The third round of cooling measures since December 2021 aims to moderate demand and ensure sustainable property market growth.
SINGAPORE: Starting Thursday (Apr 27), foreigners purchasing residential property in Singapore will face a significant increase in the additional buyer’s stamp duty (ABSD) rate, which has been doubled to 60%. This change is the most substantial among the new cooling measures announced late Wednesday evening.
For Singaporeans, the ABSD on the second residential property rises to 20%, up from 17%, while those buying their third and subsequent properties will now pay 30%, up from 25%. Permanent residents (PRs) will see similar hikes: the ABSD for their second property will rise to 30%, and for their third and subsequent properties, it will increase to 35%.
These new measures, which mark the third round of cooling steps since December 2021, aim to promote a sustainable property market and prioritize housing for owner-occupation. The Ministry of Finance (MOF), Ministry of National Development (MND), and the Monetary Authority of Singapore (MAS) stated that while previous measures have moderated the market, the first quarter of 2023 saw renewed signs of price acceleration due to resilient demand, especially from local buyers and foreign investors.
“Demand from locals purchasing homes for owner-occupation has been especially strong, and there has also been renewed interest from local and foreign investors in our residential property market,” the authorities said. “If left unchecked, prices could run ahead of economic fundamentals, with the risk of a sustained increase in prices relative to incomes.”
Despite these increases, the ABSD rates for Singapore citizens and PRs purchasing their first residential property remain unchanged at 0% and 5%, respectively. The new rates are expected to impact about 10% of residential property transactions, based on 2022 data.
The government has also made efforts to increase housing supply, with a focus on both private and public housing. In the first half of 2023, the government raised the number of private housing units on the Confirmed List to 4,100, up from 3,500 in the second half of 2022. Additionally, more than 23,000 public flats will be launched in 2023, continuing the government’s push to meet housing demand.
This latest round of cooling measures follows stricter borrowing criteria and limits introduced in September 2022 to ensure responsible borrowing amidst rising interest rates. The government will continue to review and adjust its policies to maintain a stable and sustainable property market.
