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RES Course

Financial Calculations

Lease Stamp Duty

0.4% x Average Annual Rent x number of years (cap at 4)

SSD

Sold within Residential Rate Industrial Rate
<= 1y 12% 15%
<= 2y 8% 10%
<= 3y 4% 5%

BSD

Purchase Price/Market Value Residential BSD Rate
First $180k 1%
Next $180K 2%
Next $640k 3%
Next $500k 4%
Next $1.5m 5%
Excess of $3m 6%

For Non-residential BSD rate, the difference is “Excess of $1.5m, 5%”

ABSD

Category 1st 2nd 3rd and more
SC 0% 20% 30%
PR 5% 30% 35%
Category  
Foreigners 60%
Entity/Trust 65%
Developer 5% + 35% remittable
  • Developer 35% remittable upon condition: Sell ALL within 5 years of land purchase
  • Married couple can refund when sold 1st property within 6 months
  • Remission of ABSD (Trust), for individual and without condition
  • SC + PR/FR 1st matrimonial home can refund
    • All others take the higher rate
  • FR from Switzerland, Norway, America/USA, Iceland & Liechtenstein (SNAIL) will be treated as SC, due to Free Trade Agreements

Qualifying Certificate (QC)

  • Imposed on foreign developers and listed company, excluding Sentosa Cove
  • Completed within 5 years -> obtain TOP
  • Thereafter TOP, must sell ALL within 2 years
    • Can extend up to 3 years with charges: 8/16/24% of land price
    • Pro-rated to number of unsold units
  • Loophole: delist or sale to associate company
  • ABSD supersedes QC
    • More punitive, no pro-rate

Property Tax

Annual Value x Progressive Rate

  • Commercial & Industrial is 10%
  • Residential is progressive rate, with a big table..
    • Different owner occupied or not
    • With changes in 2023, 2024.. Refer to IRAS

For 2024, owner occupied:

Annual Value Rate
1st $8k nothing
Next $22k 4%
Next $10k 6%
Next $15k 10%
Next $15k 14%
Next $15k 20%
Next $15k 26%
Exceeds $100k 32%
  • Paid by 31 Jan, in advanced for the year
    • If HDB has 3m extension of stay, it is non-owner occupied for that 3m
    • When sold, buyer to privately reimburse to seller
  • Addition & alteration (A&A) works
    • Continue owner occupied
  • Demolition
    • AV = 5% of market freehold value of land
    • Rate = 10% (as if non-residential)
    • Remission to owner-occupied rate for max 2y
  • Lease
    • When lease starts and paid stamp duty, IRAS will auto update
    • When lease end, must manually apply

Mortgage

  1st Loan 2nd Loan 3rd Loan
Cash downpayment 5% 25% 25%
LTV
-20% if >30y or past 65yo
75% 45% 35%
  • The rest with CPF/Cash
  • Private max tenor is 35y
    • When LTV is -20%, the cash downpayment for 1st Loan is 10%
  • HDB Specials!
    • Max LTV 80%
    • Max tenor 25y for HDB Loan, 30y for Bank Loan
  • Stress testing interest rate
    • 4% for residential, 5% for commercial
    • HDB loan 3% (actual interest 2.6%)
  • Total Debt Servicing Ratio (TDSR)
    • Max 55% of income for paying all debts
    • Haircut of 30% for all variable income
    • Less other debts eg car loan etc = New loan max repayment
  • Mortgage Servicing Ratio (MSR)
    • Max 30% of income for property loan(s)
    • For BTO, new EC, and resale HDB (all has MOP)
    • Unlike TDSR, does not consider other debts; MSR only consider property loans
    • More stringent than TDSR
  • Rights of the Mortgagee (Lender): Possession, Insure, consolidate loans, foreclose
  • Rights of the Mortgagor (Borrower): Redemption, Sell, Inspect Title Deeds, Compel Transfer of Mortgage, Enjoyment

Income Weighted Average Age

Rounded up of (Age1 x Income1) + (Age2 x Income2) / (Income1 + Income2)

Mortgage Repayment Formula

m = Pr(1+r)^n / ((1+r)^n - 1)

  • m is monthly repayment amount
  • P is the principal sum
  • r is the monthly interest rate (yearly / 12)
  • n is the number of payments (year x 12)

Mortgage Duty

0.4% x loan amount, cap at max $500

Max CPF Usage

(Remaining Lease - 20) / (95 - 20 - youngest age) x Valuation Limit

Floor Area

sqm x 10.764 = sqft