Monday, 14 January 2013

How Singapore 7th Property Cooling Measure Affects Johor Property

Changes at glance. Application to all residential properties.

Additional Buyer Stamp Duty (ABSD)


Buyer 1st property  2nd Property 3rd and subsequent Property
Singapore citizen 


Existing  N.A N.A 3%
Revised N.A 7% 10%




Permanent residents


Existing  N.A 3% 3%
Revised 5% 10% 10%




Foreigners and non-individual (corperate)


Existing  10% 10% 10%
Revised 15% 15% 15%


Loan to Value Limits and Minimum Cash down Payment


1st property  2nd Property 3rd and subsequent Property
LVT


Existing  80% or 60%* 60% or 40%* 60% or 40%*
Revised No Change 50% or 30%* 40% or 20%*




Minimum Down Payment


Existing  5% (LVT of 80%) 10%(LVT of 60%) 10% 10%
Revised No Change 25% 25%




Non-Individual Borrowers


Existing  40% 40% 40%
Revised 20% 20% 20%
* If loan tenure is more than 30 years or extends past age 65.


New measure related to HDB
  1. Mortgage Servicing Ratio (MSR) will cap at 30% for financial institution and 35% for HDB loan.
  2. PR are not allowed to sublet their whole flat, only limited to sublet room.
  3. PR who owns a HDB flat must sell their flat within 6 months after buying a private residential property in Singapore.
New Measure related to Executive Condominium (EC)
  1. the maximum floor area will be capped at 160 squares metres.
  2. the dual key unit will be restricted only to multi-generational families.
  3. Developers of future EC sale sites from the Government Land Sales programme will only be allowed to launch units for sale 15 months from the date of award of the sites or after the physical completion of foundation works, whichever is earlier.   
New Measure for the Industrial Property Market: Seller's Stamp Duty

The Government is introducing Seller's Stamp Duty (SSD) on industrial property to discourage short-term speculative activity which could distort the underlying prices of industrial properties and raise costs for businesses.

The following SSD rates will be imposed on industrial properties and land bought and sold within three years of the date of purchase:
  1.  SSD at 15% if the property is sold in the first year of purchase, i.e. the property is held for one year or less from the date of purchase.
  2. SSD at 10% if the property is sold in the second year of purchase, i.e. the property is held for more than one year and up to two years from the date of purchase.
  3. SSD at 5% if the property is sold in the third year of purchase, i.e. the property is held for more than two years and up to three years from the date of purchase.
 These SSDs will apply for industrial properties and land bought on or after 12 January 2013.

The message from Singapore government is very clear. They want a stable and sustainable property market which will last for many years. The preventive measurement is in placed to avoid property burst when the new flood of HDB and condominium hit the market starting from next year. Going forward, the property price might drop slightly but for sure government has set their baseline to support the long term growth.  This will be compensated with the rising rental as people think twice before committed to purchase the property.  However, impact to 1st time buyer is very limited.

The new measures have accelerated the path for people to buy property in JB especially for PRs and foreigner. The crowd will flow to JB city and nusajaya (within Iskandar) to invest property since it's cheaper and well accessible with opening of all the new highways. Hence, don't be surprise if JB condominium hits 1200psf in near future. Good Luck!




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