Buyers rushing to submit their cheques at Riverfront Residences before the 12am deadline to avoid the revised ABSD rates. (Photo: Jeanice Ong)

The government has raised the Additional Buyer’s Stamp Duty (ABSD) rates and tightened the Loan-to-Value (LTV) limits on residential property purchases, in a bid “to cool the property market and keep price increases in line with economic fundamentals”.

Prices for private housing in Singapore rose by 9.1 percent over the past year, while demand witnessed a strong recovery. Transaction volumes had also been on the uptrend.

More: MAS Calls For Caution Amidst “Euphoria” In Singapore Property Market

“The sharp increase in prices, if left unchecked, could run ahead of economic fundamentals and raise the risk of a destabilising correction later, especially with rising interest rates and the strong pipeline of housing supply,” said the Ministry of Finance, Ministry of National Development and Monetary Authority of Singapore (MAS) in a joint statement.

While analysts had anticipated the move, they did not expect it to arrive this early.

“After (Tuesday’s) remarks from MAS’s Mr Ravi Menon, we sort of expected that the government may step in; but did not expect it to be so immediate,” said ERA Realty key executive officer Eugene Lim.

He noted that the government may have brought the measures forward as they expect things to worsen in the event the US-China trade war gathers pace and interest rates increase over time.

“Biting the bullet now perhaps may prevent more damage later should things not pan out favourably for Singapore,” he said.

Adjustments to ABSD rates

The current ABSD rates for Singapore citizens and Singapore permanent residents buying their first residential property will remain at zero and five percent respectively.

However, the ABSD rates for all other individuals will be raised by five percentage points and 10 percentage points for entities.

An additional ABSD of five percent that is non-remittable under the remission rules will be introduced for developers acquiring residential properties for housing development.

For purchases jointly made by two or more parties of different profiles, the highest applicable ABSD rate will apply.

However, full ABSD remission will still be provided for joint purchases of the first residential property by married couples with at least one Singapore citizen spouse.

Married couples with at least one Singapore citizen spouse, who jointly acquired a second home can still apply for a refund of ABSD, provided they sell their first house within six months following the date of purchase of the second property, or the issue date of the Temporary Occupation Permit or Certificate of Statutory Completion of the second property, whichever is earlier.

While the new rates are effective today (6 July), there will be a transitional provision for cases where the OTP had already been granted by sellers to potential buyers on or before 5 July.

Revised LTV limits

Meanwhile, the government tightened the LTV limits by five percentage points for all housing loans provided by financial institutions. The statement noted that the revised LTV limits will not apply to loans granted by the Housing Board.

The new LTV limits will apply to loans for residential property acquisitions where the Option to Purchase is granted on or after 6 July.

In view of the tighter LTV limits for housing loans, LTV limits for mortgage equity withdrawal loans will be tightened to 75 percent for a borrower with no outstanding housing loan for the acquisition of another home, and 45 percent for a borrower with an outstanding housing loan.

PropertyGuru’s chief business officer Lewis Ng expects the recovery in the private property market to cool following the revision of the ABSD rates.

“The revision to ABSD rates is likely to lead to a slowdown in the recovery of the private property market, which saw a quarter-on-quarter increase of 3.4 percent in the second quarter of the year,” he said.

“For a second property buyer looking to buy a one-million-dollar unit, this will translate to an additional $50,000 in cash, and a total stamp duty outlay of $160,000, including buyer’s stamp duty.”

He noted that while the ABSD revision is aimed at tempering exuberant investor activity, “the addition of five percent to mortgage LTV ratios will also increase the financial burden on home seekers looking to buy a home for owner occupancy”.

“This additional five percent will need to be borne in cash or CPF monies, which will further constrain budgets,” he said. “While this might be painful for home seekers in the short term, it will enforce financial prudence and create a more stable property market.”

Home buyers looking for Singapore Properties may like to visit our ListingsProject  Reviews and Guides.


Romesh Navaratnarajah, Senior Editor at PropertyGuru, edited this story. To contact him about this or other stories, email

Jul 08, 2018
It is easy for the relevant authority to just raise those rates but have they given thoughts to how they are going to exit those measures? And will they be able to exit at all? The other point is that it is all wrong to interfere with the free market and try to nanny-sit the various participants! If the aim, left unsaid out of political sensitivities, is to help or protect the entry level first home buyers, then it is all wrong!! What instead should be done is to leave the private property market alone to find its own level while lowering the prices of HDB flats for all first time entry level buyers who are citizens! Lower the prices to be commensurate with the average salary of this entry level cohort. Not so difficult if we are not greedy that we must peg prices of HDB flats to the private property market!! This pegging of HDB to private is fundamental wrong in any case as HDB flats for all intents and purposes do not belong to its "buyers" but are just being leased to.....
Paul Ho
Jul 07, 2018
Good article romesh. I will soon write about the effects of this cooling measure on the property prices.
Jul 06, 2018
I think the government bodies in charge of implementing this new law did not make proper study of why property prices have gone up as they claimed to be 9.1%. The main reason for the spike is mainly attributed to developer sales and not the resale market. Up till now, I dont see the value of my property went up much from the price I bought. Only recently, we owners feel a sigh of relieved to see the market slowly recovering from a 6 years decline, and now not even 1 year into recovery, the government has already introduced higher taxes and levy. Perhaps, the government should penalise the developers cause its them who sell their show units at super high prices above market fundamentals and not sellers in the resale market. One very clear example, I could see many new development showflat asking almost 50% higher in psf to existing surrounding developments. The government should correct this imbalance instead of punishing everybody in the market ! As an owner, I felt this is injustice.