Buyer Stamp Duty (BSD) is payable for all real estate purchases whether residential or otherwise. The current BSD rate is up to 4% of the purchase price* for residential properties and up to 3% for non-residential properties.
Additional Buyer Stamp Duty (ABSD) was introduced as part of cooling measures and is paid together with the BSD. ABSD, which can range from 5% to as much as 35% of the purchase price*, is based on the profile of the purchaser, i.e. nationality ** and whether the purchaser owns any residential property in Singapore. Both BSD and ABSD are payable within 14 days of the date of purchase or acquisition of the property, i.e. exercise of the Option to Purchase, signing of the Sale & Purchase Agreement, or the date of transfer. Refer to IRAS website for more information.
*Purchase price or valuation, whichever is higher.
**Under Free Trade Agreements, Nationals and Permanent Residents of Iceland, Liechtenstein, Norway or Switzerland and Nationals of the United States of America will be treated as Singapore Citizens for this purpose.
Liability and calculation of ABSD
Where there is more than 1 purchaser, ABSD is calculated based on the highest applicable rate, e.g. a PR-FR couple purchasing their first property will be subject to ABSD of 30%.
ABSD is calculated based on the full purchase price, not according to your share in the property purchased, e.g. if you are liable to pay ABSD, it is calculated on the full purchase price even if your share is only 1% and your co-buyer’s share is 99%.
In addition, as long as you own any interest in a residential property, that property will be included in the count of properties owned by you. E.g. If you own just 1% of a property with your siblings and decide to buy another property, ABSD will be payable.
However, there are certain situations where ABSD or even BSD may be remitted or is not applicable. Property purchasers should take note of any remissions that are applicable to their situation.
Some common Stamp Duty Remissions
This remission is applicable to married couples in two main situations:
(I) SC-PR or SC-PR couples who are married and purchasing their first property jointly
They are eligible for remission of the ABSD at stamping, so that the ABSD does not need to be paid. Note that this remission is not applicable for SC-PR or SC-PR couples that purchase a second property; they are subject to the higher applicable ABSD rate.
(II) Married couple with at least one Singaporean and purchasing their second property jointly
They are eligible for remission of the ABSD if they are able to dispose of the first property within the required timeline (see below), provided they:
i. have already paid the ABSD at the time of buying the second property;
ii. remain married during this time; and
iii. there has been no change of ownership for the second property, i.e. they have not sold the second property.
The remission is effected by way of a refund from IRAS.
The required timeline is 6 months from:
• the date of purchase of the second property for completed property; or
• the issue date of the Temporary Occupation Permit (TOP) / Certificate of Statutory Completion (CSC), whichever is earlier, if the property was uncompleted at the time of purchase.
BSD and/or ABSD may be remitted upon the transfer of the property if this transfer is the result of complying with an Order of Court for the division of matrimonial assets in a divorce, and if the property to be transferred is from one party in the divorce proceedings to another, and/or to any child/children of the marriage.
HDB FLATS AND EXECUTIVE CONDOMINIUMS
Eligibility to purchase HDB flats and EC units is assessed by HDB. Where HDB has granted approval, ABSD is automatically remitted for any Singapore ownership (where at least one of the purchasers is a Singaporean).
TRANSFER OF PROPERTY by way of assent to the beneficiaries in accordance to the WILL, INTESTATE SUCCESSION ACT OR MUSLIM LAW OF INHERITANCE
If you are a beneficiary of a will where property has been willed to you, no stamp duty (BSD and ABSD) is applicable when that property is transferred to you. However, that inherited property will be counted as one of the properties owned by you. If you purchase another property subsequently, the new purchase will be counted as your second (or third) property for the purposes of calculating the ABSD applicable.
TRANSFER OF PROPERTY from TRUSTEE to BENEFICIAL OWNERS where there is no change in the beneficial ownership.
If you are the beneficial owner of trust property, no stamp duty is payable when the property is transferred to you as the legal owner (in addition to your beneficial ownership). This property will be counted as one of the properties owned by you (whether it has been transferred or not) for the purposes of assessing your ABSD liability in subsequent purchases.
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Wai Kong Leong
27 December 2021