Rules for buying second property in Singapore – For Investors

rules for buying second property in singapore

Table of Contents

Figuring out how you can purchase a second property in Singapore ? 

It is important to be aware of all the up to date ruling that will determine how you can go about purchasing your second property. 

This article was written to serve as the one stop resource for you to review all the current ruling from HDB, IRAS, MAS and CPF, governing the purchase of a second property in Singapore. 

Rules on eligibility to purchase second property in Singapore

If you are currently owning a HDB flat 

If you are an existing HDB or BTO owner, you are only eligible to purchase a second property after you fulfil the 5 year minimum occupation period. 

Extract from current HDB regulation governing acquisition of private property.

“Before you and your spouse can acquire private residential property, you will first have to fulfil your flat’s minimum occupation period.”

Type of HDB FlatMOP Duration
BTO – Standard5 years
BTO – Plus10 years
BTO – Prime10 years
Resale HDB5 years
DBSS5 years
Executive Condo (EC)5 years

MOP duration is computed using the date of taking possession of your flat to the date on which options to purchase second private property is exercised or the date of signing sale and purchase agreement for the second private property. 

The second clause, date of signing sale and purchase agreement is specifically targeted at buyers purchasing new launch development as second property. There is no option to purchase involved in the new launch development purchase process. 

If you are currently owning a executive condo (EC)

Similar to HDB flats, new ECs when purchased directly from developers are considered government subsidised housing. Hence, a mandatory 5 year minimum occupation period needs to be fulfilled before you can purchase a second property or even consider plans such as decoupling property

If you are currently owning a resale executive condo

For resale EC, the rules are different. They are deemed a private property in the eyes of HDB. Hence, you are free to purchase a second property or pursue plans to decouple for a resale EC. 

As a side note, resale ECs are still subjected to the 3 year stamp duty rule. Selling the resale EC prematurely within 3 years of ownership will subject the EC to the following seller stamp duty charges. 

How long property has been heldSSD rate
Up to one year12%
More than one year and up to two years8%
More than 2 years and up to 3 years4%
More than 3 yearsNo SSD payable

A point to note, resale EC owners are not allowed to purchase a HDB flat as a second property. You are only allowed to purchase a private property as a second property.

If you are currently owning a private property 

Private property are free to purchase a second property without the need to fulfil any MOP. Similar to resale EC, the 3 year seller stamp duration is applicable. 

However, it is important to note that you are not allowed to purchase a HDB as a second property. You are only permitted to purchase another private property as a second property.

In order to purchase another HDB, private property owners would need to dispose of their current private property, serve out a 15 months cooling period to purchase a resale HDB or serve out a 30 months cooling period to purchase a BTO or new EC. 

If you are a Singapore PR 

If you are a Singaporean PR and are currently a owner of a HDB flat, you will not be eligible to purchase a second private property while holding on to your HDB flat. 

Owning HDB flat and a private condo as a second property remains only permissible for Singapore citizens. 

For more insights on owning HDB and a private property, refer to a dedicated article on “ can i own a hdb and condo “. 

What can you buy as a second property ?

You can only purchase a private property as a second property, you will not be allowed to purchase any HDB subsidised property as your second property.  

This includes resale HDB, BTO and new ECs. 

To pay Additional Buyer Stamp Duties (ABSD) on the second property 

Before you celebrate your eligibility to purchase your second property. The catch is that you will have to pay an additional buyer stamp duty on your second property. 

This is to be paid on top of the buyer stamp duty. 

ABSD rate table as follow

Citizenship profileABSD (%)
Singapore citizen – 2nd property20%
Singapore citizen – 3rd and subsequent property30%
Singapore PR – 1st property5%
Singapore PR – 2nd property30%
Singapore PR – 3rd and subsequent property35%
Foreigner – any property60%

To calculate the additional stamp duty required for the purchase of your second property, refer to the 2nd property stamp duty calculator

Methods to legally avoid paying ABSD on second property

Not exactly rules per say, but these are common methods property owners used to legally avoid paying ABSD. In order of popularity and ease of implementation. 

HDB Essential Occupier Scheme

HDB owner occupier, is one of the only surviving regulations that allows a couple owning a HDB to purchase a second private property without ABSD. 

Unfortunately, you can only structure your HDB ownership under the owner occupier scheme at the onset of HDB purchase. By listing one of your spouses as an occupier instead of an owner, your spouse, the HDB occupier will be able to purchase the second private property without ABSD upon the completion of the 5 year MOP period. 

The downside is that, the CPF of the spouse listed as occupier will not be able to use his or her CPF to finance the HDB. 

Quick intro – Decoupling Expertise

Quick introduction, before you decide to commit the next 5mins reading this article.

We are decoupling expertise, a team of specialist realtor that specialise in helping Singapore property owners derive the best strategy to purchase their second investment property without ABSD.

While decoupling property is often the go-to strategy that property owners adopt. We pride ourselves for helping our client explore and evaluate other alternatives that best suit individual circumstances and objectives.

Drop us a text to explore the best strategy to minimise ABSD on your next property purchase.

Rules governing the use of loan to finance second property

Under MAS ruling, property owners with one outstanding home loan will not be able to qualify for the maximum 75% loan to valuation ratio on the second property. 

You will only be able to take a 45% or 25% loan to value ratio on your second property. 

To qualify for the upper limit of 45% loan, you will need to ensure that loan tenure does not exceed 30 years and loan period when adding on to your age does not exceed 65 years. 

In addition to that, a minimum 25% cash deposit is required to be paid for when purchasing the second property. 

For more insights on 2nd property loan ltv, refer to article inline. 

Rules governing the use of CPF on the second property

As an overarching rule, you can only use CPF to fund your second property if the property has at least 20 years of lease remaining. 

Per CPF board regulation, second property with less than 20 years of lease life cannot be funded by CPF. 

As a second criteria, in order to use CPF to fund your second property. You would need to at least set aside the basic retirement sum or full retirement sum, before you can use excess CPF to fund the second property purchase. 

For more details on “ How much CPF can I use for second property “ refer to article link inline. 

Rules governing the rental of property after you own your second property

Can you rent out your current HDB after you purchase a second private property ? 

Yes you will be able to rent out your entire HDB unit and live in the second private property. To do that you would have to seek approval from HDB. 

HDB Approval application link as follows

More reads, more gains ?

Kudos on making it this far. The fact that you have invested the last 5 mins reading this article. We believe you are a like minded real estate investor looking to beat the rat race by getting more out of your real estate investment. 

If so, do check out the following articles. 

Author

  • Jue Wen

    Jue Wen is the content marketing lead. This means he spend his waking hours researching and writing all things real estate. He believes life is a hustle and there is no joy in grinding away daily in our little rat races. He believes making wise moves in real estate investment can be a game changer. Aside from writing all things real estate, you can find him in your nearest bouldering gym.

Looking to purchase your second property?

Just fulfilled your MOP status for your executive or BTO or Looking to decouple from your current condomium? Or simple looking to purchase your 2nd investment property? Having assisted over 50 clients on their journey towards purchasing their second property, we have got the expertise to help you avoid unnecessary ABSD, optimise legal cost and clarify your doubts.

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Jue Wen

Author

Jue Wen is the property analyst and content marketing lead at decoupling expertise.
He specialises in helping clients overcome the complexities involved in owning their second private property in Singapore.
He had over 10 years of experience in real estate investing and have written over 40 detail guides on decoupling and minimising ABSD. He is a licensed real estate consultant and holds a Bachelor degree in Business Management from the Nanyang Technological University.

Kenji

Co-Author

Kenji is the Group Division Director of ERA Realty Network.
He have got over 20 years of experience in real estate and have successfully helped over 50 couples purchased their second property. He specialises in helping client achieve the best approach towards acquiring their ideal investment properties while minimising ABSD.