Govt adjusts cooling measures SSD and TDSR

The government has cut the holding period for imposition of Seller’s Stamp Duty (SSD) while the Total Debt Servicing Ratio (TDSR) rules have been adjusted.


Cooling measures SSD and TDSR adjusted

The changes take effect from the 11th of March 2017. However, according to a joint statement from the Ministry of Finance and Ministry of Nation Development, there will be no change to the Additional Buyer’s Stamp Duty (ABSD) rates and Loan-to-Value (LTV) limits.

Presently, the SSD affects homeowners who sell their residential property within a four year period after purchase. They have to pay between a rate of 16% (sell within 1 year of purchase) to 4% (sell on 4th year after purchase) of the property’s value. The introduction of SSD in January 2011 significantly affected the number of property sales within the four-year window.

So what are the changes?

The government will now reduce the imposing period of SSD from the current four years to just three years. The SSD rate to pay will also be reduced 4% for each tier. This means property sold within the 1st year after purchase will now be imposed a SSD of 12% instead of the previous 16%. On the 4th year after purchase, there will no longer be any SSD imposed. The changes applies only to residential properties purchased on or after the 11th of March 2017.

As for the TDSR framework, it no longer applies to mortgage equity withdrawal loans with LTV ratios of 50% and below. This allows flexibility to many who wish to monetise their properties during their retirement years.

At the same time, property holding companies who undergo transfers of equity interests in entities holding residential properties will now also be affected by the same stamp duties if they were to buy or sell such properties directly. This legislative changes in Parliament on stamp duties have been introduced by National Development Minister and Second Minister for Finance, Lawrence Wong.

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