Singapore raises stamp duty, tightens loan rules as house prices rise sharply

SINGAPORE: Singapore yesterday announced a five percentage point rise in stamp duty for some home buyers and tightened housing loans in a bid to cool the property market and keep price increases in line with economic fundamentals.

After falling for nearly four years, house prices started rising in the third quarter of last year and have increased by 9.1% over the past year, the Singapore government said in a statement.

“The sharp increase in prices, if left unchecked, could run ahead of economic fundamentals and raise the risk of a destabilising correction later, especially with rising interest rates and the strong pipeline of housing supply,” it said.

Stamp duty for Singaporeans and permanent residents buying their first home will be unchanged, but those buying their second or more properties will see increases of 5 percentage points effective today, it said.

Foreigners would now have to pay stamp duty of 20% versus 15% previously, while the amount goes up by 10 percentage points for “entities”.

An additional 5% stamp duty will be introduced for developers buying residential properties for development, it said.

The loan-to-value limits will be tightened by 5 percentage points for all housing loans issued by financial institutions effective today. – Reuters