If you are one of those who are ready to get a new real estate investment, you’re probably confused with all the rules and regulations particularly with the cooling measures. Introduced in 2009, many potential buyers had to keep up with the upcoming changes which can either finalize their decision and get a new home or keep the money and save it for later. So what really are these cooling measures and how it can affect local and foreign real estate buyers?
- Increase in the ABSD or Additional Buyer’s Stamp Duty – before, if foreigners will buy a house in Singapore, they only have to pay 10% ABSD. But with the new cooling measures, it increased to 15 percent instead. Moreover, Singaporeans who will purchase their third unit used to pay only 3% ABSD. Whereas, the new measures would require them to pay 7% on their second purchased property and 10% on the next properties they will buy.
- Firmer regulations when getting a loan – the Loan-to-Value limits will be tighter especially to those who have existing bank loans. For first timers, only 80% of the total property value can be financed thru banks just like before. However, for second housing loans, buyers can only ask as much as 50% of the property value and 40% of the house value for their third housing loans.
- Bigger cash down payment is required – companies used to ask only 10% of the property value then a buyer can immediately sign the contract as soon as they give their down payment. Today, they are now required to give at least 25% of the total property value as their down payment.
So if you’re eyeing to buy any of the new properties in Singapore like Adana @ Thomson, Thomson Impressions or the North Park Residences to name a few, ask your agent to know what your options are. If they can’t give you the clarifications you need, best that you ask someone from the bank where you would apply your mortgage before signing anything in black and white.