The latest housing rules and measures on buying property in Singapore

All you need to know about the latest Additional Buyer’s Stamp Duty (ABSD) rates, the Total Debt Servicing Ratio (TDSR) threshold, and the Loan-to-Value (LTV) limit for your property mortgage loans.

Here are some Frequently Asked Questions (FAQ) on the key information and updates on the latest housing and property cooling measures announced by the Singapore Government.

The TL;DR version to the property cooling measures

What is the effective date of the latest cooling measures?

16 Dec 2021

What are the Additional Buyer’s Stamp Duty (ABSD) rates?

0% ABSD for Singapore Citizens buying their first residential property.
5% ABSD for Singapore Permanent Residents buying their first residential property.

What is the maximum Total Debt Servicing Ratio Threshold (TDSR) limit?

55%

What is the Loan-to-Value (LTV) limit for property purchase?

85% for HDB housing loans.
75% for bank loans.

The give me more info and context on the housing cooling measures version

What is Additional Buyer’s Stamp Duty (ABSD)?

ABSD is basically a tax. Liable buyers are required to pay ABSD on top of the existing Buyer’s Stamp Duty (BSD). This is targeted more at investors and speculators.

If you are a Singapore Citizen buying your first residential property, you do not have to pay ABSD.If you are a Singapore Permanent Resident buying your first residential property, your ABSD is at 5%.

For details and other scenarios, refer to this IRAS page on Additional Buyer’s Stamp Duty (ABSD).

What is the ABSD (Additional Buyer’s Stamp Duty) in Singapore now?

ABSD rates for Singapore Citizens and Singapore Permanent Residents remain unchanged for the first residential property purchase.

ABSD for Singapore Citizens buying first residential property: 0%
ABSD for Singapore Permanent Residents buying first residential property: 5%

ABSD rates for other types of buyers have been revised upwards. So if you are dreaming of being a property magnate or multiple-property owner-cum-investor, it just got a little harder.

What is Total Debt Servicing Ratio Threshold and why is there a need for TDSR?

Total debt servicing ratio (TDSR) refers to the portion of a borrower’s gross monthly income that goes towards repaying the monthly debt obligations, including the loan being applied for.

TDSR limits are set by the Monetary Authority of Singapore (MAS) to ensure that borrowers are not over-leveraged for property purchases.

Read more on MAS page regarding TDSR rules.

What is the current TDSR limit?

The TDSR has been tightened. It is now 55%, compared to 60% before the latest round of cooling measures.

Borrowers with existing property loans granted before 16 December 2021 will not be affected by the revised TDSR threshold when refinancing their loans.

What is Loan-to-Value (LTV) limit?

The loan-to-value (LTV) limit determines the maximum amount an individual can borrow from a financial institution (FI) for a housing loan.

A change in LTV limit will affect how much downpayment you need to pay which is another way to influence purchase decisions based on affordability and prudence.

You can read more on MAS website here.

What is the Loan-to-Value (LTV) limit now?

The LTV limit for HDB housing loans is now at 85%. Tightened from the 90% previously.There’s no change for loans granted by financial institutions as the LTV limit remains at 75%.

For details and accuracy on the latest updates, refer to the announcment by Ministry of National Development on Measures to Cool the Property Market.

Read also: Will property still be our pot of gold in Singapore? DBS research

Measures to promote a stable and sustainable property market infograhpic

More questions on the property market cooling measures? Here’s the list of Frequently Asked Questions (FAQ) shared by MND.

Additional Buyers’ Stamp Duty (ABSD)

What transitional arrangements are in place for buyers purchasing residential property around the date of implementation of the increase in ABSD?

There will be a transitional provision where ABSD rates before 16 December 2021 will apply for cases that meet all of the following conditions:

1. The option to purchase (OTP) is granted by sellers to potential buyers on or before 15 December 2021;
2. This OTP is exercised on or before 5 January 2022, or within the OTP validity period, whichever is earlier; and
3. This OTP has not been varied on or after 16 December 2021.

Buyers should adhere strictly to the conditions in order to enjoy the transitional
provision.

Total Debt Servicing Ratio (TDSR)

Which loans will the revised TDSR threshold apply to?

The revised 55% TDSR threshold will apply to new housing loans for the purchase of properties where the OTP is granted on or after 16 December

Where there is no OTP, the 55% TDSR threshold will apply where the date of the sale and purchase agreement is signed on or after 16 December 2021.

The 55% TDSR threshold will also be applicable to homeowners who apply for new mortgage equity withdrawal loans (MWL) on or after 16 December 2021, unless the loan-to-value (LTV) ratio of the MWL does not exceed 50%.

The TDSR is applicable to individuals, sole proprietors and vehicles set up for the purchase of properties that take out property loans from financial institutions (FIs) in respect of residential and non-residential properties. Other SMEs and corporates are not subject to the TDSR when applying for property loans, as they are generally subject to a different set of credit assessment criteria that considers the nature and financials of their business.

What arrangements are in place for borrowers taking loans around the date of implementation of the tightening in TDSR threshold?

The previous 60% TDSR threshold will apply to borrowers who have been issued with an OTP dated on or before 15 December 2021, or who have signed a sale and purchase agreement on or before 15 December 2021, where there is no OTP. Borrowers can avail themselves to this provision regardless of whether they have exercised the OTP at the point of applying for a property loan.

Borrowers should provide the OTP or sales and purchase agreement to financial institutions when applying for a property loan to avail themselves of the previous 60% TDSR threshold.

For homeowners who had taken loans based on the previous 60% TDSR threshold, and are now unable to meet the new threshold, would they be prevented from refinancing their loans?

Homeowners with existing owner-occupied property loans will not be affected by the 55% TDSR threshold, as the TDSR does not apply to refinancing of owner-occupied housing loans. For borrowers who are refinancing their existing investment property loans, MAS has provided for a temporary TDSR waiver for borrowers affected by COVID-19. Otherwise, the previous 60% TDSR threshold will apply.

LTV limit for HDB housing loan

Does the announced LTV limit for HDB flats apply to housing loans granted by the financial institutions regulated by MAS?

No, it does not. The announced LTV limit applies only to housing loans granted by HDB for the purchase of HDB flats. The LTV limit for those taking housing loans from financial institutions remains at 75%.

When does the announced LTV limit for HDB loans take effect?

The announced LTV limit will apply to those who are buying a new flat in the HDB’s sales exercises launched from 16 Dec 2021 onwards. It will also apply to resale flat buyers, specifically for complete resale applications which are received by HDB from 16 Dec 2021.

Those who are buying new flats in the Nov 2021 Build-To-Order and Sale of Balance Flats exercises, as well as the earlier sales exercises, and those who are buying resale flats for which the complete resale application was received by the HDB before 16 Dec 2021, will be subject to the previous 90% LTV limit.

With a lower LTV limit, does it mean I have to pay a higher amount of downpayment when signing the Agreement for Lease for my new flat purchase?

There is no change to the amount of downpayment that is required when signing the Agreement for Lease for flats purchased directly from HDB, which remains at 10%.

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