1. Increase the holding period for Sellers Stamp Duty (SSD) from the current 3 years to 4 years.
- From 20 Feb 2010, SSD for residential properties sold within 1 year of purchase.
- From 30 Aug 2010, SSD for residential properties sold within 3 years of purchase.
- From 14 Jan 2011, the residential properties holding period for SSD will be extended to 4 years. period for SSD will be extended to 4 years.
- Based on date when a buyer (ie. Buyer A) exercises the option to purchase the property to the date when the subsequent buyer (ie. Buyer B) exercises the option to purchase the property from Buyer A.
- The extended SSD will not affect HDB as the Minimum Occupation Period is 5 years.
2. Raise the SSD rates to 16%, 12%, 8% and 4% of sale price for residential properties which are bought on or after 14 Jan2011, and sold in the 1st, 2nd, 3rd and 4th year of purchase respectively.
For residential properties bought on or after 14 Jan 2011, the SSD rates will be as follows:
a) 16% of sale price if the property is sold in the 1st year of purchase.
b) 12% of sale price if the property is sold in the 2nd year of purchase.
c) 8% of sale price if the property is sold in the 3rd year of purchase.
d) 4% of sale price if the property is sold in the 4th year of purchase.
Mr Lee purchased his residential property on 14 Jan 2011 and sold it on 13 Jan 2012 for $1,000,000 (ie. Holding period is 1 year).
SSD payable = 16% of $1,000,000 = $160,000
Mr Tan purchased his residential property on 14 Jan 2011 and sold it on 13 Jan 2013 for $1,000,000 (ie. Holding period is 2 years).
SSD payable = 12% of $1,000,000 = $120,000
Mr Tan purchased his residential property on 14 Jan 2011 and sold it on 13 Jan 2014 for $1,000,000 (ie. Holding period is 3 years).
SSD payable = 8% of $1,000,000 = $80,000
Mr Tan purchased his residential property on 14 Jan 2011 and sold it on 13 Jan 2015 for $1,000,000 (ie. Holding period is 4 years).
SSD payable = 4% of $1,000,000 = $40,000
Mr Tan purchased his residential property on 14 Jan 2011 and sold it on 14 Jan 2015 for $1,000,000 (ie. Holding period is more than 4 years).
SSD payable = $0
3. Lower the Loan-To-Value (LTV) limit to 50% on housing loans granted by banks for property purchasers who are not individuals.
- From 14 Jan 2011, an LTV limit of 50% will apply to all residential property purchasers who are not individuals. This includes corporations, trusts and collective investment schemes, among others. investment schemes, among others.
- The 50% LTV limit for housing loans will also apply to joint property purchases by an individual and a purchaser who is not an individual.
4. Lower the LTV limit on housing loans granted by banks from 70% to 60%for property purchasers who are individuals with one or more outstanding housing loans.
- From 14 Jan 2011, the LTV limit is lowered from 70% to 60% for borrowers who are individuals and have one or more outstanding housing loans (whether from HDB or a bank) at the time of applying for a housing loan for the new property purchase.
- Borrowers who can show evidence that they have sold their existing properties will still be able to borrow at an 80% LTV.
- Where the existing property is a private property, he can show an exercised option to purchase or a signed sale & purchase agreement, with the IRAS certificate showing that stamp duty has been paid by the buyer.
- Where the existing property is a HDB flat, he can show HDB approval letter to sell the flat, that HDB will issue within 2 weeks of the First Appointment.
- Borrowers without any outstanding housing loans continue to have a LTV cap of 80%.
- Apply to housing loans granted by banks for private residential properties, Executive Condominiums, HUDC flats and HDB flats (including DBSS flats).
- Loans granted by HDB for HDB flats (including DBSS flats) will still have a LTV cap of 90%.
- HDB loan applicants are required to utilise all the balance in their CPF Ordinary Account before HDB loans will be granted. Those taking a 2nd HDB loan must use the CPF refund and 50% of the cash proceeds from the sale of their previous flat before they are granted an HDB loan.
Q1. Which is the material date of acquisition/disposal to be considered for the purpose of determining SSD?
A1. The material date of acquisition or disposal is the date on which the contract is made. Where there is an Option to Purchase, the material date shall be the date when the Option is exercised. In the case of a direct sale by the developer, the date of acquisition shall be the date of the Sale & Purchase Agreement between the developer and the Original Purchaser. Should the Original Purchaser subsequently sell the property to the Sub-Purchaser, the
subsequent date of acquisition or disposal shall be the date when the Option to Purchase is exercised by the Sub- Purchaser.
Q2. When must SSD be paid?
A2. SSD must be paid within 14 days of execution of the Agreement (that is, the date the Option to Purchase is exercised, or date of signing the Sale and Purchase Agreement if the date of exercise of Option is not available). Where the Agreement is executed overseas, SSD must be paid within 30 days from the date of receipt of the Agreement in Singapore.
Q3. Can SSD be deferred or paid by instalments?
A3. No, stamp duty must be paid in full for the Agreement to be stamped.
Q4. As a buyer of a residential property, do I have to ensure that the seller pays the SSD if he is liable?
A4. If the seller is liable but fails to pay SSD, the Agreement between you and the seller is considered as not duly stamped even though you have paid the buyer's stamp duty. Hence it is in your interest to ensure that the seller pays the SSD.
Q5. How do I know if the seller is liable to pay SSD?
A5. In the process of conveyancing, your lawyer may check with the seller's lawyer or make a search on the property to ascertain the date of purchase by the seller. Whether the seller is liable for SSD and the amount of SSD payable would depend on the date of purchase and the date of sale.
Q6. As a buyer, how do I ensure that the SSD is duly paid?
A6. You may ask for a copy of the stamp certificate from the seller's lawyer as proof that SSD has been paid. If the seller seller's lawyer as proof that SSD has been paid. If the seller has not paid the SSD by the sale completion date, it may be in your interest to ask your lawyer to withhold the stamp duty amount payable by the seller plus any penalty chargeable.
Q7. Does SSD apply if an apartment was given to me (i.e. transferred by way of a gift) after 14 Jan 2011 and I dispose of the apartment within a year?
A7. Yes, since the apartment was transferred to you by way of gift after 14 Jan 2011. The date for calculation will be based on the date of transfer.
Mr A transfers his property to his son, Mr B, by way of gift on 1 Apr 2011. Mr B subsequently sells it for $1.5 million on 9 Aug 2013.
As Mr B acquired the property after 14 Jan 2011 and sold it within 3 years, he is liable for SSD based on $1.5M payable within 14 days from 9 Aug 2013.
The SSD is 8% of $1.5M = $120,000.
Q8. I have inherited a house from a deceased relative who bought the house after 14 Jan 2011. Does SSD apply to me if I dispose of it within a year?
A8. Yes, you would have to pay SSD when you dispose of the house within a year as the deceased bought the property after 14 Jan 2011. The date for calculation will be based on the date the deceased bought the property since it is an inheritance.
Mr C inherited a property from a deceased relative on 1 Apr 2011. The relative had purchased the property on 1 Feb 2011. Mr C subsequently sells it for $1.5M on 9 Aug 2013.
As the deceased relative had acquired the property after 14 Jan 2011 and Mr C sells it within 3 years from 1 Feb 2011, he is liable for SSD based on $1.5M payable within 14 days from 9 Aug 2013. The SSD is 8% of $1.5M = $120,000
Q9. What if there is a deficient in the SSD?
A9. If IRAS discovers the deficient duty, IRAS will impose a penalty of up to 4 times the amount of deficit duty.
Q10. Is SSD also applicable for collective sale and mortgagee sale?
A10. Yes, SSD is applicable for direct sale, resale, collective sale, mortgagee sale, gift transfer and voluntary winding up of a company.
Q11. What if the property is a mixed development?
A11. Only the part relating to residential use is subject to SSD.
Q12. What if I have only part interest in the residential property?
A12. SSD will be payable on the sale price or market value of the partial interest. Joint tenants are deemed to have equal interest.
Q13. What if the sale price is below the market value?
A13. SSD will be calculated based on whichever is the higher.
Q14. Who is exempted from SSD?
A14. The following are exempted from SSD:
a) Housing developers;
b) Public authorities eg. HDB and JTC;
c) The estate of the deceased when the property is passed to the beneficiary by Will or by law;
d) When the residential property is acquired under the Land Acquisitions Act;
e) When selling the residential property due to bankruptcy or involuntary winding up;
f) Foreigners who have to sell their residential properties as required under the Residential Properties Act;
g) HDB flat owners who return their flats to HDB as a result of re-possession by HDB or under SERS;
h) HDB flat owners whose flats have been identified for SERS but sell their flats in the open market;
i) HDB flat owners who surrender their flats to HDB due to separation/ divorce within the holding period;
j) HDB flat owners who surrender their Lease Buyback Scheme flats or studio apartments to HDB.