Singapore disallows the Interest Absorption Scheme and interest-only housing loans and reinstates the GLS Confirmed List

Announced

14 September 2009

Effective

14 September 2009

Issuing authority

Monetary Authority of Singapore, Ministry of National Development, Ministry of Finance

Category

Macroprudential

Affected market

Uncompleted private residential units bought from developers, and the housing loans that financed them, from 14 September 2009, except in uncompleted projects that had already offered units under the Interest Absorption Scheme before that date. The Government Land Sales Programme for the first half of 2010. Developers of Government residential sale sites and Qualifying Certificate holders using the Budget 2009 assistance measures, and owners of land under development receiving the property tax deferral, whose relief was left to expire on 21 January 2010 and 21 January 2011.

Primary source

Measures to Ensure a Stable and Sustainable Property Market

On 14 September 2009 Singapore disallowed the Interest Absorption Scheme and interest-only housing loans with immediate effect for all private residential projects, except uncompleted projects whose units had already been offered for sale under the scheme before that date. Under both, the Government said, a buyer of an uncompleted home made no significant payment beyond an upfront 10% to 20% until completion. The same joint release of MND, MOF, the Ministry of Law and MAS committed to reinstating the Confirmed List in the first-half 2010 Government Land Sales Programme, and said the five Budget 2009 property assistance measures would not be extended when they expired, the first four on 21 January 2010 and the property tax deferral on 21 January 2011. The Government cited 10,017 units sold by developers in the first seven months of 2009 against 4,260 in the whole of 2008. No loan-to-value limit and no stamp duty was changed, and buyers could still use the standard payment scheme.