ST PHOTO: NG SOR LUAN
We don’t know if you’ve heard, but more than 7,000 people flocked to “condominium show-flats (…) on Thursday (July 5) night, with buyers hoping to secure units before the higher additional buyer’s stamp duty (ABSD) kicks in on Friday (July 6).
The Government announced that the ABSD will be raised by 5 percentage points for individuals.”
– The Straits Times (online) (1)
Here’s how it may impact you.
1) Loan-to-value (LTV) Changes:
“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.” – Ohmyhome (2)
– Impacts both First Time Buyers and Property Investors.
– Buy what you can afford.
2) Increase in ABSD (Additional Buyer’s Stamp Duty) Rates:
Taxes for Multiple Property Owners
– First Timers are not being taxed.
– This move is meant to filter out property investors, and not those who just want to stay in it.
3) Taxes for Entities Increased by 10% plus 5% non-remission-able tax
(Developers will risk paying 25% of Land Cost if they cannot sell the properties within 5-Years for Licensed Developers)
– This move is to dampen collective sales market on two fronts.
– Land Demand: This policy compels the developer to risk dishing out bigger taxes and therefore higher costs.
– Land Supply: The window of opportunity has decreased significantly for owners of potential en-bloc sites
What does this means for us, who have always yearned for an investment opportunity in properties?
1. Shift your mindset. Be teachable and learn the new rules.
2. Explore Other Investment Approaches. Investing into Properties may no longer yield us that chance to grow a significant income. Explore other avenues of building an alternate source of income
3. Model after success. There are robust investment opportunities such as dividend stocks and high yielding endowments that mirrors both appreciation and rental opportunities that properties provide.
Wanna find out more on how you future-proof your investments?
Join us at our upcoming session on how you can accelerate your CPF’s growth, instead of leaving it alone!
(1) Buyers flock to show-flats before new rules kick in, Straitstimes.com, July 2018
(2) ABSD and LTV Changes for Foreigners Buying Residential Property in Singapore, Ohmyhome.sg, July 2018