Archive for February, 2011

HDB Scraps Siblings Scheme

Tuesday, February 15th, 2011

by Sharon See

SINGAPORE – With immediate effect, unmarried Singaporean and permanent resident siblings under the age of 35 and whose parents live overseas can no longer buy a new or resale Housing & Development Board flat.

The move was announced by Senior Minister of State for National Development and Education Grace Fu in Parliament yesterday, in response to questions by Marine Parade MP Lim Biow Chuan on the rationale of the previous scheme which allowed the two groups to do so, on a case-by-case basis with certain conditions attached.

The HDB had said last month that the scheme was under review, following media reports about some Singaporeans’ concerns.

Ms Fu said yesterday that, with the liberalisation over the years of the subletting market for HDB flats, the Citizen-Singapore PR sibling scheme – introduced in 1990 – is no longer necessary. Said Ms Fu: “The sublet market (then) for HDB flats and rooms was limited, and there were few viable housing options for these siblings.”

Now, the two groups can either rent a room or a small flat from the open market, Ms Fu noted.

Ms Fu said that, as HDB has been “very stringent in assessing applications for this scheme, the number of such cases is small”. She added: “There are about 300 cases each year, or less than 1 per cent of total flat transactions.”

(Via Today, 15 Feb 2011)

While some property analysts felt the small number of approved applications meant that the scheme was redundant – especially when housing demand is high – SLP International director of research and consultancy Nicholas Mak said he was puzzled by the decision to cull the scheme.

Said Mr Mak: “Why target this group of people – siblings who want to get together – especially if they form such a small group?

Separately in Parliament, National Development Minister Mah Bow Tan said the Government will continue to monitor the property market closely and take further steps, if necessary, to promote a stable and sustainable property market.

He said that, despite the large supply in the pipeline, market sentiment remained bullish at the end of last year, with the majority of buyers being Singaporean.

The Government was particularly concerned that low interest rates plus excessive liquidity in the financial system, in Singapore and globally, could further drive up demand for private housing, causing prices to overshoot economic fundamentals.

Thus, it had introduced additional measures last month to pre-empt a property bubble from forming, temper demand and encourage greater financial prudence among property buyers, said Mr Mah.

New measures to cool Singapore’s property market

Friday, February 11th, 2011

The new rulings on seller’s stamp duty (SSD) doesn’t affect HDB owners at all, since now all HDB owners have to stay in their flats a minimum of 5 years.

If you are looking to sell your private property within the first 4 years, or if you are looking to purchase a 2nd property (HDB owners looking to purchase private property included), then the new rulings will affect you.

Read on for details.

SINGAPORE – The Singapore government today announced new measures to maintain a stable and sustainable property market, which will take effect by tomorrow, January 14.

From tomorrow, the holding period for the imposition of Seller’s Stamp Duty (SSD) will be increased from the current three years to four years.

Currently, for residential properties bought on or after 30 August 2010, SSD is imposed on the sale of such properties within three years of purchase. This followed the introduction of SSD for residential properties bought on or after 20 February 2010.

The SSD rates will also be increased sharply so as to provide a strong disincentive for investors looking to make
short term gains. The impact of the SSD is especially significant as it is payable regardless whether the property is eventually sold at a gain or loss.

For residential properties bought on or after 14 January 2011, the SSD rates to be levied on the full consideration will be increased to as follows:

1. SSD at 16 per cent (higher than up to 3 per cent currently), if the property is sold in the first year of purchase, i.e. the property is held for 1 year or less from its purchase date.
2. SSD at 12 per cent (higher than up to 2 per cent currently), if the property is sold in the second year of purchase, i.e. the property is held for more than 1 year and up to 2 years.
3. SSD at 8 per cent (higher than up to 1 per cent currently), if the property is sold in the third year of purchase, i.e. the property is held for more than 2 years and up to 3 years.
4. SSD at 4 per cent (no SSD currently), if the property is sold in the fourth year of purchase, i.e. the property is held for more than 3 years and up to 4 years.

Currently, the SSD rates are levied at the same rate as buyer’s stamp duty, i.e. 1 per cent for the first $180,000, 2 per cent for the next $180,000 and 3% on the balance. The SSD rates are tiered according to the duration of the holding period, i.e. the seller pays the full SSD rate if the residential property is sold in the first year of purchase; 2/3 the full SSD rate if the sale is in the second year; 1/3 the full SSD rate if in the third year.

Changes to Loan-To-Value limit

The Loan-To-Value (LTV) limit on housing loans granted by financial institutions regulated by MAS for property purchasers who are not individuals will be lowered to 50 per cent. This includes corporations, trusts and collective investment schemes, among others, as well as to joint property purchases by an individual and a purchaser who is not an individual.

Meanwhile, the LTV limit on housing loans granted by financial institutions regulated by MAS individuals with one or more outstanding housing loans at the time of the new housing purchase will be lowered from 70 per cent to 60 per cent.

However, borrowers who can show evidence that they have sold their existing properties will not be subject to the lower LTV limit when they buy a new property. Where the existing property is a private property, he can show a signed Sale & Purchase (S&P) agreement with the IRAS certificate showing that stamp duty has been paid on it. Where the existing property is a HDB flat, he can show HDB’s approval letter to sell the flat, that HDB will issue within 2 weeks of the First Appointment. These borrowers will still be able to borrow at an 80 per cent LTV from financial institutions.

Borrowers without any outstanding housing loans continue to have a LTV cap of 80 per cent.

These rules apply to housing loans granted by financial institutions for private residential properties, Executive Condominiums, HUDC flats and HDB flats (including DBSS flats).

Loans granted by HDB for HDB flats (including DBSS flats) will still have a LTV cap of 90 per cent.

The Government will continue to monitor the property market closely and take further steps to promote a stable and sustainable property market if necessary.

(via AsiaOne, 13 Jan 2011)