In Singapore, there are two types of stamp duties imposed on the buyer; one is called Additional Buyer’s Stamp Duty (ABSD), and the other one is Buyer’s Stamp Duty (BSD).
Basically, Stamp Duty is a tax on documents related to the purchases and leases of properties (e.g. Sales & Purchase Agreements, Tenancy Agreements etc.). All types of stamp duties in Singapore are to be paid to the Inland Revenue Authority of Singapore (IRAS).
All property buyers have to pay BSD in Singapore. On the other hand, ABSD applies on top of BSD payable on the purchase of immovable residential properties in Singapore.
When you buy a property in Singapore, you’re subjected to Buyer’s Stamp Duty (BSD).
In the simplest of terms, ABSD is a government tax typically charged on the purchase of a second and subsequent residential property.
These include HDB flats, residential shop-houses (ABSD not applicable on commercial shop-houses), condos and landed properties. However, ABSD is charged depending on the buyer’s residential status.
ABSD is a cooling measure implemented by the government to keep property prices affordable for Singapore citizens by managing the demand for residential properties. It also aims to discourage foreigners and other entities from purchasing residential properties and multiple residential properties.
ABSD was introduced back in December 2011 by the government, which aims to moderate demand for residential property, thereby ensuring that residential property remains affordable for Singaporeans and that prices move in tandem with economic fundamentals.
The ABSD rates were last revised on 6 July 2018 to stabilize the residential property market and avert the risk of a more drastic price correction in the future, which could have a destabilizing effect on the economy.
ABSD applies to the following group of property buyers:
ABSD will be levied on the second (12%) and subsequent (15%) property purchases.
ABSD will be levied on all purchases. The first purchase will be 5% while the second and subsequent purchases will be 15%.
20% ABSD for any property purchase.
25% for each property
If you’re Singaporean, married, and buying your first property to stay in, you can apply to have your ABSD refunded even if your spouse is a permanent resident or foreigner.
For example, a Singaporean husband and a foreigner wife jointly purchase their first residential property to be used as their matrimonial home. They would first have to pay 15% ABSD (based on the status of the foreigner wife). They can then apply for remission for ABSD.
Thanks to the Free Trade Agreement, nationals and permanent residents (it is to be mentioned that only nationals of the United States are given the same treatment as Singaporeans, permanent residents are not included) from these countries would be given the same treatment as Singaporeans when purchasing a property.
If you buy another property as a married couple to stay in and sell your first property within 6 months, you can apply for ABSD remission. If the property purchased is uncompleted, you can apply for ABSD remission as long as your first property is sold within 6 months from the date of issue of Temporary Occupation Permit (TOP) / Certificate of Statutory Compliance (CSC). You must not have bought any other residential property after purchasing the second one.
If you are buying residential land and developing four or fewer residential units, you can also apply for ABSD remission.
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BSD is tax paid on documents signed when you buy or acquire property located in Singapore.
The property buyer is liable to pay the Buyer’s Stamp Duty (BSD). Examples of property acquisition in which stamp duty is payable are given below:
Declaration of Trust / Trust Deed:
BSD is computed based on the purchase price or market value of the property, whichever is higher.
Prior to 20 Feb 2018, the BSD rate was up to 3%. With effect from 20 Feb 2018, there are differentiated BSD rates between residential and non-residential properties. The BSD rate for acquisition of residential properties on or after 20 Feb 2018 is up to 4%.
The BSD rates before and after the 2018 Budget changes are as follows:
Before 20 Feb 2018:
|Purchase Price or Market Value of the Property||BSD Rates|
On or after 20 Feb 2018:
|Purchase Price or Market Value of the Property||BSD Rates for residential properties||BSD Rates for non-residential properties|
BSD is rounded down to the nearest dollar, subject to a minimum duty of $1.
As you can see, the more expensive your property, the higher the overall BSD rate you’ll be obliged to pay.
There are some instances where BSD won’t be applicable:
If your property purchase falls under any of these categories, you can write to the Inland Revenue Authority of Singapore (IRAS) within 14 days of acquiring the property.
You will need to send in a:
If the transaction happens overseas, the BSD will need to be paid within 30 days of the documents being received in Singapore. You can’t pay for the BSD in instalments, so you’ll need to make sure you have enough to cover the full amount.
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