Your search results

4 Key Factors to Consider When Purchasing a Private Property for the First Time

Posted by Jayson Ang on August 27, 2023

| 0

TLDR

When considering buying or selling property in Singapore, it’s crucial to understand factors like Additional Buyer’s Stamp Duty, Loan-To-Value rates, Total Debt Servicing Ratio, and Property Tax changes. Recent updates include new laws on living trusts and increased property tax rates. To navigate the market effectively, seek strategic real estate advice and connect with the right buyers. Stay informed about market trends through expert insights and data-driven approaches for a successful real estate journey.

If you’re planning to purchase your first private property or build a new home in a condominium with your partner, there are important factors to consider before entering Singapore’s private market.

As a professional advice, we recommend that you take some time to carefully evaluate these aspects before making any decisions.

1. Additional Buyer’s Stamp Duty

The ABSD rates have been a source of discontent for second-time home buyers, with the rates increasing to 17% after the 2021 property cooling measures.

However, if you are a first-time private homeowner, you will still have to pay ABSD temporarily. The good news is that you can get a refund once you sell your previous property within the 6-month window.

Effective May 9, 2022, new laws have been implemented with regard to residential properties that are transferred into a living trust.

A new ABSD rate of 35% will be applicable on any transfer of residential property into a living trust. This new rule applies even if there is no identifiable beneficial owner at the time of the transfer.

This change has been made to close a loophole, and the ABSD (Trust) will now be paid upfront during the transfer.

2. Loan-To-Value

The government’s property cooling measures have also affected the Loan-to-Value (LTV) rates. For first-time home buyers or those with fully paid existing home loans, the LTV rate has been lowered from 80% to 75%.

This means that borrowers now have less flexibility in obtaining financing from banks to purchase their homes.

Additionally, a decrease in the LTV rate translates to a higher down payment, which can be made through cash or CPF.

3. Total Debt Servicing Ratio

The purpose of TDSR is to safeguard home buyers from taking on a mortgage that they cannot afford. To ensure this, you can only dedicate up to 55% of your monthly income towards repaying your loan every month.

4. Property Tax

If you’re planning to buy a private home for your own use, you can find the property tax rate by using the IRAS e-Service.

The Singapore government recently announced that property tax rates for both owner-occupied and non-owner-occupied residential properties will increase in two phases from 2023 onwards.

For homes with an annual value exceeding $30,000, taxes will be increased from 5-23% in 2023 to 6-32% in 2024. Investment properties will also face higher taxes: from the current 10-20%, to 11-27% in 2023, and 12-36% in 2024.

Despite these measures, experts predict that there will still be strong demand for private property, as demonstrated by the popularity of last year’s launches like Affinity at Serangoon, which constituted a significant portion of private property sales in January 2019.

Should You Buy, Sell or Wait?

If you’re reading this, you must be trying to figure out the best course of action right now: is it the right time to buy or sell?

It’s difficult to give an exact answer since everyone’s situation is unique and what works for one person may not necessarily work for you.

I can bring you a wealth of on-the-ground experience and a data-driven approach to provide clarity and direction. From beginners to experienced investors, our top-down, objective approach will help you on your real estate journey.

I can help you by:

Offering Strategic Real Estate Advice – I can help create a comprehensive plan to guide you through your property journey.
Connecting Your Home with the Perfect Buyers – Through stunning visuals, an effective communication strategy, and an in-depth knowledge of the market, we’ll ensure your home is presented in the best possible way to fulfill your goals.

You May Also Like …

Mandarin Top 5

5 Factors : Why Singapore’s Property Market Is Still A Safe Haven For Investors

Jayson Ang – May 22, 2024 –

Real estate investment has always been a popular choice for investors looking to generate passive income and build long-term wealth....

All Buying Tips Opinion

Is Lentor Mansion: The 5th New Lentor Condo in 2 Years Still Worth Your Attention?

Jayson Ang – April 17, 2024 –

TLDR for "Exciting Updates from Lentor Mansion" Lentor Mansion, a new project in the vibrant Lentor region, is set to...

Mandarin Top 5

5 Resources That Can Help You Find Your Dream Home In Singapore

Jayson Ang – March 12, 2024 –

It's 五新房产, Finding your dream home can be a daunting task, but with the right resources, it can be a...

All Buying Tips

Lessons from the Rollercoaster Ride: Homebuyers Share Their Singapore Housing Market Experiences

Jayson Ang – April 11, 2024 –

TLDR The Singapore housing market is a rollercoaster of unpredictable changes. Three homebuyers share their experiences: Tristan waited too long...

All Blog Posts Buying Tips

5 Risks Upgraders Should Be Aware of To Avoid Financial Troubles When Progressing Their Property

Jayson Ang – July 3, 2023 –

TLDR The article delves into the intricacies of property asset progression in Singapore's real estate market. It highlights the risks...

All Blog Posts Buying Tips

Avoid These 6 Terrible Property “Tips” in Singapore

Jayson Ang – May 1, 2023 –

TLDR When it comes to property advice, it's crucial to be cautious of common misconceptions. For instance, schemes like the...

Mandarin Top 5

Top 5 Hawker Centres in Singapore for Local Food

Jayson Ang – February 24, 2024 –

Singapore, a melting pot of diverse cultures and rich culinary heritage, is home to some of the most delectable local...

All Buying Tips

Strategies for Overcoming ABSD and Acquiring Multiple Properties in 2023 (Revised)

Jayson Ang – August 15, 2023 –

TLDR When it comes to navigating the Additional Buyers Stamp Duty (ABSD) in Singapore, there are legal strategies available to...

All Blog Posts Buying Tips

When a Property Seller Pulls Out of the Deal : What Now?

Jayson Ang – April 2, 2023 –

TLDR When a property deal is not yet formalized, sellers can withdraw without consequences. However, once an Option to Purchase...

All Blog Posts Buying Tips

Explore the Benefits and Drawbacks of Holding an Open House!

Jayson Ang – June 3, 2023 –

TLDR An open house is a valuable opportunity for sellers to showcase their home to potential buyers without pressure. It...

Mandarin Top 5

5 Tips for Renting Property in Singapore

Jayson Ang – March 15, 2024 –

Renting property in Singapore can be a challenging task, especially for those who are new to the country. With Singapore's...

All Buying Tips Opinion

Buy a $1M Resale HDB or a $1M Resale Condo?

Jayson Ang – August 19, 2023 –

TLDR When comparing a million-dollar HDB flat to a private property of the same value, the HDB flat offers more...

All Blog Posts

3 Steps to Protect Yourself from Real Estate Scams in Singapore

Jayson Ang – December 17, 2022 –

Lately, there has been an increase in scams related to real estate. Scammers are pretending to be real estate agents...

All Buying Tips Opinion

The Impact of a Real Estate Agent on Your Property’s Selling Price

Jayson Ang – August 9, 2023 –

TLDR In the world of real estate, the value of property agents lies in their ability to create competition among...

All Buying Tips Opinion

4 Key Factors to Consider When Purchasing a Private Property for the First Time

Jayson Ang – August 27, 2023 –

TLDR When considering buying or selling property in Singapore, it's crucial to understand factors like Additional Buyer’s Stamp Duty, Loan-To-Value...