i) In Sept 09, the Government introduced few measures to temper the exuberance in the private residential market.
- Removal of Interest Absorption Scheme and Interest-Only housing loans
- Resumption of Confirmed List under Government Land Sales Programme in 1H 2010
- Non-extension of property-related measures in Budget 09
ii) On 13 Jan10, HDB announced a policy change to sub-letting of HDB rooms.
ii) On 13 Jan10, HDB announced a policy change to sub-letting of HDB rooms.
- Room rental does not require HDB’s approval, no change
- For sub-letting of rooms from 1 Feb 10, owners must register with HDB within 7 days from the starting date of the tenancy
- For sub-letting commenced before 1 Feb 10, owners are given 6 months from 1 Feb 10 to register the sub-letting
- Owners must register any new tenancy, renewal, termination, or any change to the particulars of the sub-tenants
- Registration of sub-letting can be done online or at the branch office
iii) On 19 Feb 2010, two measures were announced by the MND, MOF and MAS, to promote a stable and sustainable property market.
iii) On 19 Feb 2010, two measures were announced by the MND, MOF and MAS, to promote a stable and sustainable property market.
- Seller’s Stamp Duty (SSD) on residential properties/lands sold within 1 year
• Properties bought before 20 Feb 2010 will not be subject to the SSD.
• SSD applies to transfer or disposal of interest (including sale and gifts)
• Properties bought before 20 Feb 2010 will not be subject to the SSD.
• SSD applies to transfer or disposal of interest (including sale and gifts)
of residential units/lands (whether completed or uncompleted).
• Resale ECs and HUDCs are not subject to MOP, hence SSD will apply to them.
• All HDB flats are subject to MOP of at least 1 year, hence SSD will not apply.
• Date of purchase to compute holding period for SSD is the date of exercising OTP or signing S&P, whichever is earlier. The date of resale of the property is the date of exercising OTP or signing S&P by the subsequent buyer, whichever is earlier.
• SSD must be paid within 14 days from date of exercising OTP or signing S&P. If the Agreement is executed overseas, within 30 days from such dates.
• Objective of SSD is to discourage short-term speculative activity, not targeted at the purchase of properties for owner-occupation or longer term investment.
- Lowering of Loan-to-Value (LTV) limit to 80%, from 20 Feb 2010
• Applicable to housing loans granted by financial institutions for private residential properties, ECs, HUDCs, HDB flats and DBSS with bank loans.
• HDB flats and DBSS with HDB loans will still have 90% LTV as they are already subject to other criteria to prevent speculation and encourage financial prudence.
• The 80% LTV limit will apply to transactions where OTP was granted on or after 20 Feb 2010; or if there is no OTP, the date of S&P falls on or after 20 Feb 2010.
• The date of purchase for the lower LTV is the date of OTP; while the date of purchase for the levying of the SSD is the exercise date of the OTP.
iv) BUDGET 2010: for property tax payable from Jan 11, the GST Rebate will be replaced by progressive property tax regime for owner-occupied residential property:
- 0% for the first $6000 of Annual Value (AV);
- 4% for the next $59,000 of AV;
- 6% for the balance of AV in excess of $65,000.
10% on non owner-occupied residential properties and other properties remain.
v) Changes to HDB Policies announced on 5 Mar 10
1) On subsidy for SC+PR family
- SC+PR buying resale flat
CPF grant will be reduced by 10k (i.e.20k for family grant, near parents 30k), the 10k will be restored if the PR or 1 child becomes SC (to apply within 6 months)
- SC+PR buying new flat
They must pay 10k premium on the purchase price, the 10k will be refunded if the PR or 1 child becomes SC (to apply within 6 months)
- No Change to the Amount under Additional CPF Grant for Low Income Family
2) On Ethnic Integration Policy (EIP)
- Originally 3 ethnic groups, Malays, Chinese, and Indians/Others.
- New group added, the Non-Malaysian PR Group
3) Minimum Occupation Period (MOP)
- Subsidised flat (Brand new or Resale with CPF Grant) = 5 years, no change
(Owners are not allowed to buy any property during the 5 year MOP)
- Resale HDB with HDB loan, MOP is now 3 years (2-1/2 years before 5 Mar 10)
- Resale HDB without HDB Loan, MOP is now 3 years (1 year before 5 Mar 10)
4) Non-Upgraders taking 2nd HDB Concessionary Interest Rate Loan
- Not allowed if they had or going to purchased a subsidised flat, before 5 Mar 10
- Now, they are allowed 2nd HDB loan but they have to fulfil the following,
- They are allowed to retain only 50% of cash proceeds or $25k, whichever is higher, from the sale of existing house
- The balance sale proceeds and all CPF in the ordinary account must be used to pay for the house before the loan is granted
**Apply to all buyers taking 2nd HDB concessionary interest rate loan.**
• Resale ECs and HUDCs are not subject to MOP, hence SSD will apply to them.
• All HDB flats are subject to MOP of at least 1 year, hence SSD will not apply.
• Date of purchase to compute holding period for SSD is the date of exercising OTP or signing S&P, whichever is earlier. The date of resale of the property is the date of exercising OTP or signing S&P by the subsequent buyer, whichever is earlier.
• SSD must be paid within 14 days from date of exercising OTP or signing S&P. If the Agreement is executed overseas, within 30 days from such dates.
• Objective of SSD is to discourage short-term speculative activity, not targeted at the purchase of properties for owner-occupation or longer term investment.
- Lowering of Loan-to-Value (LTV) limit to 80%, from 20 Feb 2010
• Applicable to housing loans granted by financial institutions for private residential properties, ECs, HUDCs, HDB flats and DBSS with bank loans.
• HDB flats and DBSS with HDB loans will still have 90% LTV as they are already subject to other criteria to prevent speculation and encourage financial prudence.
• The 80% LTV limit will apply to transactions where OTP was granted on or after 20 Feb 2010; or if there is no OTP, the date of S&P falls on or after 20 Feb 2010.
• The date of purchase for the lower LTV is the date of OTP; while the date of purchase for the levying of the SSD is the exercise date of the OTP.
iv) BUDGET 2010: for property tax payable from Jan 11, the GST Rebate will be replaced by progressive property tax regime for owner-occupied residential property:
- 0% for the first $6000 of Annual Value (AV);
- 4% for the next $59,000 of AV;
- 6% for the balance of AV in excess of $65,000.
10% on non owner-occupied residential properties and other properties remain.
v) Changes to HDB Policies announced on 5 Mar 10
1) On subsidy for SC+PR family
- SC+PR buying resale flat
CPF grant will be reduced by 10k (i.e.20k for family grant, near parents 30k), the 10k will be restored if the PR or 1 child becomes SC (to apply within 6 months)
- SC+PR buying new flat
They must pay 10k premium on the purchase price, the 10k will be refunded if the PR or 1 child becomes SC (to apply within 6 months)
- No Change to the Amount under Additional CPF Grant for Low Income Family
2) On Ethnic Integration Policy (EIP)
- Originally 3 ethnic groups, Malays, Chinese, and Indians/Others.
- New group added, the Non-Malaysian PR Group
3) Minimum Occupation Period (MOP)
- Subsidised flat (Brand new or Resale with CPF Grant) = 5 years, no change
(Owners are not allowed to buy any property during the 5 year MOP)
- Resale HDB with HDB loan, MOP is now 3 years (2-1/2 years before 5 Mar 10)
- Resale HDB without HDB Loan, MOP is now 3 years (1 year before 5 Mar 10)
4) Non-Upgraders taking 2nd HDB Concessionary Interest Rate Loan
- Not allowed if they had or going to purchased a subsidised flat, before 5 Mar 10
- Now, they are allowed 2nd HDB loan but they have to fulfil the following,
- They are allowed to retain only 50% of cash proceeds or $25k, whichever is higher, from the sale of existing house
- The balance sale proceeds and all CPF in the ordinary account must be used to pay for the house before the loan is granted
**Apply to all buyers taking 2nd HDB concessionary interest rate loan.**
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