Broke even on our Additional Buyer Stamp Duty (ABSD)

It has been close to 4 years since we purchased our second property. You can read more about that here.

We paid the 12% ABSD back then to keep our HDB when we purchased our second property. Close to 4 years later, we are glad to say that we have “broke even” on the ABSD paid.

This mean that the rental income we had received in the last 4 years or so had fully covered the ABSD paid.

We are glad that this day had come way earlier than expected. Back then, we had forecasted that it will take around 5 to 6 years for us to break even. Thankfully the increase in our HDB rental price over the last few years had shorten this duration for us.

On top of that, the price of our HDB had also increased. This capital appreciation is an added bonus if we eventually decided to let go of the HDB.

Looking back, we are glad that we had made the decision to purchase our 2^nd property, kept our HDB and paid the 12% ABSD back then. So far the property market had been kind to us and we had not had to experience long periods of no rental income. So far, we had only encountered 1 month where there is no rental income for us which is really good for me.

However, we are sure it’s not going to be all sunshine and rainbows for Singapore’s property market in the future. We can see that the rental market as well as the property market softening in Singapore in the near future. Recently, it is more of a tenant’s market now and it’s getting increasing difficult to get tenants for the same rent.

Financially, we are still prepared for the worst. We have our CPF OA ready to supplement our mortgage payment if we encounter any unforeseen circumstances. Hopefully we don’t have to activate our contingency plan but if we do, it is there.

Thanks for reading and Happy Investing!

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