Paper 2 · Property Finance & Financial Calculations · 8 min read
RES Section B, Paper 2: Worked Property and Finance Cases
Must-know for the exam
- BSD, ABSD and SSD run on the higher of price and market value (IRAS); LTV and CPF use run on the lower of price and valuation.
- Cash over valuation is paid in cash only; CPF can be used only up to the valuation.
- MSR caps the housing instalment at 30% of gross monthly income for an HDB flat or an EC within MOP; other debts are not deducted.
- TDSR caps all monthly debts at 55% of gross monthly income (MAS, OTPs from 16 Dec 2021), so car loans count there.
- Banks size residential loans at the 4% medium-term floor rate (MAS, from 30 Sep 2022).
- Residential BSD on $1.5m is $44,600: 1% on $180k, 2% on $180k, 3% on $640k, 4% on $500k (IRAS, from 15 Feb 2023).
- An HDB flat counts for ABSD, so a citizen couple keeping it pays 20% on a second home (IRAS, from 27 Apr 2023).
- SSD for residential bought from 4 Jul 2025 is 16%, 12%, 8%, 4% over four years, payable even on a loss.
- HDB resale proceeds repay the loan first, then CPF used plus accrued interest; at market value a shortfall needs no cash top-up.
- An HDB resale option fee is capped at $1,000, and option plus exercise fees at $5,000.
On this page · 5 sections
Paper 2's case study is usually a transaction from first viewing to completion, with a table of prices, incomes and loans. In practice papers roughly one question in five is a calculation, and several make you choose the right figure from three or four in the case. The skill is the same as in Paper 1 (read the questions, list the parties, draw the timeline, judge each statement alone; see the Paper 1 lesson), plus one more: decide which figure each rule uses before you calculate.
Which figure does the rule use
| Calculation | Base figure | Source and date |
|---|---|---|
| BSD, ABSD, SSD | Higher of price and market value | IRAS: BSD from 15 Feb 2023, ABSD from 27 Apr 2023, SSD for purchases from 4 Jul 2025 |
| Loan-to-value (LTV) and CPF use | Lower of price and valuation | MAS LTV rules (options from 6 Jul 2018); CPF Board, read 1 Oct 2026 |
| Cash over valuation (COV) | Price − valuation, paid in cash only | HDB resale process (price agreed before valuation since Mar 2014) |
| TDSR | 55% of gross monthly income, less all other monthly debts | MAS, OTPs from 16 Dec 2021 |
| MSR (HDB flat, or EC within MOP) | 30% of gross monthly income; other debts are not deducted | MAS MSR and TDSR rules (revised 16 Dec 2021); 30% unchanged since 2013 |
| Loan sizing | Medium-term floor rate 4% (residential bank loans) | MAS, from 30 Sep 2022 |
The trap
Mixing the two bases. Stamp duty runs on the higher figure; the loan and CPF run on the lower. A case that gives a price of $650,000 and a valuation of $640,000 wants $650,000 for BSD and $640,000 for the LTV.
Worked case 1: option, sale and SSD
Worked case study · Section B style
Ms Chua, a Singapore Citizen, bought a condominium unit by exercising an option on 1 Aug 2025. She now sells it at a loss. On 1 Oct 2026 she grants buyer Mr Ho an Option to Purchase at $1,600,000 for a 1% option fee; he exercises it on 15 Oct 2026. Ms Chua's salesperson offers to keep Mr Ho's option-fee cheque in the agency's safe until exercise.
- (i) Ms Chua pays SSD of $192,000, although she sells at a loss
- (ii) Since the cheque is only kept in safe custody, the salesperson may hold it until exercise
- (iii) Had Mr Ho let the option lapse, Ms Chua would keep the $16,000 option fee and could claim nothing more
- (iv) Mr Ho's BSD is due within 14 days of exercising the option, not at completion
- A.(i), (iii) and (iv) only
- B.(ii) and (iv) only
- C.(i) and (ii) only
- D.All of the above
Show answer & explanation
Answer: A. (i), (iii) and (iv) only.(i) True. Holding period: 1 Aug 2025 to 15 Oct 2026 is more than 1 year and up to 2 years. For residential property bought from 4 Jul 2025 the SSD rate in that band is 12%. Working: 12% × $1,600,000 = $192,000. SSD is charged on the price or value, not on profit, so a loss does not remove it.(ii) False. A salesperson must not hold money for a party, option fee included. Reg 7 allows only delivering a crossed cheque drawn in the seller's favour; keeping it in a safe until exercise is holding it.(iii) True. Working: 1% × $1,600,000 = $16,000. If the option lapses unexercised, only the option fee is forfeited and the buyer has no further liability.(iv) True. Stamp duty is due within 14 days of the date of the contract, which for an OTP is the date of exercise.Source: IRAS, Seller's Stamp Duty for residential property (rates for purchases from 4 Jul 2025) and Buyer's Stamp Duty pages, read 1 Oct 2026; Estate Agents (Estate Agency Work) Regulations 2010, reg 7, current at 1 Oct 2026.
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Quick self-check · 5 questions
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Say your answer out loud, then tap to check it.
Which figure does stamp duty use, and which figure do LTV and CPF use?Show answer
Stamp duty (BSD, ABSD, SSD) uses the higher of price and market value. The LTV limit and CPF use run on the lower of price and valuation.
Does the MSR deduct a borrower's car loan?Show answer
No. MSR is 30% of gross monthly income for an HDB flat or an EC within its MOP, and other debts are not deducted. The car loan counts under the 55% TDSR instead.
A couple earning $7,000 and $5,000 a month buy an HDB flat with a bank loan. What is their MSR limit?Show answer
$3,600 a month. Working: 30% × ($7,000 + $5,000) = 30% × $12,000 = $3,600.
HDB flat sold at $600,000; loan outstanding $200,000; CPF used $150,000 plus $25,000 interest. What cash do the sellers receive before fees?Show answer
$225,000. The proceeds repay the loan first, then the CPF used plus accrued interest: $600,000 − $200,000 − ($150,000 + $25,000) = $225,000.
A condo bought on 1 Aug 2025 is sold under an option exercised on 15 Oct 2026 at $1,600,000. What SSD is payable?Show answer
$192,000. The holding period is over 1 year and up to 2 years, so the rate is 12% (purchases from 4 Jul 2025): 12% × $1,600,000. SSD is charged on price or value, not profit, so it applies even at a loss.
Common questions
- Does MSR include car loans?
- No. The mortgage servicing ratio caps only the housing loan instalment, at 30% of gross monthly income, for an HDB flat or an EC within its MOP. Car loans and other debts count under the 55% TDSR instead. Source: MAS, TDSR and MSR rules, revised 16 Dec 2021.
- Is stamp duty calculated on the price or the valuation?
- On the higher of the price and the market value, for BSD, ABSD and SSD alike. The loan-to-value limit and CPF use work the other way, on the lower of price and valuation. Source: IRAS stamp duty pages, read 1 Oct 2026.
- How much calculation is in RES Paper 2 Section B?
- In practice papers, roughly one question in five needs a calculation: stamp duty, SSD, loan limits, MSR and TDSR, sale proceeds after CPF refunds, or rental yield. Many also require choosing the right figure from several in the case.
Related lessons
Exam-style questions on this topic
- RES exam question on Financing: Daniel and Serene, married Singapore Citizens both aged 44, jointly buy a $2,400,000…
- RES exam question on Financing: Mr Salleh, 54, is the only buyer of a resale flat with 39 years of lease remaining
- RES exam question on Financing: Mr Lim, 48, sells his condominium at its market value of $1,500,000
- RES exam question on Financing: Mr Tan, 40, earns a fixed $9,000 a month and his wife, 30, a fixed $3,000
- RES exam question on Financing: monthly debt could each carry under TDSR
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