To guarantee more sustainable growth in the property market, the Ministry of National Development (MND) has announced three important measures, which will come into effect immediately.
These measures include increasing the holding period for the imposition of Seller’s Stamp Duty (SSD) from the current one year to three years, and reducing the Loan-To-Value (LTV) limit to 70 percent from 80 percent for home loans granted by financial institutions.
MND also announced that it’s increasing the minimum cash payment from 5 percent to 10 percent for property buyers with an existing mortgage who want to buy a new property.
“The policies are a further calibrated move after the measures announced in February 2010,” said Mr. Mohamed Ismail, chief executive of PropNex. On February 19, an SSD was imposed on properties being sold within one year of acquisition, as well as a lower loan ceiling from financial institutions of 80 percent from 90 percent.
“The Government is seeking sustainable growth of the property market in the long-term, and one of the aims of these measures, particularly the increased holding period, is to discourage speculative flipping,” he said.
Mr. Ismail also believes that the increased minimum cash payment will affect buyers with existing mortgages. “In tandem with discouraging flipping, and to further emphasize that property should be a mid- to long-term investment, the Government aims to enforce greater financial prudence upon the consumers.”
He noted that the measures would particularly affect Singaporeans who had earlier taken advantage of the 5 percent cash and 15 percent CPF down payments.
To guarantee a more sustainable growth in the property market, the Ministry of National Development (MND) has announced three important measures, which will come into effect immediately.
These measures include increasing the holding period for the imposition of Seller’s Stamp Duty (SSD) from the current one year to three years, and reducing the Loan-To-Value (LTV) limit to 70 percent from 80 percent for home loans granted by financial institutions.
MND also announced that property buyers who have more than one outstanding loan at the time of a new home purchase will have to pay a minimum cash payment of 10 percent, an increase from the previous 5 percent.
“The policies are a further calibrated move after the measures announced in February 2010,” said Mr. Mohamed Ismail, chief executive of PropNex. On February 19, an SSD was imposed on properties being sold within one year of acquisition, as well as a lower loan ceiling from financial institutions of 80 percent from 90 percent.
“The Government is seeking sustainable growth of the property market in the long-term, and one of the aims of these measures, particularly the increased holding period, is to discourage speculative flipping,” he said.
Mr. Ismail also believes that the increased minimum cash payment will affect buyers with existing mortgages. “In tandem with discouraging flipping, and to further emphasize that property should be a mid- to long-term investment, the Government aims to enforce greater financial prudence upon the consumers.”
He noted that the measures would particularly affect Singaporeans who had earlier taken advantage of the 5 percent cash and 15 percent CPF down payments.
“When we look at the Minimum Cash Payment in addition to the third measure of a lower Loan-To-Value limit of 70 percent down from 80 percent, we will see a substantial impact on local investors,” said Mr. Ismail. “These would include HDB dwellers who are thinking of buying a second property for investment purposes.”