How much do you need to buy second property in Singapore

How much do you need to buy second property in Singapore

How much do you need to buy second property in Singapore? Or even the third property? As a PR or Singaporean, you will be subjected to additional buyer stamp duty tax for your second and more property. You will also require more cash if you still have outstanding loan. Lastly, you need to set aside CPF minimum retirement sum which means you need to top up by cash if your CPF is insufficient.

So how much do you need to invest in good property near MRT in Singapore such as Park Place Residences in Paya Lebar, Atra condo in Redhill or other condo in Singapore?

Restriction For PR

If you own HDB flat and both owners are Singapore PR. Under the current policy if you intend to buy second property in Singapore, you must sell your HDB flat within 6 months upon acquiring your Singapore private property. This is actually does not help you in achieving your financial plan at all and it may cause heavier loan burden as the price of private property is much higher than your HDB flat. So what is your option? We will look through at the calculation of buying second or even third property in Singapore and see how much is the cash needed and see if is a wise investment decision.

Below is the table for stamp duty tax and min cash required

 

Total Stamp Duty Tax

Min Cash Required

SC (2nd property)

10% less SGD 5,400

25% (if still have existing loan)

SC (3rd property and more)

13% less SGD 5,400

25% (if still have existing loan)

SPR (2nd property and more)

13% less SGD 5,400

25% (if still have existing loan)

Buy second property in Singapore

Assuming price for 1 bedroom is SGD 750,000

Minimum cash required 25% if have existing loan: SGD 187,500

Assuming you have sufficient CPF for the remaining 25% down payment in your Ordinary Account (after reserving SGD 83,000 CPF basic retirement sum for year 2017)

Total stamp duty tax 10% of property price less SGD 5,400: SGD 69,600

Total cash required: SGD 257,100

50% loan with 30 years tenure and average 1.7% interest rate, monthly instalment: SGD 1,335

Assuming average rental 3%: SGD 1,875

Positive cash: SGD 540 per month before tax and monthly maintenance fee

Buy third property in Singapore

Assuming price for 2 bedroom is SGD 1,000,000

Minimum cash required 25% if have existing loan: SGD 250,000

Assuming you have sufficient CPF for the remaining 25% down payment in your Ordinary Account (after reserving SGD 83,000 CPF basic retirement sum for year 2017)

Total stamp duty tax 13% of property price less SGD 5,400: SGD 124,600

Total cash required: SGD 374,600

50% loan with 30 years tenure and average 1.7% interest rate, monthly instalment: SGD 1,775

Assuming average rental 3%: SGD 2,500

Positive cash: SGD 725 per month before tax and monthly maintenance fee

Depending on your circumstances, you may be able to save the cost on stamp duty tax through partial purchase. You can click our article on decoupling of property to find out more.

Contact us if you have any further queries





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