In Singapore’s property market landscape, two key types of stamp duties play a pivotal role: the Buyer’s Stamp Duty (BSD) and the Additional Buyer’s Stamp Duty (ABSD). While BSD is a standard tax imposed on all property purchases in Singapore, ABSD is an additional tax that applies under specific circumstances. ABSD was introduced as a regulatory measure to manage the residential property market, targeting speculative buying and the accumulation of multiple properties. This guide focuses on demystifying ABSD, detailing its rates, applicability, and impact on various buyer categories, distinct from the general BSD obligations. Understanding the nuances of ABSD is crucial for anyone navigating the property market in Singapore, whether for personal use or investment purposes.

Who Pays Additional Buyer’s Stamp Duty (ABSD)?

Additional Buyer’s Stamp Duty (ABSD) applies to individuals and entities, including foreign investors and housing developers. The rate depends on the buyer’s residency status and property count.

1st Property
2nd Property
3rd Property
Singapore Citizens (SC)
0%
20%
30%
Singapore PRs (SPR)
5%
30%
35%
Foreigners
60%
60%
60%
Entities (including companies)
65%
65%
65%
Housing Developers
35% (plus additional 5% non-refundable)
35% (plus additional 5% non-refundable)
35% (plus additional 5% non-refundable)

Note:

  • The rates are based on the residency status of the buyer and the number of residential properties they own.
  • The highest applicable Additional Buyer’s Stamp Duty (ABSD) rate among the buyers will apply for joint purchases.
  • Special conditions may apply for remissions and exemptions in certain scenarios, such as married couples.

Additional Buyer’s Stamp Duty (ABSD) Calculation Examples

Example 1: A Singapore Citizen buying their second property at $1 million would pay 20% ABSD, amounting to $200,000

Example 2: A Foreigner purchasing a property at $2 million would incur 60% ABSD, totalling $1.2 million.

Example 3: An SPR buying their first property valued at $800,000 would pay 5% ABSD, which is $40,000.

When is ABSD Payable?

ABSD is payable within 14 days after signing the Sales and Purchase Agreement (S&P) if the document is signed in Singapore. If the S&P is signed overseas, it is payable within 30 days after receiving the document in Singapore.

Timeline for ABSD Remission on Buying and Selling Property

For individuals who are selling their existing property and buying a new one:

  • Singapore Citizens: Eligible for ABSD remission if they sell their existing property within six months after the date of purchase or TOP (Temporary Occupation Permit) date of the new property, whichever is later.
  • Singapore Permanent Residents and Foreigners: There is no ABSD remission for SPRs and foreigners in this scenario.

ABSD Remission and Exemptions

  1. Married Couples (SC and SPR or SC and SC):
    • Eligible for remission on a second property, subject to conditions like selling their first property within a specified timeframe.
  2. Newly Married Couples:
    • Joint property purchases may qualify for ABSD remission under certain conditions.
  3. Properties Held in Trust:
    • A high ABSD rate applies, but remission is possible under specific conditions.
  4. Joint Purchases:
    • In mixed-status purchases, the higher ABSD rate applies.

Special Considerations

  • Refinancing: Refinancing property loans does not attract ABSD.
  • Developers: Housing developers face a unique ABSD rate structure.

ABSD and Property Investment

ABSD is a major cost factor for property investments, especially for foreign investors and those owning multiple properties. It’s crucial for effective financial planning in property investments.

Why Additional Buyer Stamp Duty (ABSD) Matters

ABSD helps maintain a balanced property market in Singapore, preventing property bubbles and ensuring market sustainability.

Navigating ABSD in Property Transactions

Prospective buyers should consider ABSD implications early in their decision-making process. Consulting property experts, Inland Revenue Authority of Singapore (IRAS) or financial advisors is advisable to clarify ABSD liabilities and remission opportunities.

Conclusion

Additional Buyer’s Stamp Duty (ABSD) is a pivotal aspect of Singapore’s property landscape, affecting buying decisions and investment strategies. Understanding its rates, calculation methods, and remission rules is crucial for anyone involved in property transactions in Singapore. This guide provides a good understanding of ABSD, equipping readers with the knowledge needed for informed property ownership and investment in Singapore.

Frequently Asked Questions (FAQs)

General Understanding of Additional Buyer's Stamp Duty (ABSD)

  1. What is Additional Buyer’s Stamp Duty (ABSD)?
    • ABSD is a tax imposed on the purchase of residential properties in Singapore to regulate the property market by discouraging speculative buying and multiple property ownership.
  2. Who needs to pay ABSD, and who is exempt?
    • ABSD applies to Singapore Citizens, Permanent Residents, foreigners, and entities buying residential properties. Exemptions or remissions are available under specific conditions, such as for certain married couples.
  3. How are the ABSD rates determined?
    • ABSD rates are based on the buyer’s residency status (SC, SPR, foreigner) and the number of residential properties they own.

    ABSD Rates and Calculations

    1. What are the current ABSD rates for different buyer categories?
      • Singapore Citizens pay 0% for the first property, 20% for the second, and 30% for the third; Permanent Residents pay 5% for the first property, then 30% and 35%; Foreigners and entities pay 60% and 65%, respectively, for any property.
    2. How is ABSD calculated?
      • ABSD is calculated based on the the purchase price or the market value of the property, whichever higher.
    3. Can ABSD be included in the loan amount for the property purchase?
      • ABSD cannot be included in the home loan amount. It must be paid separately and upfront, usually in cash or from CPF savings.

    ABSD Applicability and Specific Scenarios

    1. Is ABSD applicable to commercial properties?
      • No, ABSD is only applicable to residential properties in Singapore.
    2. If I receive a property as a gift, do I need to pay ABSD?
      • Yes, ABSD is applicable on properties acquired through gifts if the recipient already owns other residential properties or if the recipient is a foreigner or an entity.
    3. How does ABSD affect the inheritance of property?
      • Inheritance of property does not typically attract ABSD. However, if the beneficiary decides to purchase additional properties while owning the inherited property, ABSD rates will apply accordingly.
    4. Does ABSD apply to overseas Singaporeans?
      • Yes, Singapore Citizens living abroad are subject to the same ABSD rates as those residing in Singapore.
    5. If I demolish and rebuild my property, will ABSD be applicable?
      • ABSD is not applicable if you are rebuilding a property you already own. However, if you purchase an additional property during the rebuild, ABSD may apply.
    6. Is ABSD applicable if I buy a property jointly with my child who is a minor?
      • Yes, ABSD applies to joint purchases with minors. The rate depends on the residency status and property count of the parent or guardian.
    7. How does ABSD affect divorced couples buying properties separately?
      • Divorced individuals are treated as separate entities for ABSD purposes. If either party buys a new property post-divorce, ABSD will be calculated based on their individual property count.
    8. Is there a difference in ABSD for new launch properties versus resale properties?
      • ABSD is applied uniformly to both new launch and resale properties. The type of property does not affect the ABSD rate.

    ABSD Payment and Remission

    1. When is ABSD payable?
      • ABSD is payable within 14 days after signing the Sales and Purchase Agreement if the agreement is signed in Singapore, or within 30 days if signed overseas.
    2. Can ABSD be paid in installments?
      • No, ABSD must be paid in full by the due date.
    3. What happens if I fail to pay ABSD on time?
      • Late payment of ABSD attracts a penalty.
    4. Can ABSD be waived or remitted?
      • ABSD can be remitted in certain scenarios, such as for married couples comprising a Singapore Citizen and a Permanent Resident buying their first home together.
    5. Can ABSD be refunded if I decide to sell the property shortly after purchasing it?
      • ABSD is generally not refundable. However, certain exceptions exist, such as for married couples who meet specific criteria.

    Special Cases and Exemptions

    1. What if I am a foreigner married to a Singapore Citizen? Do I still need to pay ABSD?
      • Yes, foreigners married to Singapore Citizens are still liable to pay ABSD, but they may qualify for remission under certain conditions.
    2. Are there any special ABSD rules for joint property purchases?
      • If the buyers have different residency statuses in joint purchases, the higher ABSD rate applies.
    3. Are there any concessions for ABSD in light of financial hardship or special circumstances?
      • There are no standard concessions for financial hardship. ABSD is a regulatory measure and is applied uniformly based on the set criteria.
    4. If I change my residency status after purchasing a property, will my ABSD rate be adjusted?
      • ABSD is calculated based on your status at the time of purchase. Changes in residency status after the purchase do not affect the ABSD rate paid.
    5. Are there any implications for Permanent Residents (PRs) who become Singapore Citizens?
      • PRs who become Singapore Citizens may apply for a refund of the ABSD paid on their first property, subject to meeting certain conditions.

    Legal and Regulatory Aspects

    1. Can ABSD be appealed or contested?
      • Generally, ABSD rates are fixed and cannot be appealed. However, if there are errors in the application of ABSD or in the calculation, these can be rectified.