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 Laser Tag Arenas in Singapore

Jayson Ang – January 12, 2025 –

Laser tag has become an increasingly popular activity in Singapore, offering adrenaline-pumping experiences for people of all ages. This exciting...

Mandarin Top 5

5 Reasons : The Benefits Of Investing In A Property With Good Access To Healthcare Facilities In Singapore

Jayson Ang – June 28, 2024 –

Investing in a property with good access to healthcare facilities in Singapore offers numerous benefits for both homeowners and investors....

Mandarin Top 5

Top 5 : Best Quirky Museums in Singapore

Jayson Ang – November 21, 2024 –

Singapore, a vibrant and diverse city-state, is known for its rich history, cultural heritage, and modern attractions. While the city...

Mandarin Top 5

Top 5 Thai Restaurants in Singapore

Jayson Ang – June 24, 2024 –

Singapore, a melting pot of cultures and cuisines, is a food lover's paradise. Among the myriad of dining options available,...

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...

All Blog Posts Buying Tips

Planning for Retirement: Considerations for Downsizing Your Property

Jayson Ang – February 19, 2023 –

TLDR Downsizing your home for retirement can bring financial security, closer family ties, and new adventures. Consider the benefits of...

All Buying Tips

Crucial Facts : All First Time Buyers Need to Know

Jayson Ang – December 7, 2022 –

TLDR When it comes to property investment for first-time buyers in Singapore, careful planning and early action are key. Consider...

Mandarin Top 5

5 Homeowners Share Their Biggest Regrets Delaying Their Property Purchase in Singapore

Jayson Ang – September 12, 2024 –

In the fast-paced and ever-evolving property market of Singapore, making a timely decision to purchase a property can make all...

All Blog Posts Opinion

Invest During the Bearish & Exit During the Bullish

Jayson Ang – December 27, 2022 –

TLDR A comprehensive overview of the real estate market trends, emphasizing the importance of strategic property analysis and investment decisions....

All Blog Posts Opinion Selling Tips

Unveiling 4 Scenarios of CPF Accrued Interest Impact on Property Owners

Jayson Ang – December 11, 2024 –

TLDR When selling your first home, be aware of CPF accrued interest, which is the interest that would have accumulated...

All Buying Tips Opinion

Dual-Key Condo: Analysing The Pros And Cons

Jayson Ang – November 16, 2023 –

TLDR for "Dual-Key Condo: Analysing The Pros And Cons" When considering dual-key condo units, it's important to weigh the advantages...

Mandarin Top 5

Top 5 : Places to See Singapore’s Skyline at Night

Jayson Ang – February 5, 2025 –

Singapore, a bustling metropolis known for its stunning skyline, offers an array of vantage points to witness the city's architectural...

All Buying Tips Opinion

The Significance of Choosing the Right Condo: A Real-Life Tale of Two $1.8 Million Investments with Significantly Different Results.

Jayson Ang – August 13, 2024 –

TLDR When contemplating property investments in Singapore, consider various factors like rental performance, unit count, access to train lines, and...