JTJB Legal Update January 2014

The Additional Buyer’s Stamp Duty (ABSD) was introduced in Singapore on 7 December 2011 as one of the cooling measures for residential properties. It applies to residential properties and to buyers, according to their profile and the number of residential properties they each own. The table below illustrates the application of the ABSD.

Profile of BuyerBasic Stamp Duty ratesABSD rates (new) from 12 Jan 2013
FR and entities1% on first $180,000
2% on next $180,000
3% on the reminder
SPR buying first property5%
SPR buying second and subsequent property10%
SC buying first propertyNil
SC buying second property7%
SC buying third and subsequent property10%

*FR refers to foreign person
SPR refers to Singapore Permanent Resident
SC refers to Singapore Citizen
The following manner of Property Acquisition/transfer will attract ABSD:
(a) Gift, Release, Settlement
(b) Declaration of Trust where the beneficial interest is the property is vested in the benefecial interest in the property is vested in the beneficiary
(c) Letter of Authority
(d) Exchange
To minimise the payment of ABSD, buyers may do a “De-Coupling”. This essentially mean that where a property is jointly owned by Husband (H) & Wife (W), H withdraws his name from the ownership of the existing property so that he can be free to buy another  residential property in his name without having to pay the ABSD.
And if the next property is the first property to be purchased by H, then, he may also be able to obtain the maximum loan of up to 80% of the valuation of the property to be purchased (One of the other cooling measures introduced was to reduce the loan amount available for subsequent properties).
The only way to do a de-coupling is by way of Transfer of part-share, either through sale or gift. It is advisable to do so by sale to avoid the complications of Bankruptcy Act as all gift transactions done within 5 years before the day on which Bankruptcy application is made may be avoidable.
Contributed By:

Tan Seow Peer

Seow Peer was called to the Singapore Bar in 1979. Her areas of practice include Conveyancing and Real Estate.