Budget 2023: Further support for First-time Homebuyers & Increased Buyer's Stamp Duty (BSD) rates for Higher-valued properties
By Kelvin Sin | Livefree.sg | 14 February 2023
The Singapore government is introducing measures to make public housing more affordable and accessible for young families buying their first homes. This includes an increase in the CPF Housing Grant for eligible first-time buyers, as well as giving greater priority during BTO applications to First-Timer families with children and young married couples aged 40 years and below who are buying their first home.
INCREASE HDB SUPPLY
The current tightness in BTO supply has been driven by several factors, including the disruption to HDB flat construction caused by the COVID-19 pandemic and a shift in social norms. To meet the increased housing demand, the government has ramped up the supply of BTO flats by 35% to 23,000 in 2022 and will continue to launch 23,000 BTO flats this year.
INCREASED HOUSING GRANTS
The resale market meets the housing needs of first-time homebuyers who may have specific locational preferences or a desire to secure homes sooner. However, the current strong HDB resale market may pose affordability challenges for some homebuyers. To further improve the affordability of resale flats, the government will provide even more support for First-Timers through an increase in the CPF Housing Grant amount. Currently, eligible First-Timers buying a resale flat can receive up to $160,000 in housing grants. HDB will increase the CPF Housing Grant from $50,000 to $80,000 for eligible First-Timer families buying a 4-room or smaller resale flat, and from $40,000 to $50,000 for First-Timer families buying a 5-room or larger resale flat. With the new changes, First-Timers buying a resale flat can receive up to $190,000 in housing grants.
For eligible buyers who submit their resale applications on or after 1 Apr 2023, HDB will disburse the increased grant quantum before resale completion. For eligible buyers who have yet to complete their resale transaction by 3:30pm on 14 Feb 2023, or submit their resale applications on and from 3:30pm on 14 Feb 2023 to 31 Mar 2023, HDB will disburse the additional grant quantum within three months from the date of their resale completion.
MORE PRIORITY TO FIRST-TIMERS
HDB will also introduce a new sub-category of First-Timers comprising families with children, and young married couples aged 40 years and below, who are buying their first home. This sub-category of prioritized First-Timers will receive additional support, including an additional ballot chance for their BTO applications, to support them in securing their BTO flats in a more timely manner.
The government is committed to keeping public housing affordable and accessible, to meet the housing needs of Singaporeans. The measures announced supplement existing measures to address the current tight BTO supply and enable more genuine first-timer applicants to own their first home.
The Singapore government has announced an increase in Buyer's Stamp Duty (BSD) rates for higher-value residential and non-residential properties. The top marginal BSD rate for residential properties will be raised from 4% to 5% for the portion of the value of the property in excess of $1.5 million and up to $3 million, and to 6% for the portion in excess of $3 million. For non-residential properties, the rate will be increased from 3% to 4% for the portion in excess of $1 million and up to $1.5 million, and to 5% for the portion in excess of $1.5 million.
The revised BSD rates will apply to all properties acquired on or after 15 February 2023, while a transitional provision will allow the previous rates to apply for cases where the Option to Purchase (OTP) was granted by sellers to potential buyers on or before 14 February 2023 and exercised on or before 7 March 2023, or within the OTP validity period, whichever is earlier, and has not been varied on or after 15 February 2023.
The Additional Conveyance Duties for Buyers (ACDB) will also be raised from up to 44% to up to 46% for qualifying acquisitions of equity interest in property holding entities (PHEs). These adjustments are aimed at enhancing the progressivity of the BSD regime.