With effect from 11 March 2017, the Government will make calibrated adjustments to the Seller's Stamp Duty ("SSD") regime and Total Debt Servicing Ratio ("TDSR") framework in Singapore.
What are the adjustments made?
Revamped SSD rates:
How will the adjustments affect you?
1. Generate more options
Residential property sellers need not wait for more than 4 years to sell their properties in order to avoid incurring SSD.
This means that there is more flexibility for one to deal with his/her property, especially in the circumstances where one is facing financial constraints or unexpected hardships.
For investors, one need not wait for an additional year to flip the residential property. Investors need not be tied down by ongoing mortgage payments and outgoings such as property taxes, etc for an additional year, and have the flexibility to sell the property and reap the financial returns earlier.
2. Generate more profits
Lauded as one of the world’s most powerful property markets, property prices in Singapore are undoubtedly competitive. With lowered SSD rates, residential property sellers will inevitably pocket more profits from the sale of the properties.
3. Generate more cash flow
The removal of TSDR for mortgage equity withdrawal loans with LTV 50% and below entails that one may now montetise his/her residential property to obtain cash.
For people, especially retirees, who have little cash on hand and only have the residential property as an asset, they will benefit greatly from the said removal of TSDR as they will have greater flexibility to make use of the residential property and borrow money against the value of the property to obtain cash from financial institutions.
Therefore, the above adjustments to the cooling measures in Singapore entail that sellers -regardless if they are investors or home buyers - will have more options to choose how they wish to deal with the property within a less restricted time frame and capitalise on the increasingly positive buying sentiment.