Singapore Budget 2023: Higher HDB Grants, Stamp Duties, and ARF Rates - How Will They Affect You?

Yen Joon

Yen Joon

Last updated 14 February, 2023

From higher HDB grants for resale flats to higher Buyer's Stamp Duty for luxury properties, here are the housing and tax measures announced in Budget 2023. 

While the government has announced a slew of measures to help defray the cost of living and the GST hike, there are also some new measures introduced for housing and tax.

From higher CPF housing grants for resale flat buyers to higher levies on luxury vehicles, below are the housing and tax measures announced in Budget 2023. 

Higher CPF housing grants for resale flat buyers

Housing affordability has been a hot topic leading up to Budget 2023, with members of the parliament debating on the issue. 

In particular, BTO construction delays caused by the pandemic saw increased demand for resale HDB flats, which pushed prices of resale HDB flats to new highs. 

This prompted the government to roll out new cooling measures in 2022. Despite that, resale HDB flats prices continued their trajectory upwards for the 31st consecutive month in January, and prices also increased by 10.3% in 2022.

To help buyers cope with rising resale flat prices, DPM Lawrance Wong announced that eligible first-timer families and singles buying resale HDB flats will now receive higher CPF housing grants.

Couples or families buying a 4-room or smaller resale HDB flats will get up to S$30,000 more in CPF housing grants, or up to S$80,000.

Meanwhile, those buying 5-room or larger flats will receive an additional S$10,000 in CPF housing grants, up to S$50,000 from S$40,000 previously. 

This means that with the additional grants, eligible first-time buyers can receive up to S$190,000 in CPF housing grants when buying a resale flat, which includes the Proximity Housing Grant (PHG) and Enhanced Housing Grant (EHG).

CPF Housing Grant for first-timer families/couples Grant amount
Family Grant Up to S$80,000
Enhanced CPF Housing Grant (EHG) Up to S$80,000
Proximity Housing Grant (PHG) Up to S$30,000

Single buyers buying a resale flat will also receive more CPF housing grants, but at half of that for families/couples, increasing from S$25,000 to S$40,000. 

This applies to eligible buyers who submit their applications from 3.30pm on 14 Feb 2023 onwards. These grants will be credited into the CPF accounts of eligible buyers in April. 

Additionally, first-timer families with children and married couples aged 40 and below will also get an extra ballot for their BTO flat applications. 

Also read: HDB BTO Feb 2023 Review

Higher Buyer’s Stamp Duty (BSD)

The BSD for luxury residential and non-residential properties will also go up from 15 February onwards. 

Residential properties valued or priced more than S$1.5 million and up to S$3 million will be taxed at 5%, while those over S$3 million will be taxed at 6%, up from 4% previously. 

Similarly, the BSD for non-residential properties will also go up. Non-residential properties valued or priced at S$1 million and up to S$1.5 million will be taxed at 4%, while those more than S$1.5 million will be taxed at 5%, up from 4% previously. 

According to Mr Wong, the new changes are expected to affect 15% of residential properties and 60% of non-residential properties.

The BSD is a tax levied on property buyers buying any property in Singapore. Following Budget 2023, the new BSD rates from 15 February are as follows:

Purchase price or market value of property BSD rate for residential properties BSD rate of non-residential properties
First S$180,000 1% 1%
Next S$180,000 2% 2%
Next S$640,000 3% 3%
Next S$500,000 4% 4%
Next S$1,500,000 5% 5%
Remaining amount 6%  

For example, say you're planning to buy a residential property for S$3 million. Under the new BSD rates, the BSD payable will be:

1% of the first S$180,000 S$1,800
2% of the next S$180,000 S$3,600
3% of the next S$640,000 S$19,200
4% of the next S$500,000 S$20,000
5% of the remaining S$1,500,000 S$75,000
Total BSD  S$119,600

If this sounds confusing, you can use IRAS's BSD calculator

That said, there will be a transitional provision where the old BSD rates will apply to buyers who meet all the conditions below:

- The Option to Purchase (OTP) was granted by sellers to potential buyers on or before 14 February;

- The OTP is exercised on or before 7 March 2023, or within the OTP validity period, whichever is earlier;

- The OTP has not been varied on or after 15 Feb 2023

Higher Additional Registration Fee (ARF) rates for vehicles with higher OMV

In Budget 2022, we saw additional levies on luxury cars. In this year’s Budget, there will be another round of tax increases for buyers of luxury vehicles, with higher ARF rates for vehicles with higher Open Market Value (OMV).

Those buying vehicles with an OMV of more than S$80,000 will need to pay an ARF of 320%, up from 220% currently.

Meanwhile, buyers of vehicles with an OMV of S$40,000 and above will need to pay an ARF rate of 190% of the OMV, up from 180% currently. 

The new changes are set to affect the top one-third of cars by OMV, so those buying a car with an OMV with S$40,000 will not be affected.

The ARF is a tax levied when registering a vehicle and is calculated based on the percentage of the OMV of the vehicle. With the new changes, below are the revised ARF rates:

First S$20,000 of OMV *100% of OMV
Next S$20,000 of OMV (i.e. S$20,001 to S$40,000) *140% of OMV
Next S$20,000 of OMV (i.e. S$40,001 to S$60,000) 190% of OMV
Next S$20,000 of OMV (i.e. S$60,001 to S$80,000) 250% of OMV
Above S$80,000 of OMV (i.e. S$80,001 and above) 320% of OMV

*No change to ARF rates

The government will also cap the preferential ART (PARF) rebates, designed to encourage car and taxi users to deregister their vehicles early, at S$60,000. According to Mr Wong, this avoids providing excessive rebates to luxury cars when they are deregistered. The changes will only affect vehicles with an OMV of more than S$40,000.

The new changes are expected to affect the top one-third of cars by OMV, and cars with an OMV of S$40,000 or less will be unaffected. 

Excise duty for tobacco to go up by 15%

Users of cigarettes, cigars and smokeless tobacco will also need to pay more as the government raises excise duty for all tobacco products by 15% to discourage consumption.

Users will need to pay 49.1 cents for every stick of cigarette or S$491 per kg, up from 42.7 cents or S$427 per kg currently, with the same applying for cigars. Smokeless tobacco products will also be levied 37.8 cents per gram, up from 32.9 cents.

Read these next:
Singapore Budget 2023 - All the CPF-related Changes To Know
Singapore Budget 2023 Live Coverage: Key Highlights
Singapore Budget 2023: Key Impacts Affecting Inflation, Employees, and Businesses
Singapore Budget 2023: GST Vouchers & Household Support Guide


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