5 Facts You Should Know About Buying That Second Property

If you’re an HDB flat owner who plans to buy a second property, you need to read this first.

Your HDB flat has finally completed its Minimum Occupation Period (MOP) of five years. Of course, you’re not planning to sell it and cash in. Instead, you’re going for the Singapore Dream of owning multiple properties. You plan to keep it and buy a second property. However, before you gleefully count your rental income, here are five facts you should know.

1. THE BASICS

We shouldn’t have to say this, but you’ll be surprised that some people are blithely blur about it. When we say ‘buy a second property’, we mean private property. We’ve actually heard several people boast that they intend to flip their Build-to-Order (BTO) flat for a handsome profit and buy two flats. Uh, no. Everyone is allowed to own only one HDB flat at any one time. These are subsidised public flats, so why would the government sell you an extra one for you to make rental income?

2.THE(UPDATED COOLING MEASURES)

Revised by the Monetary Authority of Singapore since July 6 in 2018, these measures are:

Higher Additional Buyer’s Stamp Duty (ABSD)

For Singapore citizens buying a second property, it’s now 12 percent (up from 7 percent). For Permanent Residents, it’s 15 percent (up from 10 percent). For foreigners, a flat rate 20 percent (increased from 15 percent) applies regardless of the number of properties you’re buying.

Lowered Loan-to-Value (LTV) limits

This means you can borrow less money than before, resulting in a higher down payment. If you are getting a second property loan, your LTV limit has decreased from 50 to 45 percent.