With the release of budget 2023, many of us are anxious and anticipating what are the government measures that will be released - will it help to ease the pressures in the property market? or make it easier for first-time owners to secure a property of their own? In this article, we take a deep dive into how the Budget 2023 will shape the property market.
First-timers: increased chance of securing your keys
Indeed, first-timers are receiving good news - they will have a better shot at getting their BTO. With Budget 2023, families that have children or married couples that are 40 years old and under will now get one more chance when they receive their queue number for BTO flats. Coupled with the 2 other chances for first-timers, this adds up to a whopping 3 chances!
Basically, the government has decided to prioritise these two groups to ensure that they are the first ones to get property. More measures will be rolled out in due time, which are all in a bid to help them secure their own nest faster.
This definitely sets in the pressure to settle down and have a kid earlier - after all, having a kid now becomes quite a significant deciding factor in increasing your chance of a successful ballot.
However, the age-old argument still stays: those that have children naturally need more space, and therefore should be prioritised when securing a home. Coupled with the rapidly aging population, it’s not hard to imagine why Budget 2023 has such a shift.
Buying a resale flat becomes easier: increase housing grants
With Budget 2023, first-timers that are buying anything from 2-room to 4-room HDB flats can now get a CPF Housing Grant that goes up to $80,000. This is a significant increase compared to the previous cap of $50,000.
For those aiming for 5-room flats or larger ones (e.g. your EA or EMs) then the grant is now up to $50,000 instead of the original $40,000.
Doing the calculations mean that if you are able to maximize the possible grant for first-timers, it can add up to approximately $190,000 when considering resale flats.
This extends to first-timer singles too. First-time singles that are looking to buy a 4-room or smaller resale flat can now enjoy a higher CPF housing grant as well, from $25,000 to $40,000. Those getting 5-room or larger resale flats can now receive $25,000 instead of the original $20,000 previously.
Singles will probably feel more relieved with this decision, since they have long been going for the resale flats in the market. For the longest time, it has been difficult for singles to secure their home since they can only receive 2-room flats if they BTO. Most of them turn to resale flats and find it extra difficult to secure a unit without a partner to shoulder the finances with.
The good and then the bad: Higher stamp duty rates on private properties
For any property with value over $1.5 million, brace yourself - there will be an increase in buyer’s stamp duty (BSD).
Property values above $1.5 million and up to $3 million will now be taxed at 5.00%, a 1.00% increase from the original 4.00%.
Any private property valued higher than $3 million will be taxed at 6.00%.
Based on the price ranges, those that will be hit are most likely the resale condo units with 3-room or more. For those in central areas, even 2-room condo units may be affected as well.
However, given that most of the private properties will be hit by this new property measure, it’s unlikely that one can “choose one over the other”. Most of the interested buyers will still bite the bullet and proceed with their purchases anyway.
That pretty much sums up the changes that you can expect from Budget 2023. Have any more questions or require advice? Reach out immediately to know the most up-to-date property information, and how you can re-strategise your asset progression journey to make the best out of the resources you have.