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Seedly Property Cooling Measures 2021

A New Homeowner’s Guide: Property Cooling Measures And How They Affect You

profileKenneth Fong

Despite the economic impact of Covid-19, the private residential and HDB resale markets have been buoyant.

Source: SpongeBob SquarePants | Giphy

I mean, nobody’s travelling and we’re all stuck at home… naturally, people start buying stuff.

Some people buy random things online… while others buy property.

Don’t believe me?

Private housing prices have risen by about 9 per cent since 1Q2020.

And HDB resale flat prices have also recovered sharply — by about 15 per cent since 1Q2020.

All of this on the back of a low-interest-rate environment means that housing prices are increasing (read: bad news for potential homeowners).

This means that it’s time for… the Government to step in.

TL;DR: New Property Cooling Measures 2021

In order to keep the private and public housing markets within reach of most Singaporeans, the Government will be implementing new property cooling measures to keep prices in check.

Effective 16 December 2021, the following property cooling measures will kick in:

  • Higher Additional Buyer’s Stamp Duty (ABSD) rates
  • Lower Total Debt Servicing Ration (TDSR) threshold
  • Tighter Loan-to-Value (LTV) for HDB housing loans
Source: Ministry of National Development (MND)

Oh, the Government has also stated that they will also be increasing the supply of public and private housing to meet housing demand.

Yay? (I mean… isn’t that what they’ve constantly been doing?)

So… how does all of this affect you as a homeowner?

Let’s find out.

Higher Additional Buyer’s Stamp Duty

For Singapore Citizens and Permanent Residents buying their first residential property… don’t panic.

Source: SpongeBob SquarePants | Giphy

The current Buyer’s Stamp Duty rate will remain unchanged at 0 per cent and 5 per cent respectively.

However, their second, third, and subsequent residential property will incur increased ABSD rates.

For Singapore Citizens

  • Second residential property: 17 per cent (up from 12 per cent)
  • Third and subsequent residential property: 25 per cent (up from 15 per cent)

For Permanent Residents

  • Second residential property: 25 per cent (up from 15 per cent)
  • Third and subsequent residential property: 30 per cent (up from 15 per cent)

For foreigners and entities, they’ll also incur more ABSD when purchasing any residential property.




Basically, if you’re buying more property as a form of investment, you’ll definitely feel the pinch.

If you’re in the market for a roof over your head, then you should be okay.

And if you like tables, here’s one detailing all the changes to the ABSD:

Additional Buyer's Stamp DutyProperty TypeRates till 15 Dec 2021Rates on or after 16 Dec 2021
Singapore CitizensFirst residential property0%0%
(No change)
Second residential property12%17%
Third and subsequent residential property15%25%
Permanent ResidentsFirst residential property5%0%
(No change)
Second residential property15%25%
Third and subsequent residential property15%30%
ForeignersAny residential property20%30%
EntitiesAny residential property25%

(plus additional 5% for housing developers)

(plus additional 5% for housing developers)

FYI: the revised ABSD rates will apply to cases where the Option to Purchase (OTP) is granted on or after 16 Dec 2021.

Transitional Provision for ABSD Rates

Those who’re in the midst of buying their new residential property are probably going, “Siao liao la… (Hokkien: Oh damn…) should’ve closed the deal earlier!”

Chill, bruv.

There’s a transitional provision that allows for the old ABSD rates to apply to certain cases.

You’ll just have to meet ALL of the following conditions:

  • The OTP is granted by sellers to potential buyers on or before 15 Dec 2021
  • The OTP is exercised by the buyer on or before 5 Jan 2022 OR within the OTP validity period (whichever is earlier)
  • The OTP has not been varied on or after 16 Dec 2021 (meaning: no renegotiating of the price)

Lower Total Debt Servicing Ratio Threshold

The low-interest-rate environment has seen many reach out for properties that maybe slightly out of their financial lane.

To prevent borrowers from being vulnerable to a possible rise in interest rates in the future by taking on more loans than they can effectively service.

The TDSR threshold will be lowered to 55 per cent (from 60 per cent).

This means that your mortgage cannot cause your total monthly loan repayments to exceed 55 per cent of your total monthly income.




So let’s say you and your partner earn a combined monthly salary of $5,000 and are looking to purchase an HDB flat.

Based on the tightened TDSR threshold, your maximum monthly loan repayment amount cannot exceed $2,750 (down from $3,000).

This is assuming you and your partner do not have any existing debt or loans (e.g. car loan or education loan)

Note: TDSR is currently waived for borrowers who refinance their owner-occupied housing loans. If you’re refinancing your existing investment property loans, MAS has provided a temporary TSDR waiver for borrowers affected by Covid-19.

In simpler English, if you have an existing property loan granted before 16 Dec 2021, you will NOT be affected by the revised TDSR threshold when refinancing.

BUT if you plan to refinance after 16 Dec 2021, the revised TDSR thresholds will probably apply.

Tighter Loan-to-Value Limit for HDB Housing Loans

In their bid to instil better financial prudence in homeowners, the LTV limit for HDB housing loans will also be lowered to 85 per cent (down from 90 per cent).

Note: the revised LTV limit does not apply to loans granted by financial institution (e.g. banks) which remain at 75 per cent

This new LTV limit will apply to new flat applications for sales exercises launched after 16 Dec 2021 (read: from the February 2022 BTO sales exercise onwards).

As well as to complete resale applications received by HDB from 16 Dec 2021 onwards.

FYI: a complete resale application is where HDB has received both sellers’ and buyers’ portions of the resale application

What this all means is that it reduces the maximum amount potential homebuyers can borrow from HDB.

So you’ll be “forced” to take a hard look at, “What kind of HDB flat can you REALLY afford?

(as though this isn’t something that you should already be doing…)

About Kenneth Fong
I threw all of my money into the longkang once... because I wanted to see my cash flow.
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