Companies whacked with a 50 % Loan-To-Value limit on Singapore property purchases in desperate bid to halt property inflation

The Government released measures to ensure a stable and sustainable property market where prices move in line with economic fundamentals.

According to the Ministry of Finance, the first measure is to increase the holding period of imposition of Seller's Stamp Duty from the current three years to four years.

Second is to raise the SSD rates to 16%, 12%, 8% and 4% of consideration for residential properties which are bought on or after 14 January 11, and are sold on the first, second, third and fourth year of purchase respectively.

Third is to lower the LTV limit to 50% on housing loans granted by financial institutions regulated by MAS for property purchases who are not individuals.

The last measure is to lower the LTV limit on housing loans granted by financial institutions regulated by MAS from 70% to 60% for property purchases who are individuals with one or more outstanding housing loans at the time of the new housing purchase.

Previous Government measures have to some extent moderated the market, but sentiments remain buoyant. Low interest rates plus excessive liquidity in the financial system, both in Singapore and globally, could cause prices to rise beyond sustainable levels based on economic fundamentals. Moreover, when interest rates eventually rise, it could strain purchasers who have overextended themselves financially. Therefore, the Government has decided to introduce additional targeted measures to cool the property market and encourage greater financial prudence among property purchasers.