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

Top 5 Best Alternative Music Venues in Singapore

Jayson Ang – September 20, 2024 –

Singapore, a vibrant and bustling city-state, is known for its diverse culture and thriving arts scene. The city's love for...

All Opinion Selling Tips

Why Selling Your Own HDB Flat May Be More Challenging Than You Anticipate: 7 Hidden Challenges to Prepare For

Jayson Ang – January 29, 2025 –

TLDR Selling your flat can be a daunting task, not because of the paperwork but due to challenges in marketing...

All Buying Tips Opinion

HDB Owners Missing Out on the “Ultimate Upgrade” to Landed Living

Jayson Ang – October 3, 2024 –

TLDR Over the past two decades in Singapore, the trend of HDB residents upgrading to landed properties has fluctuated. While...

All Buying Tips

Rising Interest Rates : A Cause for Concern?

Jayson Ang – December 7, 2022 –

TLDR In 2021, the real estate market saw a surge in demand due to low interest rates and supply chain...

Mandarin Top 5

Retiring in Singapore? Here’s Where to Find the 5 Best Property Investments for Comfort and Security!

Jayson Ang – March 22, 2024 –

Retirees have unique needs when it comes to property investments. They require properties that offer comfort, security, and easy access...

Mandarin Top 5

Top 5 : Questions Should Investors Be Asking Before Investing In Singapore’s High-End Rental Market

Jayson Ang – February 1, 2025 –

Singapore's high-end rental market has been a hot topic of discussion among investors worldwide. With the city-state's robust economy, excellent...

All Buying Tips

Superstitions in the Real Estate Market : How Does it Impact Resale Value?

Jayson Ang – June 20, 2023 –

TLDR When navigating the Singapore property market, it's crucial to consider various superstitious beliefs that can impact your decisions. From...

All Buying Tips

Integrated Developments: Do They Live Up to the Hype? Check Out These Five Factors

Jayson Ang – March 3, 2024 –

TLDR Integrated developments in Singapore offer a one-stop solution for residents by combining residential, commercial, and transport elements in one...

All Buying Tips Opinion

Ouch! Our $1.8 Million Condo Investment Blunder: Unpacking 5 Crucial Takeaways from Our Bad Experience

Jayson Ang – December 14, 2023 –

TLDR The blog post delves into the complexities of real estate investments using Bob's experiences as examples. It highlights the...

All Buying Tips

Downpayment For Condo: How Much Do First-Timers Need In Singapore?

Jayson Ang – March 12, 2024 –

TLDR The blog post delves into the complexities of condo downpayments in Singapore in light of the impact of Covid-19...

All Blog Posts Buying Tips

Get Into Core Central Region Before Big Price Adjustments

Jayson Ang – February 13, 2023 –

TLDR Jayson Ang discusses the essential factors to consider when seeking a property for investment. By analyzing the safe entry...

All Blog Posts Opinion

Revival of Singapore Luxury Housing Market in 2023

Jayson Ang – January 21, 2023 –

TLDR The property market in Singapore has witnessed significant shifts in the past two years, with a surge in prices...

All Opinion

“I Kept My Condo Empty for 7 Years” – Here’s What Singaporeans Living Overseas Do With Their Properties Back Home

Jayson Ang – February 14, 2025 –

TLDR In today's global workforce, many Singaporeans find themselves working abroad, raising questions about the management of their local properties....

All Blog Posts Buying Tips

6 Myths About Using Your CPF For Housing

Jayson Ang – February 2, 2023 –

TLDR When it comes to purchasing a house in Singapore using CPF funds, there are several myths that need to...

All Blog Posts Buying Tips

A Step-by-Step Guide To Upgrading From an HDB Flat To Your a Private Property

Jayson Ang – January 3, 2023 –

TLDR Understanding the complexities of upgrading from an HDB flat to a private property in Singapore involves selling your HDB...

All Buying Tips

What’s Next for HDB Owners?

Jayson Ang – December 7, 2022 –

Buying a home always seems daunting especially such it is a big-ticket item and the prices for private homes can easily...

Mandarin Top 5

5 Most Iconic Landmarks In Singapore’s Landscape

Jayson Ang – June 14, 2024 –

Singapore's landscapes is renowned for its innovative and dynamic approach to urban development, boasting some of the most iconic landmarks...

Mandarin Top 5

Top 5 Factors : Why Not All Properties Appreciate Steadily

Jayson Ang – January 20, 2025 –

Real estate has long been considered a lucrative investment option, with the potential for significant returns. However, not all properties...

All Buying Tips

A Guide to Purchasing a New Launch Condo in Singapore in 2023

Jayson Ang – October 26, 2023 –

TLDR When buying a new launch condo in Singapore, start by planning your finances to determine loan and property limits....

All Blog Posts Buying Tips Top List

Expert Tips : Top Property Investment Strategies in Singapore

Jayson Ang – December 25, 2022 –

TLDR Singapore offers lucrative property investment opportunities with its stable economy and political climate. To succeed, investors should conduct thorough...