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Want to invest in additional property but put off by ABSD?

Want to invest in additional property but put off by ABSD?

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As a Singaporean, you have to pay 7% ABSD (Additional Buyer's Stamp Duty) for the purchase of your 2nd property and 10% for the 3rd and subsequent property. For PR, it is 10% for 2nd property and subsequent property.

For simple calculation, let's use a ball park figure of $800K for a condo in Singapore. If you are a Singapore Citizen, the ABSD amount is $56K for a second property and you have to pay it in cash. 

For second property, the minimum upfront cash payment for the downpayment is 25% as regulated by Monentary Authority of Singapore (MAS), which is $200K for a $800K property. 
Thus, the amount of cash you need to pay upfront just for ABSD and downpayment is $256K! (S$56K + S$200K)

In addition, if you take a bank loan in Singapore, you are subjected to the regulation of TDSR (Total Debt Servicing Ratio) as imposed by MAS.
Under TDSR, your total loans including current monthly home loan payment and other loans such as car loan and personal loans cannot exceed 60% of your gross monthly income. 

With this cash amount of $256K, you can buy many overseas properties in many countries! Why do I say many overseas properties?
This is because for property, we can leverage on bank loans and buy a property by paying only the downpayment. 
For overseas property, you can take a bank loan from banks outside Singapore and you are not subjected to TDSR.

Click to find out more about investing in an overseas property in a developed country! 
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