Cooling Measures and Policies

Brief summary of the cooling measures and government policies being implemented and still in place

New Additional Buyer's Stamp Duty New LTV Ratio


Residential Purchase

Additional Buyer's Stamp Duty (ABSD)

Affected 1st Purchase 2nd Purchase 3rd Purchase onwards
Singapore Citizens Nil 7% 10%
Permanent Residents 5% 10% 10%
Foreigners and Corporate Entities 15% 15% 15%


  • Depending on their plans, PRs may choose to rent a home instead. For PRs with a longer time horizon, it may still make economic sense to pay the ABSD than to rent.
  • From 2nd residential property onwards, Investors will look elsewhere (Overseas, Industrial, Commercial) for better ROI. That being said, there are still investors getting more residential properties due to the economic and political stability of Singapore.
  • Foreigners are definitely staying away from the traditionally favorites like district 9 and 10. Looking at the price quantum, some are moving into the suburban areas.
  • Investors are no longer setting up companies to maneuver around income taxes.
  • No impact on Singaporeans looking to purchase their first home

Seller Stamp Duty (SSD)

For residential properties bought on or after 14th Jan 2011, sellers will be subjected to following stamp duty depending on the holding period.

Year 1 Year  2 Year 3 Year 4
16% 12% 8% 4%


  • An effective way to prevent the prices of properties (especially new launches) from escalating too fast

New Loan To Value Ratio

New Loan to Value Ratio 2013

New LTV Ratio and Cash Downpayment 2013, source by OCBC.



  • Not targeted at people getting their first property loan. This Loan to Value ratio is to curb investors and people still servicing their loan past 65 years of age (retirement age). This is to prevent people from stretching themselves too thin when servicing a loan

Buying HDB

1) In order for PRs to buy a resale HDB flat, 3 years must lapsed since their PR status.


  • Another step by the government to further distinguish the difference of a Singaporean and a PR. This will lower the demand of HDB resale, hence damping the price. PRs will then go for rental or purchasing a private property


2) Maximum loan tenure to be reduced to 25 years for HDB loans. Mortgage Servicing Ratio is now reduced from 35% to 30% of the borrowers' monthly income. For bank loans, maximum loan tenure is 30 years.


  • With the purchase prices escalating and the looming interest rate hike in the near future, the government is taking a proactive step to ensure people are still able to pay off the housing loans in bad times. This will move buyers towards cheaper purchase in terms of size (smaller unit) and location (further away from city) hence making the quantum smaller. Bigger units will face a drop in demand.


3) Implementation of Total Debt Servicing Ratio (TDSR) framework whereby the total loan of a borrower should not exceed 60% of his income.  In addition, borrowers have to be owners too.


  • The final nail into the coffin, as some people said. No more 'using' children's, relatives' , friends' name to purchase a property to avoid paying ABSD. This also prevent cash rich parents from supporting their children in getting large and expensive units in ECs (on top of getting government subsidies of up to $30K)

Buying ECs

For EC lands sale after 9th December 2013, Resale Levy is now applicable for the HDB upgraders who buy a EC unit from affected site. Mortgage Servicing Ratio is now reduced from 60% to 30% of the borrowers' monthly income.


  • Another step by the government to reduce the 'advantages' enjoyed by HDB upgraders who had seen their HDB flats appreciate by almost 100% in general.

Residential Rental

1) PRs are not allowed to lease out entire HDB flat.


    • Another step by the government to further distinguish the difference of a Singaporean and a PR. For more well heeled PRs, this is to prevent them from holding on to a HDB flat and lease it out while they lived in private properties.

2) There is a non citizen quota on leasing out the entire HDB flat and the maximum lease granted to non-citizens (except Malaysians) is capped at 18 months.


  • Certain areas in Singapore have a much higher proportion of non citizens renting the HDB units. For Singaporeans/PRs who have to adhere to the racial quota for purchasing a unit, non citizens tenants will be facing a similar quota too. All in the name of racial harmony and social integration.

Industrial Purchase

For industrial properties bought on or after 12th Jan 2013, sellers will be subjected to following stamp duty depending on the holding period.

Year 1 Year  2 Year 3
15% 10% 5%


    • An effective way to prevent the business cost (for tenants) from escalating too fast

Commercial Sector

Nothing specifically targeted at the commercial properties! However the TDSR framework does dampen the investors' demands and hence slows down the appreciation of  offices, shophouses and retail units which is good news for SMEs who are renting units. With challenges like labor shortage and costs of materials escalating, rental is another issue for the SMEs.