How does Singapore Budget 2018 affect property buyers in Singapore?

4 min read
budget 2018 proximity housing grant buyers stamp duty
Photo credits: Herman Wu

Singapore Budget 2018 was announced today, and carries some long-term implications on our property market. On the upside, buyers can breathe easy at the lack of new cooling measures. On the other hand, taxes are rising across the board, and the property market isn’t spared. Here’s what you need to know:

The main changes to the property market following Singapore Budget 2018 at a glance

The key points that affect the property market are:

– Expansion of the Proximity Housing Grant (PHG) to cover singles

– Raised Buyer’s Stamp Duty (BSD) for residential properties exceeding $1 million

– Rise in Goods and Services Tax (GST)

  1. Expansion of the PHG to cover singles

The original PHG provided a grant of $20,000, to families buying resale flats near their parents. Singles could get a PHG, but only if they lived with their parents (not just near them), and the grant was only $10,000.

The definition of “near” was also complex, and subject to many different criteria.

This scheme has been changed significantly.

First, the definition of “near” has been simplified. The PHG now applies to Singaporeans who buy a resale flat within four kilometres of their parents.

Singles will now get a grant of $10,000 for living near their parents, and a grant of $15,000 for living with their parents.

As an aside, regular families who live with their parents will get a PHG of $30,000, instead of $20,000.

This new PHG scheme complements the government’s eldercare efforts. The intent is to get the public to look after their parents, rather than having a glut of senior citizens who are wholly dependent on government and community services.

More directly however, we may see rising interest in resale flats, particularly from singles. Given the new PHG, many may now decide to buy a resale flat, rather than wait for a BTO under the singles scheme. After all, they can get a $10,000 grant, plus avoid a two year wait for a new unit.

  1. Raised BSD for residential properties exceeding $1 million

There is a one per cent tax increase, for properties valued at above $1 million. Here’s how it works:

BAS based on property valuation Old BSD rates (Before 19th February 2018) New BSD rates (After 20th February 2018)
1% First $180,000 First $180,000
2% Next $180,000 Next $180,000
3% Any amount exceeding $360,000 Next $640,000
4% N/A Any amount exceeding $ 1 million

For example, consider a residential property valued at $1.2 million. Under the old BSD rates, the tax would be:

First $180,000 = $1,800

Next $180,000 = $3,600

Amount exceeding $360,000 = $25,200

Total BSD: $30,600

Under the new BSD rates, the tax would be:

First $180,000 = $1,800

Next $180,000 = $3,600

Next $640,000 = $19,200

Amount exceeding $1 million (in this case, $200,000) = $8,000

Total BSD: $32,600

If the Option to Purchase (OTP) has been issued to buyers on or before 19 February the current BSD rates will apply, provided the OTP is exercised within three weeks of the announcement of Budget 2018 (on or before 12 March).

  1. Rise in Goods and Services Tax

GST will go from 7% to 9%, sometime between 2021 and 2025. This has an impact on commercial properties, as they are subject to GST.

At present, the tax impact of buying a commercial property for investment is not much different (in a strict dollar sense) from buying a residential property. If you buy a second residential property, you’ll be taxed 7% Additional Buyers Stamp Duty (ABSD), for Singapore citizens.

A commercial property has no ABSD, but the 7% GST generally equalises this.

But when the GST hits 9%, the tax on buying a commercial property, as opposed to a second residential property, will become higher. As such, Singaporean investors* might do better to look at the residential sector, when that time comes about, all things being equal. 

*Singaporean Permanent Residents pay 10 per cent ABSD on the second house, and foreigners pay a flat 15 per cent ABSD, so this does not apply to them.


Looking to sell your property?

Whether your HDB apartment is reaching the end of its Minimum Occupation Period (MOP) or your condo has crossed its Seller Stamp Duty (SSD) window, it is always good to know how much you can potentially gain if you were to list and sell your property. Not only that, you’ll also need to know whether your gains would allow you to right-size to the dream home in the neighbourhood you and your family have been eyeing.

One easy way is to send us a request for a credible and trusted property consultant to reach out to you.

Alternatively, you can jump onto’s Property Value Tool to get an estimate for free.

If you’re looking for your dream home, be it as a first-time or seasoned homebuyer or seller – say, to upgrade or right-size – you will find it on Singapore’s fastest-growing property portal

Meanwhile, if you have an interesting property-related story to share with us, drop us a message here — and we’ll review it and get back to you.

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