The government has made changes to the property cooling measures, in the sellers stamp duty (SSD) and Total Debt Servicing Ratio (TDSR). The rules will take effect beginning 11 March. The joint statement by Ministry of National Development and Ministry of Finance was made on 10 March. However, the loan-to-value limits and the additional buyers stamp duty were retained. Buyers who sell the property after 3 years from the date of purchase will not attract SSD.
Initially, homebuyers who sold their property within 4 years from the purchase date attracted between 4-16% SSD on the value of the property. This has seen a reduction in the volume of property sold before the 4-year period since January 2011 when it was introduced.
The government has reduced the period when the sold property can attract SSD from 4 years to 3 years. The rate has also been reduced by four percentage points each year. The new SSD rates range between 4 to 12%. Those selling the property within the first year will pay 12% instead of the previous 16%, those selling within 2 years will pay 8% instead of 12% and those selling within three years will pay 4% instead of 8%.
A lady by the name of Debbie, who was at the Park Place Residences showflat, was optimistic that the change in rules came with more peace of mind and flexibility. Park Place Residences by LendLease is at Paya Lebar Quarter and it opened for preview on March 11. Paya Lebar Quarter is being flaunted as the next regional hub. The development with 429 units is the third to be launched in 2017 after The Clement Canopy by UOL and Grandeur Park Residences by CEL. The latest launches had recorded strong sales even before the new rules came in force.
Another potential property buyer at The Clement Canopy observed that the SSD change would mainly profit upgraders moving from HDB to condo.
Another cooling measure that has been tweaked is the total debt-servicing ratio for homeowners borrowing against their residential home. If a homeowner has 50% or below outstanding loan on the value of the property, the TDSR rules will no longer be applied to them. This is set to help mainly retirees to raise money on their home. The move comes after sentiments were raised by home borrowers of their inability to monetize their homes during retirement.
The change in SSD rules will benefit the newly launched condos since it applies to residential homes purchased from March 11, 2017.
According to Mr. Tay Kah Poh, executive director Knight Frank, the changes in SSD gives property buyers more flexibility as they weight their options when selling.