The Ultimate Guide to Buyer's Stamp Duty & Additional Buyer's Stamp Duty in Singapore (2020)
You know how no matter what we buy in Singapore, we’re always taxed in some form or another?
The residential property that you’re buying is no exception.
And it comes in the form of a Buyer’s Stamp Duty (BSD).
If you are a foreigner or if you’re looking to buy another residential property (because you can and want to).
You’ll need to pay Additional Buyer’s Stamp Duty (ABSD).
What’s the diff and how much exactly do you need to pay?
Let’s find out!
What is Buyer’s Stamp Duty?
As long as you are buying property located in Singapore, you will need to pay BSD.
The amount of Buyer Stamp Duty you will need to pay is computed based on the purchase price of the property or the market value of the property (whichever is higher).
Before 20 February 2018, the maximum percentage of BSD you will have to pay on all properties was up to 3 per cent.
Since then there were two main changes implemented:
- There are now differentiated BSD rates on residential and non-residential properties (here is how to differentiate between them).
- The BSD rate for residential properties went up; the maximum percentage of BSD you will have to pay on residential properties is now up to 4 per cent
How Much Buyer’s Stamp Duty Do I Need to Pay?
|Purchase Price or Market Value of the Property||BSD Rates for Residential Properties||BSD Rates for Non-Residential Properties|
Let’s say you were to purchase a property that costs $1.5 million at market value.
|Market Value of the Property||BSD Rate||Calculation|
|First $180,000||1%||= $1,800 (1% x $180,000)|
|Next $180,000||2%||= $3,600 (2% x $180,000)|
|Next $640,000||3%||= $19,200 (3% x $640,000)|
|Remaining $500,000||4%||= $20,000 (4% x $1,500,550)|
|BSD Payable (rounded down to the nearest dollar)||= $44,600 ($1,800 + $3,600 + $19,200 + $20,000)|
Or just use the Stamp Duty Calculator from the Inland Revenue Authority of Singapore (IRAS) website to calculate this instead.
What is Additional Buyer’s Stamp Duty?
You’ll need to pay Additional Buyer’s Stamp Duty (ABSD) on top of BSD if you’re a:
- Singapore Citizen (SC) who is buying his/her’s second residential property and all subsequent property purchases
- Singapore Permanent Resident (SPR) will need to pay ABSD on all residential properties with a lower rate for first property purchase
- Foreigners will need to pay a flat ABSD on all property purchases
- Entities will need to pay ABSD at an almost uniform rate
This is basically an add on to BSD that is tagged to all purchases of residential properties in Singapore.
Why is there a need for ABSD?
It’s basically a means to cool property prices as it discourages demand driven by high-SES Singapore citizens, foreigners, and entities who were buying up multiple properties.
And engaging in property speculation.
That’s not great for people who are actually looking for a place to stay.
In particular, it helps to keep residential properties affordable.
Especially for Singapore Citizens looking to buy their first residential property.
What Types of Properties are Considered a Residential Property Under ABSD?
- HDB Flats
- HDB void deck shops with residential floor
- Executive Condominiums (EC)
- Terrace Houses
- Shophouses with living quarters
How Much Additional Buyer’s Stamp Duty Do I Need to Pay?
The amount of ABSD you will need to pay is based on your residency status and your nationality at the point of making the property purchase.
This is reflected on the date of issue reflected in the IC collection slip.
It is also dependent on whether the buyer is an individual or entity.
Entities are defined as the following:
- An unincorporated association
- A trustee for a collective investment scheme when acting in that capacity
- A trustee-manager for a business trust when acting in that capacity
- The partners of the partnership whether or not any of them is an individual, where the property conveyed, transferred or assigned is to be held as partnership property
*As entities, developers will also be subject to the ABSD rate of 25 per cent. Developers may apply for remission of this 25 per cent ABSD, subject to approval.
The ABSD percentages shown below will be applicable to the property’s market value or purchase price (whichever is higher).
Another thing to note is that so long as a buyer owns any interest in a property, that property will be included in the number of properties owned by him.
Let’s say a person were to jointly own a residential property with their partner and own 30 per cent share of another property with his/her sibling.
IRAS considers that as the person owning two properties.
|Profile of Buyer||ABSD Rates on/ after 6 Jul 2018|
|Singapore Citizens (SC) buying first residential property||Not applicable|
|SC buying second residential property||12%|
|SC buying third and subsequent residential property||15%|
|Singapore Permanent Residents (SPR) buying first residential property||5%|
|SPR buying second and subsequent residential property||15%|
|Foreigners (FR) buying any residential property||20%|
|Entities buying any residential property||25%
[Plus Additional 5% for Housing Developers (Non Remittable)]
*ABSD is rounded down to the nearest dollar, subject to a minimum duty of $1.
ABSD for Those Buying Multiple Properties
If you were to buy multiple properties at one time, IRAS considers it as you are buying multiple properties and will have to pay ABSD accordingly.
However, you can choose which property to pay ABSD on when if you were a Singapore Citizen buying two properties for the first time. In this scenario, you can choose to only pay ABSD for either one of the properties.
ABSD for Property Bought With Someone Else
If a property is bought jointly bought by people of different profiles, the profile with the highest ABSD rate will be used.
For example, let’s say you wanted to buy a property with your partner. Your partner owns a property but you do not.
Thus the amount of ABSD you need to pay is the ABSD rate on the purchase of second property at 12 per cent instead of the first time buyer rate of no ABSD.
ABSD for Property Bought for Beneficial Owner
If you (A) are buying a residential property to be held on trust for the beneficial owner (B), the ABSD rate will be charged based on the profile of the beneficial owner (B).
For example, If the beneficial owner (B) owns no residential property, no ABSD is payable.
Is It Possible to Not Pay the Additional Buyer’s Stamp Duty?
There are a few situations where you will not need to pay ABSD.
When you are already contracted to sell your current residential property before you sign the Option to Purchase for your new one.
IRAS considers that you only have ownership of only one residential property, so you’re exempted.
When you are selling your private property and buying an HDB resale flat.
You are also exempted from ABSD.
ABSD Remission For Married Couples
In general, foreigners and Permanent Residents are required to pay ABSD.
However, if you are married to a Singaporean and you do not own any residential property, you are not required to pay ABSD.
In addition, you can get a refund on your ABSD if you move house as a married couple.
To obtain the refund, the property that you paid ABSD for needs to be sold within 6 months of purchasing the next property.