SINGAPORE: If a citizen can afford a second or third property through the existing Total Debt Servicing Ratio (TDSR) regime, should he also have to pay Additional Buyer’s Stamp Duty (ABSD), Mr Christopher De Souza asked in Parliament on Monday (Jan 25).
The Member of Parliament for Holland-Bukit Timah GRC called for the Government to consider removing ABSD for Singaporeans, while retaining the TDSR for Singaporeans and the ABSD for foreigners.
“By retaining the TDSR, the Singaporean is only going to be allowed a credit line that is within his means. By retaining the ABSD for foreigners, we help ensure that the foreigners will not enter the Singaporean market in an overly speculative way,” he said.
ABSD was first introduced in Dec 2011, and revised upwards in Jan 2013, to rein in escalating residential property prices in Singapore.
Currently, Singapore citizens have to pay an ABSD of 7 per cent on a second property. This increases to 10 per cent for third and subsequent property purchases. ABSD for foreigners is set at 15 per cent for first and subsequent property purchases.
The TDSR is a framework that limits the amount borrowers can spend on debt repayments to 60 per cent of their gross monthly income.