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ABSD and LTV Changes for Foreigners Buying Residential Property in Singapore

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Written by: Benjienen Toledo

On 5 July, the Government announced that it is raising Additional Buyer Stamp Duty (ABSD) rates and tightening loan-to-value (LTV) limits on residential property purchases, in an effort to cool the property market and keep price increases in line with economic fundamentals.

What does this mean if you are a foreigner planning to buy a new launch property in Singapore?

Changes in Additional Buyer’s Stamp Duty Rates

The ABSD will be raised by 5% for foreigners buying any residential property in Singapore and by 10% points for entities, said the finance and national development ministries, as well as the Monetary Authority of Singapore (MAS) in a joint release (Channel News Asia).

The ABSD was last revised in 2013 to further slowdown the growth of the property market:

Citizen Buying 1st Residential Property Buying 2nd Residential Property Buying 3rd and Subsequent Residential Property
Foreigners and Non-Individuals 15% 15% 15%

For example, if you are a foreigner or an entity buying a property at S$1 million, you will have to pay S$150,000 in ABSD.

On or after 6 July, the ABSD rates are as follows:

Citizen Buying 1st Residential Property Buying 2nd Residential Property Buying 3rd and Subsequent Residential Property
Foreigners buying any residential property 20% (revised) 20% (revised) 20% (revised)
Entities buying any residential property 25% (revised) 25% (revised) 25% (revised)

With these changes, if you are a foreigner buying a property at S$1 million, you will have to pay S$200,000 in ABSD. On the other hand, non-individuals will have to pay $250,000 in ABSD.

Meanwhile, LTV limits will be tightened by 5% for all housing loans granted by financial institutions, the release stated.

What Is Loan to Value (LTV) Limits?

LTV is the housing loan quantum a bank or financial institution is willing to offer as a percentage of the property’s valuation. LTV depends on whether this is your first, second or subsequent mortgage and your loan tenure.

Below is the LTV Limits Summary before 6 July:

Particular LTV Limits
No Outstanding Residential Property Loan 60% (an absolute limit of 35 years on the tenure of all loans for residential property. This will apply to loans to both individual and non-individual borrowers)
Individuals Obtaining a 2nd Housing Loan 50% or 30% (if the tenure exceeds 30 years or the loan period extends beyond the borrower’s retirement age of 65)
Individuals obtaining 3rd or subsequent housing loans 40% or 20% if the loan tenure exceeds 30 years or the loan period extends beyond the borrower’s retirement age of 65
Non-individual borrowers 20%

This means that a buyer looking for a second housing loan, and one that extends beyond 30 years or his retirement age (set at 65), can only borrow up to 30% of the value of the property, subject to TDSR.

With the adjustment, borrowers will now only be able to borrow up to 55% if the loan tenure is more than 30 years or extends past age 65.

Particular LTV Limits
No Outstanding Residential Property Loan 55% (an absolute limit of 35 years on the tenure of all loans for residential property. This will apply to loans to both individual and non-individual borrowers)
Individuals Obtaining a 2nd Housing Loan 45% or 25% (if the tenure exceeds 30 years or the loan period extends beyond the borrower’s retirement age of 65)
Individuals obtaining 3rd or subsequent housing loans 35% or 15% if the loan tenure exceeds 30 years or the loan period extends beyond the borrower’s retirement age of 65
Non-individual borrowers 15%

The new limits will apply to loans for properties where the Option to Purchase is granted on or after Jul 6.

These new cooling measures mean that if you are a foreigner planning to buy a property in Singapore, you would have to pay 5% more in stamp duties and take 5% less the housing loan amount granted by financial institutions.

Interested with new launch condos?

You may view show suites or discuss with Ohmyhome Real Estate Consultants about the following new launches:

Call us now at 6886 9009 to avail of exclusive discounts.

Source: Channel News Asia


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While the Information is considered to be true and correct at the date of publication, changes in circumstances after the time of publication may impact on the accuracy of the Information. The Information may change without notice and Ohmyhome is not in any way liable for the accuracy of any information printed and stored or in any way interpreted and used by a user.

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