Saturday, December 22, 2012
Saturday, December 8, 2012
Friday, November 30, 2012
Sunday, November 18, 2012
Thursday, November 8, 2012
S$135m top bid for Sengkang EC site
An executive condominium (EC) site located at the junction of Sengkang West Way and Fernvale Link (Parcel B) fetched a top bid of S$135 million from Verspring Properties when the public tender closed yesterday, said the Housing and Development Board (HDB).
Launched for sale on 26 September, the 99-year leasehold site has a land area of 14,100.8 sq m and could yield some 420 units. It has a maximum gross floor area (GFA) of 42,302.4 sq m and gross plot ratio of 3.0.
In total, the site attracted six bids. The top bid translates to S$3,191.31 psm on the GFA. Meanwhile, the second highest offer of S$134.85 million or S$3,187.81 psm on the GFA came from JBE Development.
HDB will announce its final decision on the winning bid after all offers have been evaluated.
Li Hiaw Ho, Executive Director at CBRE, said it will be timely for a new EC project to be launched in Sengkang and Punggol by mid-2013, as all existing projects there have sold out.
He noted that the top bid of S$135 million could translate to S$296.50 psf on the plot ratio, which means the winning developer will likely enjoy an estimated breakeven cost of S$600 psf. In terms of pricing, EC units at the future development could range from S$680 to S$720 psf, similar to the nearby Twin Waterfalls, Riverparc Residence and Austville Residences.
Added Li: “A new project, The Topiary (726 units) located at Fernvale Lane, will be launched around December 2012 and another EC project at Punggol Way/ Punggol Walk may be launched in Q1 2013.”
Sunday, October 7, 2012
CM3 30 Aug 2010 SSD 1 to 3 LTV cash 5 to 10%
30 Aug 2010
The Government announced today the following measures to maintain a stable and sustainable property market:
The Government announced today the following measures to maintain a stable and sustainable property market:
a) Increase the holding period for imposition of Seller’s Stamp Duty (SSD) from the current one year to three years.
b) For property buyers who already have one or more outstanding housing loans [1] at the time of the new housing purchase:
i. Increase the minimum cash payment from 5% to 10% of the valuation limit [2]; and
ii. Decrease the Loan-to-Value (LTV) limit for housing loans granted by financial institutions regulated by MAS to these buyers from the current 80% to 70%.
The measures will take immediate effect on 30 August 2010.
The Government's objective is to ensure a stable and sustainable property market where prices move in line with economic fundamentals. The property market is currently very buoyant. While the rate of price increase of private residential properties has moderated in the last 3 quarters, prices have still increased significantly by 11% in the first half of 2010, and price levels have now exceeded the historical peak in the second quarter of 1996.
While Singapore has enjoyed strong economic growth in the first half of 2010, our economic growth is expected to moderate in the second half of the year. There are also still uncertainties in the global economy. Should economic growth falter and the market corrects, property buyers could face capital losses, with implications on their own finances and the economy as a whole. Moreover, the current low global interest rate environment will not continue indefinitely, and higher interest rates could have severe implications for buyers who have overextended themselves. Therefore, the Government has decided to introduce additional measures now to temper sentiments and encourage greater financial prudence among property purchasers.
b) For property buyers who already have one or more outstanding housing loans [1] at the time of the new housing purchase:
i. Increase the minimum cash payment from 5% to 10% of the valuation limit [2]; and
ii. Decrease the Loan-to-Value (LTV) limit for housing loans granted by financial institutions regulated by MAS to these buyers from the current 80% to 70%.
The measures will take immediate effect on 30 August 2010.
The Government's objective is to ensure a stable and sustainable property market where prices move in line with economic fundamentals. The property market is currently very buoyant. While the rate of price increase of private residential properties has moderated in the last 3 quarters, prices have still increased significantly by 11% in the first half of 2010, and price levels have now exceeded the historical peak in the second quarter of 1996.
While Singapore has enjoyed strong economic growth in the first half of 2010, our economic growth is expected to moderate in the second half of the year. There are also still uncertainties in the global economy. Should economic growth falter and the market corrects, property buyers could face capital losses, with implications on their own finances and the economy as a whole. Moreover, the current low global interest rate environment will not continue indefinitely, and higher interest rates could have severe implications for buyers who have overextended themselves. Therefore, the Government has decided to introduce additional measures now to temper sentiments and encourage greater financial prudence among property purchasers.
Extending the Holding Period for Imposition of Seller’s Stamp Duty (SSD) on Residential Properties Sold from 1 Year to 3 Years
The Government imposed in February 2010 a seller’s stamp duty (SSD) for sellers who buy residential properties [3] on or after 20 February 2010 and sell them within a year of purchase.
For residential properties bought [4] on or after 30 August 2010, SSD will be imposed if these properties are sold within three years of purchase. Specifically, the SSD levied on residential properties will be revised to as follows:
a) Sold within the first year of purchase, i.e. the property is held for 1 year or less from its purchase date – The full SSD rate (1% for the first $180,000 of the consideration, 2% for the next $180,000, and 3% for the balance) will be imposed.
b) Sold within the second year of purchase, i.e. the property is held for more than 1 year and up to 2 years – 2/3 of the full SSD rate.
c) Sold within the third year of purchase, i.e. the property is held for more than 2 years and up to 3 years – 1/3 of the full SSD rate.
No SSD will be payable by the vendor if the property is sold more than 3 years after it was bought. Please see Annex for examples of how the SSD will be computed.
The extended SSD will not affect HDB lessees as the required Minimum Occupation Period for HDB flats is at least 3 years.
IRAS will be releasing an updated e-Tax Guide on the circumstances under which SSD will apply and the procedures for paying SSD. The e-Tax Guide is available atwww.iras.gov.sg. Taxpayers with enquiries may call IRAS at 6351 3697 or 6351 3698.
The Government imposed in February 2010 a seller’s stamp duty (SSD) for sellers who buy residential properties [3] on or after 20 February 2010 and sell them within a year of purchase.
For residential properties bought [4] on or after 30 August 2010, SSD will be imposed if these properties are sold within three years of purchase. Specifically, the SSD levied on residential properties will be revised to as follows:
a) Sold within the first year of purchase, i.e. the property is held for 1 year or less from its purchase date – The full SSD rate (1% for the first $180,000 of the consideration, 2% for the next $180,000, and 3% for the balance) will be imposed.
b) Sold within the second year of purchase, i.e. the property is held for more than 1 year and up to 2 years – 2/3 of the full SSD rate.
c) Sold within the third year of purchase, i.e. the property is held for more than 2 years and up to 3 years – 1/3 of the full SSD rate.
No SSD will be payable by the vendor if the property is sold more than 3 years after it was bought. Please see Annex for examples of how the SSD will be computed.
The extended SSD will not affect HDB lessees as the required Minimum Occupation Period for HDB flats is at least 3 years.
IRAS will be releasing an updated e-Tax Guide on the circumstances under which SSD will apply and the procedures for paying SSD. The e-Tax Guide is available atwww.iras.gov.sg. Taxpayers with enquiries may call IRAS at 6351 3697 or 6351 3698.
Increase the Minimum Cash Payment from 5% to 10% of the Valuation Limit for Property Purchasers with one or more outstanding Housing Loans
Previously, property buyers have to make cash payment of at least 5% of the valuation limit [5]. With effect from 30 Aug 2010 [6], the cash payment is increased from 5% to 10% of the valuation limit [7]. This measure is applied only to buyers of private residential properties, Executive Condominiums, HUDC flats and HDB flats (including those under the Design, Build and Sell Scheme, or DBSS flats) who are taking housing loans from financial institutions regulated by MAS and who already have one or more outstanding housing loans at the time of applying for a housing loan for the new property purchase.
Previously, property buyers have to make cash payment of at least 5% of the valuation limit [5]. With effect from 30 Aug 2010 [6], the cash payment is increased from 5% to 10% of the valuation limit [7]. This measure is applied only to buyers of private residential properties, Executive Condominiums, HUDC flats and HDB flats (including those under the Design, Build and Sell Scheme, or DBSS flats) who are taking housing loans from financial institutions regulated by MAS and who already have one or more outstanding housing loans at the time of applying for a housing loan for the new property purchase.
Decrease the LTV limit for housing loans granted by financial institutions regulated by MAS from the current 80% to 70% for Property Purchasers with one or more outstanding Housing Loans
The LTV limit is lowered from 80% to 70% with effect from 30 Aug 2010 [8] for borrowers who have one or more outstanding housing loans (whether from HDB or a financial institution regulated by MAS) at the time of applying for a housing loan for the new property purchase. Borrowers who do not have any outstanding housing loans continue to have an LTV cap of 80%. These rules apply to housing loans granted by financial institutions for private residential properties, Executive Condominiums, HUDC flats and HDB flats (including DBSS flats).
Loans granted by HDB for HDB flats (including DBSS flats) will still have an LTV cap of 90%. HDB loans are offered to eligible first-time flat buyers and second-timers who are right-sizing their flats to meet their housing needs. They are required to utilise all of their CPF Ordinary Account balance before HDB loans will be granted. Furthermore, those taking a second concessionary HDB loan must use the CPF refund and 50% of the cash proceeds from the sale of their previous flat before they are granted an HDB loan. This is in line with HDB's home ownership policy of helping eligible buyers, especially first-time buyers, purchase public housing in a financially prudent manner.
Financial institutions' lending standards have remained prudent and the asset quality of housing loans has stayed robust, with the non-performing loans ratio at less than 1% as at Q2 2010. Nonetheless, there are signs that more housing loans are originating at higher LTV bands of above 70%. In line with the objective of ensuring a stable and sustainable property market, lowering the LTV limit sends a clear signal to financial institutions to maintain credit standards, and encourages greater financial prudence among property purchasers already servicing one or more outstanding housing loans.
The LTV limit is lowered from 80% to 70% with effect from 30 Aug 2010 [8] for borrowers who have one or more outstanding housing loans (whether from HDB or a financial institution regulated by MAS) at the time of applying for a housing loan for the new property purchase. Borrowers who do not have any outstanding housing loans continue to have an LTV cap of 80%. These rules apply to housing loans granted by financial institutions for private residential properties, Executive Condominiums, HUDC flats and HDB flats (including DBSS flats).
Loans granted by HDB for HDB flats (including DBSS flats) will still have an LTV cap of 90%. HDB loans are offered to eligible first-time flat buyers and second-timers who are right-sizing their flats to meet their housing needs. They are required to utilise all of their CPF Ordinary Account balance before HDB loans will be granted. Furthermore, those taking a second concessionary HDB loan must use the CPF refund and 50% of the cash proceeds from the sale of their previous flat before they are granted an HDB loan. This is in line with HDB's home ownership policy of helping eligible buyers, especially first-time buyers, purchase public housing in a financially prudent manner.
Financial institutions' lending standards have remained prudent and the asset quality of housing loans has stayed robust, with the non-performing loans ratio at less than 1% as at Q2 2010. Nonetheless, there are signs that more housing loans are originating at higher LTV bands of above 70%. In line with the objective of ensuring a stable and sustainable property market, lowering the LTV limit sends a clear signal to financial institutions to maintain credit standards, and encourages greater financial prudence among property purchasers already servicing one or more outstanding housing loans.
Adequate Supply in the Pipeline
The Government will also continue to ensure that there is adequate supply of housing to meet demand. In the second half 2010 GLS Programme, we have made available sites that can yield about 13,900 private housing units, of which about 8,100 units will be from sites on the Confirmed List. This is the highest potential supply quantum in the history of the GLS Programme. We will inject an even larger supply of private housing in the first half 2011 GLS Programme, if demand continues to be strong.
Apart from the supply from the GLS Programme, there are also 61,800 uncompleted units of private housing from projects in the pipeline as at 2Q2010 [9]. Of these, 32,600 units were available or could be made available for sale. These comprised units that had been launched for sale by developers, units that had pre-requisite conditions for sale [10] and which could be launched for sale immediately, as well as units with planning approvals for which pre-requisite conditions for sale could be obtained quickly from the Government and made available for sale [11].
The Government will continue to monitor the property market closely and will introduce additional measures if required later, to promote a stable and sustainable property market.
Issued by the Ministry of National Development, Ministry of Finance and Monetary Authority of Singapore
The Government will also continue to ensure that there is adequate supply of housing to meet demand. In the second half 2010 GLS Programme, we have made available sites that can yield about 13,900 private housing units, of which about 8,100 units will be from sites on the Confirmed List. This is the highest potential supply quantum in the history of the GLS Programme. We will inject an even larger supply of private housing in the first half 2011 GLS Programme, if demand continues to be strong.
Apart from the supply from the GLS Programme, there are also 61,800 uncompleted units of private housing from projects in the pipeline as at 2Q2010 [9]. Of these, 32,600 units were available or could be made available for sale. These comprised units that had been launched for sale by developers, units that had pre-requisite conditions for sale [10] and which could be launched for sale immediately, as well as units with planning approvals for which pre-requisite conditions for sale could be obtained quickly from the Government and made available for sale [11].
The Government will continue to monitor the property market closely and will introduce additional measures if required later, to promote a stable and sustainable property market.
Issued by the Ministry of National Development, Ministry of Finance and Monetary Authority of Singapore
__________________
[1] Financial institutions are required to conduct checks with HDB and with one or more credit bureaus on whether the buyer has an outstanding housing loan at the time of applying for a housing loan for the new property purchase. For joint buyers, if either buyer has an outstanding housing loan, the joint buyers will be considered as having an outstanding housing loan.
[2] This is in addition to the cash over valuation amount that has to be paid in cash.
[3] The SSD will apply to the transfer or disposal of interest (including sale and gifts) of residential lands and residential units (whether completed or uncompleted).
[4] The date of purchase for computation of the holding period for SSD shall be the date when a buyer (i.e. Buyer A) exercises the option to purchase the property, or signs the sale and purchase agreement, whichever is earlier. The date of resale of the property shall be the date when the subsequent buyer (i.e. Buyer B) exercises the option to purchase the property from Buyer A, or signs the sale and purchase agreement, whichever is earlier.
[5] The amount of CPF monies plus housing loan taken for the purchase of the property cannot exceed 95% of the valuation limit (defined as the lower of property value or property price).
[6] The 10% minimum cash payment will apply to transactions where the date on which the option to purchase (OTP) was granted falls on or after 30 August 2010; or if there is no OTP, where the date of the sale and purchase agreement falls on or after 30 August 2010.
[7] Therefore, the amount of CPF monies plus housing loan that can be used for the purchase of the property will be reduced from 95% to 90%.
[8] The 70% LTV limit will apply to transactions where the date on which the option to purchase (OTP) was granted falls on or after 30 August 2010; or if there is no OTP, where the date of the sale and purchase agreement falls on or after 30 August 2010.
[9] These refer to new development and redevelopment projects with planning approvals, i.e. either a Provisional Permission (PP) or Written Permission (WP).
[10] These refer to private residential developments with Housing Developer Licence and Building Plan Approval. Under the Housing Developer (Control and Licensing) Act, a sale licence must be obtained for a project with more than 4 units, if the developer intends to sell uncompleted residential units in the development. However, the sale of the residential units can only commence with the approval of the building plans of the development.
[11] These refer to uncompleted private residential developments without pre-requisites for sale but with WP or PP granted. The sale licences could be obtained within 5 working days and building plan approvals could be obtained within 7 working days from the date of application for cases where clearances from various technical agencies are obtained and relevant documents are in order during formal submissions.
CM1 14 Sep 2009 Removal of the Interest Absorption Scheme (IAS) and Interest-Only Housing Loans (IOL), 14 Sep 2009.
Measures to Ensure a Stable and Sustainable Property Market
Joint Press Release by Ministry of National Development, Ministry of Finance, Ministry of Law and Monetary Authority of Singapore
1 Mr Mah Bow Tan, the Minister for National Development, announced today that the Government would take the following measures to ensure a stable and sustainable property market:
a) Reinstatement of the Confirmed List for the 1st Half 2010 Government Land Sales (GLS) Programme.b) Removal of the Interest Absorption Scheme (IAS) and Interest-Only Housing Loans (IOL), with effect from today, i.e. 14 Sep 2009.c) Non-extension of the Jan 2009 Budget assistance measures for the property market when the measures expire.
Reinstating the Confirmed List in 1st Half 2010 GLS Programme
2 Demand for uncompleted private housing units has picked up strongly since Feb 2009. The 10,017 units sold by developers in the first seven months of 2009 had already exceeded the 4,260 units sold for the whole of 2008. In response to the strong demand from home-buyers, developers have triggered four sites to date this year from the Reserve List of the 2nd Half 2009 GLS Programme, which together could yield about 1,600 units.
3 The Government will reinstate the Confirmed List for the GLS Programme in the 1st Half of 2010. While there are still 16 residential sites in the current Reserve List that can be triggered for sale by developers, MND will also replenish the supply when drawing up the 1st Half 2010 Reserve List to meet possible increases in demand. MND will announce the details of the 1st Half 2010 GLS Programme towards the end of the year.
Interest Absorption Scheme (IAS) and Interest-Only Housing Loans (IOL)
4 The Monetary Authority of Singapore will disallow the IAS and IOL with immediate effect from today, i.e. 14 Sep 2009. This measure will apply to all private residential projects. The only exception will be uncompleted private residential projects where the units had already been offered for sale under the IAS before 14 Sep 2009. The IOL will be disallowed with immediate effect.
5 The IAS and IOL are currently offered to buyers of uncompleted private residential properties. These schemes could encourage property speculation in a buoyant market where prices are rising rapidly, as they are forms of housing loans that entirely eliminate or substantially lower regular installment payments for property purchasers in the first few years before the properties are completed i.e. issued Temporary Occupation Permit. Under the schemes, a property purchaser will not have to make any significant payment, apart from the upfront 10-20% down-payment, until the housing project is completed. Details of these schemes are in Annex 1.
6 Genuine home-buyers can continue to purchase private housing under the standard payment scheme. The removal of the Interest Absorption Scheme and Interest-Only Loans will also encourage prospective home-buyers to consider carefully their ability to afford the properties over the long term and not rush into any purchases. This will promote a more healthy and sustainable property market in the long-run.
Property-Related Budget 2009 Assistance Measures
7 A number of measures were announced in Budget 2009 in January this year to help stabilize the property market, in view of the sharp fall in demand and considerable uncertainty in the economic outlook at the time. Please see details inAnnex 2. These measures provided developers greater flexibility to adjust supply in response to a property market downturn.
8 In view of the recent strong demand for private housing and improved conditions in the property market, the measures will not be extended when they expire. The measures are:
a) Allowing one-year extension of project completion period
b) Allowing re-assignment of Government Land Sale (GLS) sites and private land owned by foreign developers
c) Giving developers up to four years to dispose of all private residential units in the development
d) Allowing developers to rent out unsold private residential units for a maximum of four years
e) Allowing up to 2 years of property tax deferral for land under development
9 The first four measures will expire on 21 Jan 2010, and the last measure on 21 Jan 2011.
Issued by the Ministry of National Development, Ministry of Finance, Ministry of Law and Monetary Authority of Singapore
14 September 2009
CM2 20 February 2010 Seller’s Stamp Duty (SSD).
Measures To Ensure a Stable and Sustainable Property Market
1 The Government announced today the following measures to ensure a stable and sustainable property market:
a) Introducing a Seller’s Stamp Duty (SSD) on all residential properties and residential lands that are bought after today and sold within 1 year from the date of purchase [1]; and
b) Lowering the Loan-to-Value (LTV) limit to 80% for all housing loans provided by financial institutions regulated by the Monetary Authority of Singapore (MAS)The measures will take effect on 20 February 2010.
2 In September last year, the Government introduced a set of measures [2] to temper the exuberance in the private residential market. The Government has continued to monitor the property market closely. While the September 2009 measures helped to cool the property market, there are recent signs that it is starting to heat up again.
3 Demand for private housing units has spiked sharply in January this year. The number of units sold by developers in January was triple that in December 2009 and was the highest monthly total since September 2009. Prices have also increased sharply in the second half of 2009, at a faster rate compared to previous rebounds from the troughs of property cycles, and the price increase has continued in January. Mortgage lending has also increased steadily by around 12% year-on-year through 2009.
4 While the current level of speculative activity in the market is still lower than what it was at the height of the property market boom, and overall price levels are below the previous peak, there is a risk that the market could overheat in the next few months, fuelled by low global interest rates and positive sentiments associated with the economic recovery.
5 Any excessive exuberance will make the property market vulnerable to the continuing risks in the global economy. Should growth turn out weaker than expected, property buyers and speculators could face capital losses as the market corrects. Conversely, if the recovery stays on course, interest rates will eventually rise and drive up financing costs with severe implications for those who have overextended themselves.
6 Therefore, the Government has decided to introduce calibrated measures now to temper sentiments and pre-empt a property bubble from forming. We will tighten the supply of credit to the housing market to encourage greater financial prudence among property purchasers. The Govern¬ment prefers to take small steps early, rather than be forced to impose more drastic measures after a bubble has formed.
7 The Government will continue to monitor the property market closely and will introduce additional measures if required later, to promote a stable and sustainable property market.
Seller's Stamp Duty (SSD) on Residential Properties Sold within 1 Year
8 The SSD will be levied on sellers of residential properties and lands [3] bought on or after 20 Feb 2010, and sold within one year from the date of purchase [4]. Properties bought before 20 Feb 2010 will not be subject to the SSD.
9 The objective of this new tax measure is to discourage short-term speculative activity that could distort underlying prices. It is not targeted at the purchase of properties for owner-occupation or longer term investment.
10 The SSD will be applied at the standard ad valorem stamp duty rates [5] for the conveyance, assignment or transfer of property: 1% for the first $180,000 of the consideration, 2% for the next $180,000, and 3% for the balance.
11 The SSD will not be applicable to HDB flats as they are already subject to a minimum occupation period of at least one year [6].
12 IRAS will be releasing an e-tax guide on the circumstances under which SSD will apply and the procedures for paying SSD. The e-tax guide will be available at www.iras.gov.sg. Taxpayers with enquiries may call IRAS at 6351 3697 or 6351 3698. The telephone lines will be opened till 6.30 pm on 19 February 2010 and from 8.30am to 1.00 pm on 20 February 2010.
Lowering Loan-To-Value (LTV) Limit to 80% for Housing Loans
13 The LTV limit will be lowered from 90% to 80% for all housing loans provided by financial institutions regulated by the MAS. The 80% LTV limit will apply to all housing loans granted by financial institutions for private residential properties, Executive Condominiums, HUDC flats and HDB flats (including those under the Design, Build and Sell Scheme, or DBSS flats).[7]
14 Loans granted by HDB for HDB flats (including DBSS flats) will still have an LTV cap of 90%. This is because HDB flats are already subject to other criteria to prevent speculation and encourage financial prudence e.g. minimum owner occupation period and restriction on ownership to one flat per household. HDB loans are offered to only eligible first-time flat buyers or second-timers who are upgrading. They are required to utilise all of their CPF Ordinary Account balance before HDB loans will be granted. This is in line with HDB's home ownership policy of helping eligible buyers, especially first-time buyers, purchase public housing in a financially prudent manner.
15 Financial institutions' lending standards have remained prudent. Currently, less than 10% of housing loans are granted at LTVs greater than 80%, although there are signs that more housing loans are originating at higher LTV bands. In line with the objective of ensuring a stable and sustainable property market, lowering the LTV limit sends a clear signal to the financial institutions to maintain credit standards, and encourages greater financial prudence among property purchasers.
Adequate Supply in the Pipeline
16 The Government will also continue to ensure that there is adequate supply of housing to meet demand. Sites that can yield 10,550 private housing units have already made available in the Confirmed and Reserve List of the Government Land Sales (GLS) Programme in the 1st Half of 2010. This is the highest supply quantum in the history of the GLS Programme.
17 In addition, the Government placed 8 residential sites, including 2 Executive Condominium sites, which can potentially yield about 2,900 units on the Confirmed List. This was close to the highest ever potential supply of about 3,000 units (in the 2nd Half 2007 GLS Programme) from the GLS Confirmed List, since the Reserve List / Confirmed List system started in 2001. If necessary, the Government would inject more supply in the 2nd half 2010 GLS Programme.
18 Apart from the supply from the GLS Programme, there were also 60,476 uncompleted units of private housing from projects in the pipeline as at 4Q2009. Of these, 34,234 units were available or could be made available for sale. These comprised units that had been launched for sale by developers, units that had pre-requisite conditions [8] for sale and which could be launched for sale immediately, as well as units with planning approvals for which pre-requisite conditions for sale could be obtained quickly from the Government and made available for sale. [9]
Issued by the Ministry of National Development, Ministry of Finance and Monetary Authority of Singapore
19 February 2010
CM4 14 January 2011 Seller’s Stamp Duty (SSD) 16%.
Measures to Maintain a Stable and Sustainable Property Market
1 The Government announced today the following measures to maintain a stable and sustainable property market:
a) Increase the holding period for imposition of Seller’s Stamp Duty (SSD) from the current three years to four years;
b) Raise the SSD rates to 16%, 12%, 8% and 4% of consideration for residential properties which are bought on or after 14 January 2011, and are sold in the first, second, third and fourth year of purchase respectively;
c) Lower the Loan-To-Value (LTV) limit to 50% on housing loans granted by financial institutions regulated by MAS for property purchasers who are not individuals1; and
d) Lower the LTV limit on housing loans granted by financial institutions regulated by MAS from 70% to 60% for property purchasers who are individuals with one or more outstanding housing loans2 at the time of the new housing purchase.
The measures will take effect on 14 January 2011.
a) Increase the holding period for imposition of Seller’s Stamp Duty (SSD) from the current three years to four years;
b) Raise the SSD rates to 16%, 12%, 8% and 4% of consideration for residential properties which are bought on or after 14 January 2011, and are sold in the first, second, third and fourth year of purchase respectively;
c) Lower the Loan-To-Value (LTV) limit to 50% on housing loans granted by financial institutions regulated by MAS for property purchasers who are not individuals1; and
d) Lower the LTV limit on housing loans granted by financial institutions regulated by MAS from 70% to 60% for property purchasers who are individuals with one or more outstanding housing loans2 at the time of the new housing purchase.
The measures will take effect on 14 January 2011.
2 The Government's objective is to ensure a stable and sustainable property market where prices move in line with economic fundamentals. Previous Government measures have to some extent moderated the market, but sentiments remain buoyant. Low interest rates plus excessive liquidity in the financial system, both in Singapore and globally, could cause prices to rise beyond sustainable levels based on economic fundamentals. Moreover, when interest rates eventually rise, it could strain purchasers who have overextended themselves financially. Therefore, the Government has decided to introduce additional targeted measures to cool the property market and encourage greater financial prudence among property purchasers.
Extending the Holding Period for Imposition of Seller’s Stamp Duty (SSD) on Residential Properties from 3 Years to 4 Years & Raising the SSD Rates
Extending the Holding Period for Imposition of Seller’s Stamp Duty (SSD) on Residential Properties from 3 Years to 4 Years & Raising the SSD Rates
3 Currently, for residential properties bought on or after 30 August 2010, SSD3 is imposed on the sale of such properties within three years of purchase. This followed the introduction of SSD for residential properties bought on or after 20 February 2010.
4 The SSD rates will be increased sharply from 14 January 2011, so as to provide a strong disincentive for investors looking to make short term gains. The holding period for imposition of SSD will also be extended from the current three years to four years. The impact of the SSD is especially significant as it is payable regardless whether the property is eventually sold at a gain or loss.
5 Specifically, for residential properties bought4 on or after 14 January 2011, the SSD rates to be levied on the full consideration will be increased5 to as follows:
a) SSD at 16% (higher than up to 3% currently), if the property is sold in the first year of purchase, i.e. the property is held for 1 year or less from its purchase date.
b) SSD at 12% (higher than up to 2% currently), if the property is sold in the second year of purchase, i.e. the property is held for more than 1 year and up to 2 years.
c) SSD at 8% (higher than up to 1% currently), if the property is sold in the third year of purchase, i.e. the property is held for more than 2 years and up to 3 years.
d) SSD at 4% (no SSD currently), if the property is sold in the fourth year of purchase, i.e. the property is held for more than 3 years and up to 4 years.
a) SSD at 16% (higher than up to 3% currently), if the property is sold in the first year of purchase, i.e. the property is held for 1 year or less from its purchase date.
b) SSD at 12% (higher than up to 2% currently), if the property is sold in the second year of purchase, i.e. the property is held for more than 1 year and up to 2 years.
c) SSD at 8% (higher than up to 1% currently), if the property is sold in the third year of purchase, i.e. the property is held for more than 2 years and up to 3 years.
d) SSD at 4% (no SSD currently), if the property is sold in the fourth year of purchase, i.e. the property is held for more than 3 years and up to 4 years.
6 The extended SSD will not affect HDB lessees as the required Minimum Occupation Period for HDB flats is 5 years.
7 IRAS will be releasing an updated e-tax guide on the circumstances under which SSD will apply and the procedures for paying SSD6. The e-tax guide will be available at www.iras.gov.sg. Taxpayers with enquiries may call IRAS at 6351 3697 or 6351 3698.
Lower the Loan-To-Value (LTV) Limit to 50% on housing loans granted by financial institutions regulated by MAS for residential property purchasers who are not individuals
8 With effect from 14 January 20117, an LTV limit of 50% will apply to all residential property purchasers who are not individuals. This includes corporations, trusts and collective investment schemes, among others. The 50% LTV limit for housing loans will also apply to joint property purchases by an individual and a purchaser who is not an individual.
Lower the LTV limit on housing loans granted by financial institutions regulated by MAS from the current 70% to 60% for residential property purchasers who are individuals with one or more outstanding housing loans at the time of the new housing purchase
9 The LTV limit is lowered from 70% to 60% with effect from 14 January 20118 for borrowers who are individuals and have one or more outstanding housing loans (whether from HDB or a financial institution regulated by MAS) at the time of applying for a housing loan for the new property purchase.
10 However, borrowers who can show evidence that they have sold their existing properties will not be subject to the lower LTV limit when they buy a new property. Where the existing property is a private property, he can show a signed Sale & Purchase (S&P) agreement with the IRAS certificate showing that stamp duty has been paid on it. Where the existing property is a HDB flat, he can show HDB’s approval letter to sell the flat, that HDB will issue within 2 weeks of the First Appointment. These borrowers will still be able to borrow at an 80% LTV from financial institutions.
11 Borrowers without any outstanding housing loans continue to have a LTV cap of 80%.
12 These rules apply to housing loans granted by financial institutions for private residential properties, Executive Condominiums, HUDC flats and HDB flats (including DBSS flats).
13 Loans granted by HDB for HDB flats (including DBSS flats) will still have a LTV cap of 90%. HDB loans are offered to eligible Singapore citizens buying their first homes or right-sizing their flats to meet their housing needs. HDB loan applicants are required to utilise all the balance in their CPF Ordinary Account before HDB loans will be granted. Furthermore, those taking a second concessionary HDB loan must use the CPF refund and 50% of the cash proceeds from the sale of their previous flat before they are granted an HDB loan. This is to ensure that eligible buyers, especially first-time buyers, purchase public housing in a financially prudent manner.
10 However, borrowers who can show evidence that they have sold their existing properties will not be subject to the lower LTV limit when they buy a new property. Where the existing property is a private property, he can show a signed Sale & Purchase (S&P) agreement with the IRAS certificate showing that stamp duty has been paid on it. Where the existing property is a HDB flat, he can show HDB’s approval letter to sell the flat, that HDB will issue within 2 weeks of the First Appointment. These borrowers will still be able to borrow at an 80% LTV from financial institutions.
11 Borrowers without any outstanding housing loans continue to have a LTV cap of 80%.
12 These rules apply to housing loans granted by financial institutions for private residential properties, Executive Condominiums, HUDC flats and HDB flats (including DBSS flats).
13 Loans granted by HDB for HDB flats (including DBSS flats) will still have a LTV cap of 90%. HDB loans are offered to eligible Singapore citizens buying their first homes or right-sizing their flats to meet their housing needs. HDB loan applicants are required to utilise all the balance in their CPF Ordinary Account before HDB loans will be granted. Furthermore, those taking a second concessionary HDB loan must use the CPF refund and 50% of the cash proceeds from the sale of their previous flat before they are granted an HDB loan. This is to ensure that eligible buyers, especially first-time buyers, purchase public housing in a financially prudent manner.
Adequate Supply in the Pipeline
14 There is an ample supply of private residential units and buyers need not rush to buy now. The Government will continue to ensure an adequate supply of housing to meet demand.
15 The annual average take-up9 of private residential units between 2007 and 2010 is about 12,700 units. Thus far, the sites awarded under the Government Land Sales (GLS) Programme in 2010 will already yield about 13,300 units. In the GLS Programme for the first half of 2011, we will make available sites that can yield about 14,300 private housing units, of which about 8,100 units will be from sites on the Confirmed List.
16 As at 3Q2010, there were about 64,400 uncompleted units of private housing from projects in the pipeline10. Of these, about 33,800 units were still unsold. This is equivalent to about 3 years of supply based on the average annual take-up over the last 4 years. The 33,800 unsold units in the pipeline comprised 3,300 units that had been launched for sale by developers and 11,400 units which had the pre-requisite conditions for sale11 and could be launched for sale immediately. The remaining 19,100 units with planning approvals did not have the pre-requisite conditions for sale but these could be obtained quickly from the Government12. The Government will also make available more supply in future GLS programmes. Buyers should bear in mind this supply in the pipeline when deciding whether to buy now.
17 The Government will continue to monitor the property market closely and take further steps to promote a stable and sustainable property market if necessary.
Issued by the Ministry of National Development, Ministry of Finance and Monetary Authority of Singapore
13 January 2011
15 The annual average take-up9 of private residential units between 2007 and 2010 is about 12,700 units. Thus far, the sites awarded under the Government Land Sales (GLS) Programme in 2010 will already yield about 13,300 units. In the GLS Programme for the first half of 2011, we will make available sites that can yield about 14,300 private housing units, of which about 8,100 units will be from sites on the Confirmed List.
16 As at 3Q2010, there were about 64,400 uncompleted units of private housing from projects in the pipeline10. Of these, about 33,800 units were still unsold. This is equivalent to about 3 years of supply based on the average annual take-up over the last 4 years. The 33,800 unsold units in the pipeline comprised 3,300 units that had been launched for sale by developers and 11,400 units which had the pre-requisite conditions for sale11 and could be launched for sale immediately. The remaining 19,100 units with planning approvals did not have the pre-requisite conditions for sale but these could be obtained quickly from the Government12. The Government will also make available more supply in future GLS programmes. Buyers should bear in mind this supply in the pipeline when deciding whether to buy now.
17 The Government will continue to monitor the property market closely and take further steps to promote a stable and sustainable property market if necessary.
Issued by the Ministry of National Development, Ministry of Finance and Monetary Authority of Singapore
13 January 2011
1"Purchasers who are not individuals” refer to purchasers who are not natural persons. These include but are not limited to corporations, trusts and collective investment schemes.
2Financial institutions are required to conduct checks with HDB and with one or more credit bureaus on whether the purchaser has an outstanding housing loan at the time of applying for a housing loan for the property purchase. For joint purchasers, if either purchaser has an outstanding housing loan, the joint purchasers will be considered as having an outstanding housing loan.
3The SSD will apply to the transfer or disposal of interest (including sale and gifts) of residential lands and residential units (whether completed or uncompleted).
4The date of purchase for computation of the holding period for SSD shall be the date when a buyer (i.e. Buyer A) exercises the option to purchase the property, or signs the sale and purchase agreement, whichever is earlier. The date of sale of the property shall be the date when the subsequent buyer (i.e. Buyer B) exercises the option to purchase the property from Buyer A, or signs the sale and purchase agreement, whichever is earlier.
5Currently, the SSD rates are levied at the same rate as buyer's stamp duty, i.e. 1% for the first $180,000, 2% for the next $180,000 and 3% on the balance. The SSD rates are tiered according to the duration of the holding period, i.e. the seller pays the full SSD rate if the residential property is sold in the first year of purchase; 2/3 the full SSD rate if the sale is in the second year; 1/3 the full SSD rate if in the third year.
6SSD is to be paid within 14 days of the execution of the Agreement (i.e. exercise of Option or signing of Agreement). If the Agreement is executed overseas, upon receipt of the Agreement in Singapore, the SSD must be paid within 30 days.
7The 50% LTV limit will apply to transactions where the date on which the option to purchase (OTP) was granted falls on or after 14 January 2011; or if there is no OTP, where the date of the Sale & Purchase agreement falls on or after 14 January 2011.
8The 60% LTV limit will apply to transactions where the date on which the option to purchase (OTP) was granted falls on or after 14 January 2011; or if there is no OTP, where the date of the Sale & Purchase agreement falls on or after 14 January 2011.
9Take-up refers to the number of private residential units, including Executive Condominium (EC) units, sold by developers.
10These refer to new development and redevelopment projects with planning approvals, i.e. either a Provisional Permission (PP) or Written Permission (WP).
11These refer to private residential developments with Housing Developer Licence and Building Plan Approval. Under the Housing Developer (Control and Licensing) Act, a sale licence must be obtained for a project with more than 4 units, if the developer intends to sell uncompleted residential units in the development. However, the sale of the residential units can only commence with the approval of the building plans of the development.
12These refer to uncompleted private residential developments without pre-requisites for sale but with WP or PP granted. The sale licences could be obtained within 5 working days and building plan approvals could be obtained within 7 working days from the date of application for cases where clearances from various technical agencies are obtained and relevant documents are in order during formal submissions.
CM6 5 Oct 2012 Restricts Loan Tenure for Residential Properties.
MAS Restricts Loan Tenure for Residential Properties
Singapore, 5 October 2012...The Monetary Authority of Singapore (MAS) will restrict the tenure of loans granted by financial institutions for the purchase of residential properties. MAS’ move is part of the Government’s broader aim of avoiding a price bubble and fostering long term stability in the property market.
2 The maximum tenure of all new residential property loans will be capped at 35 years. In addition, loans exceeding 30 years tenure will face significantly tighter loan-to-value (LTV) limits. This will apply to both private properties and HDB flats. The new rules will take effect from 6 October 2012.
Long tenure loans fuel property prices
3 The new rules aim to curb continued upward pressure on residential property prices, driven by low interest rates and rapid credit growth.
4 Previous rounds of Government measures have had a moderating effect on residential property prices. There is also significant supply of housing that will come onto the market over the next two years. However, prices in both the HDB resale market and private residential property have continued to rise in Q2 and Q3 of 2012.
5 The current climate of low interest rates, globally and in Singapore, is likely to persist for some time. It will continue to spur demand in the residential property market, pushing up prices beyond sustainable levels. The eventual correction could be painful to borrowers and destabilise the economy.
6 At the same time, financial institutions have been lengthening the tenures of residential property loans. Over the last three years, the average tenure for new residential property loans has increased from 25 to 29 years. More than 45% of new residential property loans granted by financial institutions have tenures exceeding 30 years.
7 Long tenure loans pose risks to both lenders and borrowers. The lower initial monthly repayments, made possible by long loan tenures and the current low interest rates, may lead borrowers to over-estimate their ability to service the loans, and take a bigger loan than they can really afford. A rising property market may give false confidence to both borrowers and lenders that should there be difficulty in servicing the loan they can always sell the property at a higher price. In reality, long tenure loans impose a larger debt repayment burden on borrowers as interest accumulates over a longer period. When interest rates eventually rise, borrowers who have overextended themselves will have difficulties repaying their loans. If property prices fall, financial institutions may be caught holding the bad loans.
8 Mr Tharman Shanmugaratnam, Chairman of MAS, said, “Monetary conditions worldwide are far from normal. QE3 and low interest rates have made credit easy, but this will eventually change. We are taking this step now to require more prudent lending, and will continue to watch the property market carefully. We will do what it takes to cool the market, and avoid a bubble that will eventually hurt borrowers and destabilise our financial system.”
New rules on loan tenure
9 The new MAS rules impose an absolute limit of 35 years on the tenure of all loans for residential property. This will apply to loans to both individual and non-individual borrowers, as well as refinancing loans1, from 6 October 2012.2
10 In addition, MAS will lower the LTV ratio for new residential property loans to borrowers who are individuals, if:
- the tenure exceeds 30 years; or
- the loan period extends beyond the retirement age of 65 years.
For these loans, the LTV limit will be:
- 40% for a borrower with one or more outstanding residential property loans3; and
- 60% for a borrower with no outstanding residential property loan.
11 MAS will also lower the LTV ratio for residential property loans to non-individual borrowers from 50% to 40%.
***
1 Where a borrower applies for a refinancing facility in respect of any balance outstanding under a residential property loan, the sum of the tenure of the refinancing facility and the number of years since the first residential property loan granted to the borrower for the purchase of that residential property was first disbursed, cannot exceed 35 years.2 The rules will apply to new loans granted to individuals and non-individual borrowers, by financial institutions regulated by MAS, for the purchase of residential property, if the date when the option to purchase was granted or, where there is no option to purchase, the date of the sale and purchase agreement, is on or after 6 October 2012. For re-financing facilities, the rules will apply where the application date of such facilities is on or after 6 October 2012.
3 The outstanding loan may be either a loan from HDB or a financial institution regulated by MAS.
Tuesday, October 2, 2012
Friday, September 28, 2012
Property cooling steps net $500m for taxman
THE taxman has collected more than half a billion dollars from additional stamp duties imposed as part of property cooling measures.
The additional buyer's stamp duty (ABSD) has contributed the bulk of that - $450million between its inception on Dec8 last year and the end of last month.
A further $51million has come from the seller's stamp duty since it was implemented in February 2010, the Inland Revenue Authority of Singapore (Iras) said.
According to Iras' annual report, it collected $2.5 billion in stamp duty from sale and purchase agreements in its financial year ended March 31, 2011.
The ABSD take includes about $261million collected from foreigners who are not permanent residents (PRs), who bought about 1,400 homes in the nine months to the end of last month, Iras told The Straits Times. These foreigners comprised about one in four of the buyers who have paid the additional tax.
The figures seem to suggest that foreign buying interest has picked up again after the market initially cooled in response to the measures. In the first four months after the tax was introduced, foreigners paid $66.2million in ABSD on the purchase of 369 private homes.
Afterwards, the tax take - and transactions - shot up, with about $200million collected in the subsequent five months on more than 1,000 homes bought.
Experts said this trend is also borne out on the ground.
The Urban Redevelopment Authority's Realis website shows that non-PR foreigners bought 358 homes in the first three months of the year - or 5.4per cent of private home purchases. In the second quarter, they snapped up 637 homes - 6.7per cent of private home sales - led largely by renewed interest in city centre and city fringe homes.
These numbers are still well below the quarterly sales average of 1,369 foreign-bought units seen last year.
International Property Advisor chief executive Ku Swee Yong said that while foreign buyers held back from purchases when the additional buyer's stamp duty was first announced, continued uncertainty in the global economy has led them to reconsider Singapore. "Singapore is still a safe haven, and for high-net-worth individuals, their goal of wealth preservation might have overridden their concerns of the ABSD," he said.
Mr Colin Tan, research head at Chesterton Suntec International, said foreigners are typically long-term investors and not speculators.
In that respect, Singapore remains attractive, due to the strength of its currency and economy, and foreigners have streamed back into the market after the initial "psychological impact" of the ABSD, he said.
The tough cooling measures last December slapped a 10 per cent ABSD on all home purchases by foreigners. PRs had to fork out only an extra 3per cent on their second and subsequent home purchases, while Singaporeans had to do so only for their third home onwards.
Two tips from S'pore story
Former prime minister Lee Kuan Yew addressing 600 guests alongside moderator Michael Tay at a dialogue yesterday during the 7th Russia-Singapore Business Forum. Mr Lee was asked for his views on a broad range of issues in the 40-minute session. -- ST PHOTO: DESMOND WEE
A RUSSIAN governor on the brink of launching economic reforms yesterday sought the advice of former prime minister Lee Kuan Yew, who gave him two tips from Singapore's story on attracting investors.
First, ensure security for investors and their property. Second, remove bureaucratic hurdles that prevent them from carrying on their business.
While there were countries in the region that take investors "hostage", Singapore had made efforts to help the latter succeed, said Mr Lee.
"We take the opposite line. An investor who comes in, it is our duty to help him succeed, and when he succeeds, his friends will know about it and they will also come in," he told Mr Andrey Turchak, governor of the north-western Pskov region, which is engaging Jurong Consultants to help set up a special economic zone.
"If you do the same in Russia, you will succeed."
Mr Lee was addressing 600 guests at the 7th Russia-Singapore Business Forum organised by the Singapore Business Federation at the Marina Bay Sands. The four-day event, which started on Monday, gathered businessmen from Russia, Singapore and the region.
At the 40-minute dialogue, Mr Lee was asked for his views on a broad range of issues, from the territorial dispute in the South China Sea to how the young should prepare themselves for the future.
Replying, Mr Lee noted that the dispute boiled down to two alternatives.
"The safest way and also the least confrontational way is to go by the United Nations Convention on the Law of the Sea," he said. The other way, he noted, is to have it worked out between China and the individual claimants, as sought by China.
Mr Lee added: "The disparity, size and strength will decide in whose favour it will be."
When a young man from Kazakhstan asked for advice for his generation, Mr Lee said: "Well, I can't give advice to young people in Kazakhstan and Russia because I don't know their condition and how fast it's changing. But for Singapore, we tell them: Expect change and expect rapid change."
One finance entrepreneur wanted to know Mr Lee's vision of the world in 50 years, but the former prime minister said: "I can't tell you what the world will look like in 10 years, let alone 50 years."
But he did note that technology was changing the way people communicate, making it a truly globalised world.
One participant appeared to be worried about recent moves by Singapore to cut the inflow of foreigners. Mr Lee assured them that the Republic was still taking in foreign workers, but also highlighted Singaporeans' concerns over being squeezed out of their own country. "We will continue taking in foreigners at a pace which the rest of the population, Singapore citizens, will find comfortable," he said.
"We are short of workers. Today, we have 5.2 million people, of whom 1.5 million are foreign workers, and we need more. And although they are coming in at a slower pace, they are coming in."
One question, however, was a bit more personal. Entrepreneur Sergei Beloussov asked when Mr Lee's books will be available electronically on Apple iBook or on Kindle, so more people could know the Singapore story.
Mr Lee laughed, saying he would ask his publisher to consider, prompting moderator Michael Tay to ask: "Maybe we give ourselves a one-year deadline - by next year we hope to get your book online in e-books and Kindle?"
"Okay," replied Mr Lee with a laugh.
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