At some juncture, we may seek an upgrade for our residence or require additional space for our children to engage in play and study. There are numerous motivations that drive homeowners to consider purchasing a second property.
However, acquiring a second property without a thorough grasp and diligent research might appear costly and intricate. For many of us, the primary apprehension revolves around financial aspects, ascertaining how we can effectively strategize to ensure that it aligns with our financial capabilities.
In contrast to the 5% cash down payment required for the initial property, a down payment of 25% (cash) of the property’s value is needed for the second property. This down payment can be covered using a mix of cash and CPF funds. Similar to the process for the first property, there are constraints on the amount of CPF you can utilize. It’s important to maintain a Basic Retirement Sum, dependent on your age, before utilizing any surplus to offset housing loans. Moreover, restrictions dictate that you can only tap into savings from your CPF Ordinary Account.
For a detailed breakdown and analysis, The CPF Housing Usage Calculator helps you estimate how much CPF you can use for your property – https://www.cpf.gov.sg/eSvc/Web/Schemes/CpfHousingUsage/Input1
Various conditions have been established for the acquisition of a second property. Despite the allure of potential passive income, the cooling measures outlined could potentially make such a purchase stressful in the long run. Hence, it is crucial to carefully consider these measures before proceeding with the purchase of a second residential property in Singapore.
The true benefit of engaging a real estate agent lies in the considerable convenience they provide and their comprehensive understanding of the market, facilitating a seamless property transaction from purchase or sale to completion. Feel free to contact us for additional consultations or advice regarding any funds and loans inquiries you may have.
