Regulatory Measures

Since 2009, the Goverment has introduced a series of additional regulatory measures in an effort to cool and ensure a stable sustainable property market. Below is a closer look at some of these measures and its applicability and impact to the Executive Condominium market.

(Important disclaimer: While every reasonable care has been taken to prepare the contents of this summary, the author cannot be held responsbile for any inaccuracy. Please check with the appropriate parties for the latest update or interpretation of the measures before booking and/or contract execution)

1. For Buyer:

a. Buyer's Stamp Duty

The buyer is responsible to pay the Buyer's Stamp Duty (BSD) to Inland Revenue Authority of Singapore within 2 weeks upon signing the Sales and Purchase Agreement.

The BSD is based on the Purchase Price or Market Value, whichever is higher

The simplified mathematical formula for residential property purchase is:

* BSD (up to 1 million) = 3% of purchase price/market value minus $5,400

** BSD (more than 1 million) = 4% of purchase price/market value minus $15,4000

 b. Additional Buyer's Stamp Duty

In addition to the buyer stamp duty, ABSD was first introduced on 8 December 2011 to curb foreigner and speculative demand for residential property. The latest ABSD rate is as follows:

For Executive Condomimium and new HDB flat which are subjected to HDB Regulations on Ownership, there is a special concession and rate. Reference  IRAS e-Tax guide Stamp Duty; ABSD Revised Edition (published 11 Jan 2013), para 10.1 & 10.2

* ABSD will be remitted for purchase of HDB flat or new EC by a SC household only (one where there is at least one Singaporean owner).
* Purchase of second residential property by a SC household may qualify for ABSD refund subject to ABSD being paid on the second residential property and the first property being sold within 6 months from date of TOP (for BUC project).

To put it simply, for the purchase of a new EC unit, SC/SC household do not need to pay ABSD. Similarly, a SC/SPR married couple also do not need to pay ABSD if they purchase an EC.

More details on ABSD and its FAQs can be found in IRAS's e-Tax guide on ABSD

c. Resale Levy

There is no resale levy for 2nd timer applicants who applied for new EC from developer where the land was sold before 9 Dec 2013 or a HDB resale flat or private property.

The resale levy will be applicable for 2nd timer applicants who applied for new EC unit on EC land sales after 9 Dec 2013 (i.e from Westwood Residences project).

The exact resale levy amount to be paid will be determined by HDB. It applies regardless of ownership type (joint-tenancy or tenancy-in-common) or shared interest in the flat.    The levy amount payable depends on when the resale application for the 1st subsidised flat was submitted. 

When and how the resale levy payment is made

2. For Buyer and Financial Institution/Bank:

Below are some key regulatory measures to loan financing.

a) Loan Tenure or Repayment Period

From 28 August 2013, the loan tenure for HDB unit has been shortened,

• From 30 years to 25 years for new housing loan from HDB. (Not applicable for EC) 
• From 35 years to 30 years for new housing loan and re-financing facilities from bank . 

As EC follows the private residential category for housing loan, the maximum repayment period from bank remains at 30 years and 35 years (for extended loan tenure; cap at additional 10 years or 75 years of age, whichever is lower)

So for a home owner buyer who has an existing housing loan seeking to buy another property, bank loan will be capped at 45% value and at least 25% of the down/upfront payment has to be in cash (even if buyer have more than 25% in CPF fund). 

However for the purchase of new EC, because existing HDB flat owners have to sell their current flat within 6 months from TOP, the loan for EC purchase is still considered as the 1st loan.  Hence, for a HDB upgrader with an existing housing loan, the bank can still loan up to 75% of purchase price.   This is also another reason why purchasing an EC is a more attractive route to private property ownershipfor HDB upgraders.

c.  Total Debt Servicing Ratio (TDSR)

Effective from 16 December 2021, any loan extended should not exceed the a TDSR threshold of 55%. It means that the total debt of borrowers cannot be more than 55% of their household income. The key parameters used to compute the TDSR are:

• Variable income such as commission and bonuses will be discounted by 30%. 
• Besides mortgage repayments, car loans, credit card debts and personal loans are to be included as total debt.    
• Applying a medium term interest rate of 4.0% (w.e.f 30 September 2022) 

Under the TDSR framework,  for the purchase of new EC, existing mortgage repayment (if any) can be excluded from total debt.    It means that HDB upgraders with an existing housing loan will be given a higher loan limit for the purchase of EC versus private property.

d. Mortgage Servicing Ratio (MSR)

To curb 'flipping or sub-sale' activities, the Seller Stamp Duty (SSD) was imposed onto sellers who bought and sold the property within a short holding period.    The current rates for residential property are as follows:

As there is a 5 years Minimum Occupation Period for EC, no SSD is payable for a resale unit whose MOP had been met

4. Finally, for the EC Developer as well 

From 12 January 2013,

·        The maximum strata title floor area of new EC will be limited to 160 square meters. 

·       Sales of new dual key EC units will be limited to multi-generational families only 

·       Developer of future EC sites will only be allowed to launch the EC units for sale 15 months from the date of award of the sites or after the completion of foundation works, whichever is earlier. 

·       Private enclosed space (PES) and private roof terraces will be treated as gross floor area (GFA) approved or allowed for the site. Such spaces will be counted as part of the “10% bonus” GFA allowed and subject to payment of development charges.

Related Articles

1. MAS's press release on 5 Oct 2012

2. Additional Measures to Ensure a Stable and Sustainable Property Market

3. MAS Introduces Debt Servicing Framework for Property Loans 

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