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Home Loan Singapore Popular Products (Oct 18-Oct 21)

Weekly SIBOR and SOR Rates (Oct 18-Oct 22)

Legal Fee Reference

Impact of new landed property rules 'negligible'

Cooling-off period for sellers of HDB flats

S'poreans driving private property market, says Mah

Stamp duty relief for mergers and acquisitions

Foreign landed home owners: new rules

1). 1 months SOR package (SOR + 0.99%) for 1st 3 years, no lock-in.
         Type of customers: Home owners/investors refinancing with penalty

         Special Point: 1-month Sor is very low, it is at 0.21% at 20th Aug.

   2). 3 years fixed rate package at 1.20%, 1.60% and 1.90%.
        Type of customers: Home owners/investors planning for long term stay/holding period

   3). 3-month SOR/SIBOR combined package, no lock-in: (SIBOR+SOR)/2+0.95% through out
        Type of customers: All types of investors and home owners. You could take advantage of both index!

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Weekly SIBOR and SOR Rates (Oct 18 to Oct 21)

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Note:

Quoted legal fee included the following charges before banks' subsidy:

Lawyer's professional charge + CPF Lawyer's Charge + $500 Mortgage Stamp Fee + 7% GST

If your loan amount is more than $500,000, then the legal fee is fully paid by bank. You don't need to pay at all.

Your own cost = (Legal fee reference) - (Bank's Legal fee subsidy)

*For Maybank and Citibank Client, there is another 3rd party lawyer charge about $300 payable.

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PLANNED changes to rules on foreign ownership of landed property are not expected to make much of a splash, with demand and prices for these high-end homes set to stay the same, experts said.

Foreigners and permanent residents (PRs) make up only a small portion of the landed housing market – an average of 6.6 per cent of total transactions over the last 10 years according to CB Richard Ellis (CBRE).

Any ripple effect from the new rules would be "negligible", the experts added.

One of the proposed changes set out in the Residential Property (Amendment) Bill, introduced in Parliament on Monday, states that home owners with landed property would have to dispose of their property within two years if they give up their Singapore permanent residency or citizenship status.

Failure to do so could see owners faced with a fine not exceeding $20,000 or a three-year jail term, or both.

PRs who are uncertain about where they want to be based permanently, however, might now choose to purchase a condo rather than a landed property as doing so would come without such obligations, the experts added.

On Monday, National Development Minister Mah Bow Tan released figures showing that locals make up the bulk of private home buyers in Singapore. PRs made up 13 per cent and foreigners 12 per cent of sales in the second quarter, respectively.

Mr Ong Teck Hui, Credo Real Estate head of research and consultancy, said that since the landed housing market was primarily driven by locals, the impact of the new rules would be insignificant.

"A PR who is interested in purchasing a landed home is unlikely to be deterred unless he has a sense of uncertainty over staying on in Singapore," he added.

Cushman & Wakefield managing director Donald Han said the changes served to "tie up the loose ends", bringing the existing Act – introduced in 1973 – in line with housing policies as it prevented foreigners from speculating in Singapore's property market.

OrangeTee's head of research and consultancy Tan Kok Keong said the rules might provide a push for PRs to buy high-end condos instead as PRs who could afford landed homes were affluent.

He said that foreigners made up only a small segment of the landed housing market as the Government had been quite strict with them owning such properties. Foreigners need permission from the Land Dealings (Approval) Unit (LDAU) before they can own landed property.

On mainland Singapore, the main criteria are that they are PRs and that they make an adequate economic contribution. However, non-PR foreigners may buy landed homes at Sentosa Cove, subject to LDAU approval.

Usually, foreigners may buy landed homes not exceeding 15,000 sq ft in land area. They may, at any one time, own just one landed home in Singapore and it must be for owner occupation only.

On the mainland, foreigners also have to hold the property for at least three years before selling. There is no minimum holding period for Sentosa Cove.

CBRE said PRs were responsible for 165 – or 5.5 per cent – of 3,007 landed home transactions from Jan 1 to Sept 9.
This figure ranged from a low of 4.4 per cent in 2000 to a high of 6.8 per cent in 2006 over the past 10 years.

Most of the PRs bought terrace houses this year, with the highest number of landed home transactions taking place in District 15 – which includes Katong, Telok Kurau and East Coast Road – followed by Districts 10 and 19.

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FROM next month, sellers of Housing Board (HDB) flats have to observe a seven-day cooling-off period before they can grant an option-to-purchase (OTP) to the buyers.

The HDB said yesterday that the new ruling is part of the enhanced procedures to better protect the interests of sellers and buyers, and help them make informed and prudent decisions.

Flat sellers have to observe the cooling-off period after they complete the resale checklist and before granting the OTP to buyers.
The enhanced checklist also requires sellers who want to buy another HDB flat to calculate the estimated sale proceeds of their current flat and a financial plan for the purchase of the next flat.

In Parliament yesterday, changes to the Residential Property (Amendment) Bill were proposed.

If passed, the changes may mean that landed home owners have to dispose of their property within two years if they lose their permanent residency or citizenship status.

Failure to do so could see them fined up to $20,000 and/or jailed up to three years.

If passed, the new Bill will also increase a range of other penalties outlined under the Residential Property Act.

The Act was introduced in 1973 and imposes restrictions on foreign ownership of restricted properties, namely landed homes, strata-landed housing and vacant residential land. Foreigners, in this case referring to PRs, must get approval from the Singapore Land Authority before purchase.

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LOCAL buyers still make up the bulk of private home buyers in Singapore. Permanent residents (PRs) made up 13 per cent and foreigners 12 per cent of sales in the second quarter respectively.

Similarly, speculative activity in the private property market is driven mostly by locals. PRs and foreigners accounted for about 27 per cent of all sub-sales in the past two years.

National Development Minister Mah Bow Tan revealed these figures yesterday in Parliament in response to MPs who asked if PRs and foreigners were "flipping" properties in Singapore.

Flipping, or a sub-sale, takes place when a buyer purchases a new apartment, then resells it before construction is complete.

Mr Mah added that the second quarter sales figures were close to the average of 12 per cent and 10 per cent for PRs and foreigners respectively over the past two years. PRs and foreigners also account for a relatively low 6 per cent of all landed home sales.

As a cosmopolitan city, it was important for Singapore to let foreigners and PRs buy properties here, while monitoring "how much of the market is actually made up of foreigners and PRs", he said.

MPs also voiced their concerns on the health of Singapore's property market, with Madam Cynthia Phua (Aljunied GRC) asking whether any more measures would be introduced.

Mr Mah responded that this "ultimately depends on what happens in the (property market) situation".

"We have taken an approach of having few calibrated steps rather than to take one big step or one big bang approach to try to cool the market down."

Given many factors involved in shaping the property market, Mr Mah said it was "presumptuous or even foolhardy" to predict what the market would be like in a year.

He added: "Where we see that there is a danger of the market heating up further or not moving in a healthy direction, we reserve the right to take the appropriate action."

On the market reaction to the recent measures, Mr Mah noted that "there are signs of greater stability in the market".

Based on flash estimates, the increase in private home prices has moderated to a 3.1 per cent increase in the third quarter, compared to 5.3 per cent in the second.

Volume of sales of private homes and HDB resale flats declined 28 per cent and 25 per cent respectively last month compared to August.

Responding to Ms Lee Bee Wah (Ang Mo Kio GRC), Mr Mah reiterated that the recent rules tightening ownership of HDB flats was to dampen demand from those who are not in urgent need of housing.

For example, those who own private property here or overseas, and want to buy an HDB flat, must dispose of their private property within six months. Responding to MPs' concerns, Mr Mah said that HDB will look into the circumstances of special cases.
HDB has received over 100 appeals from potential flat buyers who own overseas properties, and over 150 appeals from those who own local private properties.

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THERE is some financial help for businesses keen on growing by restructuring their operations, but who are deterred by the high costs of mergers and acquisitions.

The Stamp Duties Act was amended by Parliament yesterday to help minimise such costs for companies, especially small and medium-sized enterprises.

Under the Stamp Duty Relief Scheme, buyers can get up to $200,000 in stamp duty relief each financial year when acquiring ordinary shares.

The relief, applicable from April 1 this year, is one of two initiatives announced in the Government's Budget in February to help businesses here grow.

The other is an income tax allowance, which was also passed by Parliament yesterday in amendments made to the Income Tax Act.

Other changes were also made to the Stamp Duties Act yesterday, following the Finance Ministry's periodic review of the stamp duty system, said Finance Minister Tharman Shanmugaratnam yesterday during the debate on the amendments.

One key change will empower the Government to recover stamp duty relief given earlier, if later it is found that the company does not meet the qualifying conditions, such as transfer of assets between associated entities and conversion of a firm into a limited partnership.

Penalties will be imposed on any late payment of this stamp duty, said Mr Tharman.

Another tweak: The seller's stamp duty in a property transaction applies not only to contracts or agreements, but also to any conveyance instruments if the transaction had no contract or agreement.

This amendment is applicable from Feb 20 this year when the Government introduced a seller's stamp duty on those who buy a residential property and sell it within a year, in a bid to cool the property market.

Before this, stamp duty was levied only for the purchase of a property, not its sale.

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HOME owners with that prized landed property address may have to dispose of their property within two years if they give up their Singapore permanent residency or citizenship status.

Failure to do so could see owners faced with a fine not exceeding $20,000 or a three-year jail term, or both.

There is no such requirement currently. This new rule is one of the proposed changes set out in the Residential Property (Amendment) Bill, introduced in Parliament yesterday. If passed, the new Bill will also stiffen penalties.

The Act, first introduced in 1973, imposes restrictions on foreign ownership of restricted properties, namely landed homes, strata-landed housing and vacant residential land.

Foreigners – who must be permanent residents in this case – must get approval from the Singapore Land Authority before buying such "restricted" properties.

The penalties have not been revised since 1974. The new Bill will introduce harsher penalties for those who breach the rules.

Under the Act, foreign buyers can only purchase one landed home for owner-occupation and cannot rent it out.

He must also sell his existing property before buying a new one, and is not allowed to sell the property in the first few years of ownership. The exact period depends on whether the property is still under construction or completed.

Owners found to breach the above rules will be fined up to $200,000 – up from $5,000 previously, with a new fine introduced of $2,000 per day for any continuing offence.

Another change requires a foreigner who inherits a landed property to sell it off within five years instead of 10 years.

Rules for foreign private developers will also change. A developer is considered "foreign" if it has any foreign shareholders or directors, so this includes major developers here such as public-listed developers CapitaLand, Keppel Land and City Developments.

Under existing rules, they have to complete their developments within a certain timeframe and sell all units within two years of receiving the Temporary Occupation Permit.

Under the Bill, developers may be charged a fee for any extension of time beyond the given period, similar to rules under the Urban Redevelopment Authority's Government Land Sales programme.

Managing director William Wong of RealStar Premier Property, a landed home specialist, did not think the proposed changes would have a big impact on the landed housing market, noting that "most PRs who relinquish their status do try and sell their homes when they leave Singapore anyway".

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Source is from the straits times, government website and other medias.

Written and edited by: Media & P.R Dept, Home Loan Singapore