With immediate effect, the Government has introduced two new measures to cool down the property market.
Introducing Seller’s Stamp Duty (SSD) for Properties Sold Within a Year
Properties that were bought before 20th February 2010 will not be subjected to the SSD. The SSD will be levied on sellers of residential properties and lands bought on or after today.
HDB flats are exclused from the SSD as they do already have a minimum occupancy period of at least one year.
The objective is to discourage possible speculation in the market and is not meant for purchase of properties for owner-occupation or longer term investment.
Calculation of the SSD will be of the same manner as the stamp duty when the purchaser bought the property.
The seller will have to pay the stamp duty fees immediately after the buyer exercises the option or sales & purchase agreement within 14 days.
Lowering Loan-To-Value (LTV) Limit to 80% for Housing Loans
The LTV limit will be lowered from 90% to 80% for all housing loans provided by financial institutions (FIs) regulated by MAS. This is applicable to all housing loans granted by FIs to private residential properties, ECs, HUDCs and HDBs.
Loan from HDB will still be capped at 90% to assist first time home buyers and second upgraders. Since HDB has already many criteria to prevent speculations, the LTV cap will only be limited to FIs.
Most FIs have already been practicising 80% LTV since the last measures from the Government to cool down the market.
This move will ensure that the FIs have a better credit standing and practice prudence when granting loans to property purchasers.
Pumping Supply of Housing in the Pipeline
The Government will ensure that there is adequete supply of housing to meet demand.
In the statistics, they have already released 8 residential sites, the highest ever potential supply since the GLS (Government Land Sales) has started in 2001.
Read the official statement from URA here.