4 Things to Consider Before Buying Private Property for the First Time

With all these new and exciting private developments lined up, we’re jumping out of our seats to get a piece of that pie too. But before you start to sell your property, consult this list of things to consider before buying your first private home.
11 Mar 2019 Language: English

Are you thinking of buying your first private property? Perhaps you and your partner have saved up and are ready to build a home in a new condo. If you’re nodding along, we’ve got good news for you. According to Singapore Business Review, private property buyers will have their pick of the crop as there will be a whopping 60 new projects set to launch in 2019 alone. This closely follows the wildly successful wave of project launches in the tail-end of 2018.

Keen to get a piece of that pie? Here’s a list of things to consider before you enter the glitzy fast lane that is Singapore’s private market.

1. Additional Buyer's Stamp Duty

Loathed by second-time home buyers (and for good reason), the ABSD rates increased from 7% to 12% after the 2018 property cooling measures kicked into full gear. But how does this impact first-time private homeowners exactly? You’ll still have to fork out ABSD temporarily, as the amount will be refunded to you once you’ve sold your previous property within the 6-month window.

2. Loan-To-Value

Another casualty to government-enacted property cooling measures are the LTV rates which have been lowered from 80% to 75% (if this is your first bank home loan or you’ve paid off your existing home loan). Home buyers now have less wiggle room in terms of borrowing money from the bank to finance their home. A drop in the LTV rate also means you’ll need to pay a higher down payment which is payable via cash or CPF.

3. Total Debt Servicing Ratio

The TDSR is meant to work in the best interest of home buyers from over-committing to a mortgage that they otherwise would not be able to afford. As such, you can only allocate a maximum of 60% of your monthly income to servicing your monthly loan payments. Do note that this cap is set much tighter (i.e. 30%) if you’re looking to buy an EC.

4. Property Tax

If you’re thinking of owning a private home with the intention to physically live in it after purchasing, we’ve got good news. Owner-occupiers get to enjoy lower tax rates than those who are merely investing (i.e. non-owner-occupiers). The tax rate that will be charged on your property is progressive, which means it’s based on the annual value of your property. According to IRAS, you’re able to find the tax rate of your property by checking out their e-Service.

But hey, it’s not all doom and gloom in the private market. Despite property cooling measures trying its best to deter buyers from the ever-hot private property market, experts are predicting a bustling buyer’s market for private property, as the demand for last year’s launches such as Affinity at Serangoon is still going strong, comprising a huge chunk of private property sales in January 2019. Will you be one of those standing in the line to get a peek of the buzzworthy sales gallery?

Attention all private property seekers! Ohmyhome is now your touch point to the best projects. We work together with the most established property developers in Singapore to present to you unbiased first-hand information, score invitations to VIP previews and get project catalogues along with exclusive discounts. Rest assured, there’s No Sales Commission and No Service Fee.

Check out these launches and arrange a personalised viewing tour now!

Sources: GoBear, IRAS

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