Property Ownership and Investment

Every Singaporean knows this. Having a home is a prized asset and definitely an invaluable investment as property prices have been consistently going up. Even during the COVID-19 pandemic, property prices are still sky rocketing.

At SingCapital, we believe that financial planning should be holistic. We should be looking at all aspects of wealth accumulation and growth beyond just cash. With PropNex as one of SingCapital’s key investors, SingCapital has the capability and ability to advise clients on their property ownership and investment.

Here’s what you need to know about property ownership rules in Singapore

All aspiring property investors in Singapore should familiarise themselves with some important abbreviations: SSD, ABSD, TDSR and LTV ratio. 

What is it? How it impacts property investors
Seller’s Stamp Duty (SSD) A duty payable if you sell a residential property within 3 years of buying it. Within 1 year: 12%* 
More than 1 year and less than 2 years: 8%*
More than 2 years and less than 3 years: 4%*
3 years or more: 0%

*Percentage is higher of market value or selling price.
Additional Buyer’s Stamp Duty (ABSD) A duty payable if you wish to buy another residential property while already owning one in Singapore. For Singaporean buying 2nd residential property: 12%
For Singaporean buying 3rd and subsequent residential property: 15%
For Singapore PR buying first residential property: 5%

For Singapore PR buying 2nd and subsequent residential property: 15%

Foreigners buying any residential property: 20%
Total Debt-to-Servicing Ratio (TDSR) A financial framework that limits your monthly debt repayment to a portion of your gross income. Your combined debt repayments (including housing loans) must not exceed 60% of your gross monthly income.

This limits how much you can borrow to pay for your investment properties.
Loan-to-Value Ratio (LTV ratio) A financial framework that determines how much housing loan you can borrow. Decreases with number of active mortgages. LTV is expressed based on the property’s value. 
1st mortgage: 55% or 75% of property value
2nd mortgage: 25% or 45% of property value
3rd mortgage onwards: 15% or 35% of property value

Note: The lower rate applies when the loan tenure exceeds 30 years, or extends beyond the borrower’s age of 65 years.

When investing in property, these four regulations will impact your ability to finance your property transactions. And that is where SingCapital comes in. We help you to structure your finances to ensure that you do not take up too much debt whilst ensuring you have the ability to pay off these financial obligations.

Whether you are looking at buying your first home, or investing into multiple properties, our consultants will be able to advise you from the start to finish to ensure that the properties you have acquired becomes a part of your lasting legacy.

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