Property cooling measures: Additional Buyer’s Stamp Duty for foreigners doubled to 60%, smaller increases for S'poreans and PRs

SINGAPORE — Foreigners who buy any residential property in Singapore from Thursday (April 27) onwards will have to pay double the prevailing Additional Buyer’s Stamp Duty (ABSD) rates after it was raised from 30 per cent to 60 per cent of the purchase price.

This is the highest among all the ABSD rate increases that were announced by the Government late on Wednesday night.

In a joint press statement, the Ministry of National Development, Ministry of Finance and Monetary Authority of Singapore said that Singaporeans buying their second residential property will now have to pay a 20 per cent ABSD, up from 17 per cent.

As for those buying their third and subsequent property, as well as permanent residents getting their second home, the ABSD rate was raised from 25 per cent to 30 per cent.

The ABSD rates for buyers getting their first residential property will remain at 0 per cent for Singaporeans and 5 per cent for permanent residents. This group of first-time buyers made up about 90 per cent of residential property transactions, based on 2022 data.

There is also no change in policy regarding the ABSD for those buying a Housing and Development Board (HDB) flat or executive condominium unit from property developers with an upfront remission, if any of the joint buyers is a Singaporean. 

Developers get a remission of the ABSD they pay on the land purchase price when certain conditions are fulfilled. Executive condos are public-private housing built and sold by private developers but are subsidised by the Government.

For property bought on or before April 26 this year, the Government said that there will be a transitional provision if all of the following conditions are met:

• The option to purchase agreement was granted by sellers to potential buyers on or before April 26, 2023

• This agreement is exercised on or before May 17, 2023, or within the document's validity period, whichever is earlier

• This agreement has not been changed on or after April 27, 2023

The Government said that increasing the ABSD rates — the third cooling measure since December 2021 — was to "promote a sustainable property market". 

In 2021, the ABSD for Singaporeans buying their second residential property was raised from 12 per cent to 17 per cent of the property price.

In September last year, the Government introduced stricter borrowing criteria and tighter limits for HDB home loans.

Although property market measures were put in place during these two periods in 2021 and 2022, which had a moderating effect, property prices in the first quarter of this year showed "renewed signs of acceleration amid resilient demand", it added.

Based on official flash estimates released by the Urban Redevelopment Authority on April 3, private home prices increased by 3.2 per cent in the first quarter of the year, compared to the 0.4 per cent increase in the previous quarter.

Demand from residents buying homes for owner-occupation has been especially strong, and there has also been renewed interest from domestic and foreign investors in the residential property market here.

"If left unchecked, prices could run ahead of economic fundamentals, with the risk of a sustained increase in prices relative to incomes," it said.

The Government added that moderating investment demand in property will complement its efforts to ramp up supply to alleviate the tight housing market for both home-ownership and rental.