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Some people who recently realized that they are now ready to venture the real estate market are now thinking twice because of the country’s cooling measures. Many are perplexed with how things work and the regulations that they need to follow. Here’s an overview of what buyers need to know regarding the rules when getting a property in Singapore. Total Debt Servicing Ratio – with the TDSR, buyers can only be granted a limited amount when asking for home mortgage. Some factors that the banks would consider are your car loans, personal loans and even credit card bills before they can grant your application for home loan. This is one good reason why you should first pay your debt before getting into the real estate industry. Additional Buyer’s Stamp Duty – first time home buyers can best take advantage of ABSD since they don’t have to pay any stamp duty at all. However, for the second and subsequent home purchases, they have to pay 7% and 10% of the property’s value respectively as long as they are Singapore citizens. It’s a different case for permanent residents, who are required to pay 5% of the property’s total value for their ABSD and 13% for the foreign investors. Seller’s Stamp Duty – unit owners who would sell their units 12 months after their purchase would have to pay this latest tax called SSD. This is to prevent the possibility of destabilizing the real estate market as a result of buy-and-sell trades. These are just some of the additional expenses that buyers have to consider when buying a unit in Singapore (e.g. Adana at Thomson, Thomson Impressions, Principal Garden etc.). Of course, the taxes are higher for foreign investors as well as the regulations, compared to those who are permanently residing at the country. ~Read more on foreign / overseas property, please click on The Peak @ Cambodia [Not affected by cooling measures]

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.

 

**If you are keen to read on latest overseas property, you may like to visit The Peak @ Cambodia. (Cooling Measures not applicable)

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