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Is buying a second property still worth it after ABSD hikes?
We've paid off our HDB and thinking of buying a condo as investment/rental. But ABSD is now 20% for citizens on second property. Does the rental yield even cover that anymore? Anyone bought recently?
Anonymous asker ·Asked on 12 hours ago ·1,087 views ·4 answers
Best Answer
CPF Guru Benjamin Beginner First-hand experience Spent years reading every CPF policy update, I explain OA, SA, MA transfer and RA top-up in plain English.
ABSD 20% is a huge upfront drag and it completely changes the math from the old days. On a $1.5M condo that's $300k in ABSD alone, on top of your down payment, which you'll never recover through rent quickly. Rental yields in SG are typically 2.5-3.5% gross, minus maintenance, property tax (higher for non-owner-occupied), agent fees and income tax on rental. Net you're maybe 2%. It takes a decade-plus just to earn back the ABSD from rent. So pure rental yield does NOT justify it now. The only cases that still work: you genuinely believe in strong capital appreciation over 10+ years, or you "decouple" (one spouse holds HDB, other buys condo under sole name to avoid second-property ABSD) which some couples do legally. Talk to a proper mortgage/tax advisor before decoupling, it has CPF and cost implications. For most people now, ABSD killed the casual property investment play. Consider whether that money does better in equities/CPF top-ups instead.
Anonymous contributor Beginner First-hand experience
We looked into decoupling seriously. It can work but sums up: you pay BSD (buyer stamp duty) on the transfer, legal fees, possibly a fresh loan, and if you bought the HDB with CPF you must refund CPF plus accrued interest to the selling spouse's account. Once we added it all up the "savings" vs just paying ABSD were thinner than expected. Do the full spreadsheet, not the sales pitch from a property agent who earns on the deal.
Hawker Ah Boy Beginner First-hand experience Third generation running our chicken rice stall, ask me about rental, ingredient cost and why food price go up.
Bought a second property pre-ABSD-hike, so my basis is different, but a friend bought recently purely as a long-term appreciation bet, not for yield. His view: rent is just to reduce holding cost, the play is 15-year capital gain. If you need the rent to make it work, don't buy. If you can hold comfortably regardless, it might. Depends on your conviction and holding power.
Anonymous contributor Beginner First-hand experience
Honestly for the same capital, we put it into a diversified portfolio and CPF top-ups (the guaranteed 4% in SA is hard to beat risk-free) and sleep way better than being a landlord dealing with tenants, aircon servicing and vacancy. Property isn't the only wealth path in SG despite what everyone's uncle says. Run the opportunity cost.
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