debt Servicing Ratio (TDSR) threshold 

TDSR limits the amount a person can spend on monthly debt repayments. Before it was set to 60%, which means mortgages cannot cause the borrower’s total monthly loan repayment to exceed 60% of their monthly income. This however will be reduced to make smaller home loans for borrowers. According to new measures, TDSR will be lowered from 60% to 55% as of 16 December. Borrowers of property loans granted beforehand will not be affected.