Should a citizen who are able to purchase a second or third property through the Total Debt Servicing Ratio (TDSR) regime even have to pay the Additional Buyer’s Stamp Duty (ABSD)? This was a question presented by Mr Christopher De Souza in Parliament on Monday, reported Channel NewsAsia.
He encouraged the authorities while retaining the ABSD for foreigners and TDSR for Singaporeans to remove the ABSD for Singaporeans.
“By keeping the TDSR, the Singaporean is only going to be allowed a credit line that’s within his means. By retaining the ABSD for foreigners, we help ensure that the foreigners WOn’t enter the Singaporean market in an exceedingly speculative way,” said the MP for Holland-Bukit Timah GRC. (See Cairnhill Nine Condo )
First introduced in December 2011, the ABSD was revised upwards in January 2013 to rein in Singapore’s escalating residential property costs.
Singaporeans are required to pay a ABSD of seven percent for a second property, and 10 percent for a third and following property. However, foreigners have to pay a ABSD of 15 percent for their first and subsequent property purchases.
The TDSR framework restricts the amount borrowers can spend on debt repayments to 60 percent of their gross monthly income.