LTV and ABSD for Investment Property Guide: Homejourney's Essential Insights
For Singapore investors buying a second or subsequent property, the maximum Loan-to-Value (LTV) limit is 45% for bank loans, while Additional Buyer's Stamp Duty (ABSD) starts at 20% for Singapore Citizens. These rules from MAS and IRAS demand substantial upfront cash or CPF, often 55%+ of the purchase price plus taxes.[1][2][3]
This cluster article dives deep into LTV and ABSD specifics for investment properties, helping you calculate true costs and optimize financing. It connects to Homejourney's pillar on Property Investment Financing Complete Guide Singapore for full strategies on multiple property financing and portfolio building.
What is LTV and Why It Limits Investment Property Loans
Loan-to-Value (LTV) is the ratio of your bank loan to the property's purchase price or valuation (whichever is higher). For investment properties—treated as second or subsequent homes—MAS caps LTV at 45% for the second property, dropping to 35% for third and beyond.[1][2][6]
First-time buyers enjoy 75% LTV, but investors face stricter limits to prevent speculation. HDB loans are even tighter at 25% for second properties.[1] This means for a $1.5 million condo in Tanjong Pagar (e.g., near MRT Exit A, 2-min walk), you'd secure a max $675,000 loan, needing $825,000 cash/CPF downpayment.[1]
Real example: A Singaporean investor with an existing HDB flat buying a $1.2M resale condo in Bedok as an investment pays 55% down ($660,000: 5% cash + 50% CPF/cash) under LTV rules.[1][2] Homejourney's mortgage calculator at https://www.homejourney.sg/bank-rates#calculator verifies your eligibility instantly via Singpass.
Current ABSD Rates for Singapore Investment Properties (2026)
ABSD is a cooling measure tax on top of Buyer's Stamp Duty (BSD), based on buyer profile and property count. Rates, last updated April 2023, remain: Singapore Citizens 20% on second property, 30% on third+; PRs 5%/30%; Foreigners 60%; Entities 65%.[1][3][5]
| Buyer Profile | 2nd Property | 3rd+ Property |
|---|---|---|
| Singapore Citizen | 20% | 30% |
| PR | 30% | 30% |
| Foreigner | 60% | 60% |
| Entity | 65% | 65% |
Example: $1.2M investment condo as second property for a Citizen = $240,000 ABSD + ~$30,000 BSD = $270,000 total duties.[1][3] Insider tip: For resale HDB investments, pay ABSD in cash via lawyer first, then refund from CPF within 14 days—new launches allow CPF upfront.[1]
Verify rates on IRAS portal; Homejourney ensures transparency for safe decisions.[5]
Combining LTV and ABSD: Step-by-Step Calculation for Investors
Investment buys require cash for 5% LTV downpayment + ABSD (often cash) + BSD. Banks then apply TDSR (55% max debt-to-income).[1][2]
- Purchase price: $1M second condo.
- LTV downpayment: 55% ($550K: 5% cash $50K + 50% CPF/cash $500K).
- ABSD: 20% ($200K cash or CPF post-resale).
- BSD: ~$23K.
- Total upfront: ~$773K. Loan: $450K (45% LTV).
Use Homejourney's bank rates page at https://www.homejourney.sg/bank-rates to compare DBS, OCBC, UOB, HSBC offers under these limits.
Optimization Strategies for Multiple Property Financing
Build your property empire wisely:
- Joint purchase: With spouse (no prior property) = 0% ABSD, but LTV still 45%.[1]
- Sell first: Reset to first-timer 75% LTV/0% ABSD.[2]
- Commercial pivot: Shophouses avoid ABSD, up to 60-80% LTV.[1]
- Refinance portfolio: Check rates via Homejourney for several properties loans.Financing Multiple Investment Properties Singapore: Homejourney's Complete Guide...
Track financing with our tools; link to Best Bank Loans for Property Investors for portfolio tips.
FAQ: LTV and ABSD for Investment Properties
1. Can I use CPF for ABSD on investment properties?
Yes, upfront for new properties; resale needs initial cash then CPF refund within 14 days via IRAS.[1]
2. Max LTV for third investment property?
35% for bank loans; assess TDSR impact.[1][6]
3. Does ABSD apply to HDB investments?
Yes, same rates as private; resale rules differ slightly.[1][5]
4. How does TDSR affect my LTV for multiple properties?
TDSR caps total debt at 55% income; lowers effective loan even at 45% LTV.[2]
5. Best banks for investment property loans?
Compare DBS, OCBC, UOB, HSBC on Homejourney—apply multi-bank via Singpass for fastest approvals.
Disclaimer: Rules per MAS/IRAS 2026; consult professionals. Homejourney provides tools for informed decisions, prioritizing your safety.
Ready for your investment? Compare rates from DBS, OCBC, UOB and more at https://www.homejourney.sg/bank-rates, calculate eligibility, and apply securely. Search properties at https://www.homejourney.sg/search. Return to our Property Investment Financing pillar for full LTV and ABSD for Investment Property Guide.
