New Property Highlight: SAVE 12% ABSD
With the new measure of higher ABSD (12%) set in when you purchase a second residential property from 6 July 2018 onwards, many people are discouraged from investing in property. Because it's an additional tax amount of 5% on top of the already high 7%.
Source: Fact sheet on the adjusted ABSD rates, www.iras.gov.sg
To put it in perspective, a 3-bedder new condo at $1.2 mil can easily incur the following additional amount:
4% BSD (Buyer's Stamp Duty) = $32,600
12% ABSD (Additional Buyer's Stamp Duty) = $144,000
In order to buy a second residential property, you have to pay an additional cost of $144,000, on top of $32,600. This large amount of $144,000 is easily WHAT YOU NEED to purchase a 1-bedder condo (under normal mortgage loan)!!!
However, there are ways to purchase a second residential property without incurring this hefty sum of ABSD:
1) If you intend to buy a HDB, EC or private condo as your FIRST residential property purchase, you can make the RIGHT approach in view of planning for a second residential property purchase without incurring 12% ABSD.
2) If you already own a HDB, EC or private condo, it is still possible to purchase a second residential property without incurring 12% ABSD.
In fact, depending on your situation, there are at least FIVE different ways to plan for a second residential property purchase WITHOUT the need to incur ABSD. Personally, I will be applying one of them in the near future as my property has not reached MOP (Minimum Occupation Period).
We can leverage on asset progression in this nation where the cost of living will only go HIGHER. Our average income cannot overcome inflation & "progressive taxes" (Finance Minister Heng on progressive tax, Budget 2018).
Instead of working to pay your home, why not let your home pay you?
Stay tuned for more property tips and market updates at www.facebook.com/sghomeaffairs