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Guide to Calculate Buyer Stamp Duty, ABSD And Seller Stamp Duty

What are Singapore property stamp duties – BSD, ABSD and SSD?  What impact does these have on your property investment?

Basically, they stands for Buyer’s Stamp Duty, Additional Buyer’s Stamp Duty and Seller’s Stamp Duty respectively. This article will explain in details how they will be calculated, what are their purposes, and how will these affect the cost of your property purchase?

Firstly, Singapore property stamp duties are taxes on dutiable documents relating to any immovable properties. They are computed on the purchase price or market value of the property (whichever is the higher amount) stated in the document to be stamped. They are payable to the Inland Revenue Authority (IRAS), which constitute one of the major sources of revenue for the Singapore government.

Secondly, the combination of BSD, ABSD and SSD are implemented to curb excess speculation in the property market to keep it in line with economic fundamentals. It is also to prevent a property bubble from forming which could lead to adverse economic impact. And because these stamp duties can add substantially to the cost of property investment in Singapore, they have the effect of dampening activity and keep property prices in check. The imposition of these punitive property stamp duties is commonly referred to as “property cooling measures”.

The following will explain how the property stamp duties – BSD, ABSD and SSD – are calculated, and how they affect the property market in Singapore. These stamp duties apply to the investment in both private residential properties and HDB flats.

Buyer’s Stamp Duty (BSD) is imposed on anyone buying a property in Singapore regardless of whether you are a Singapore Citizen (SC), Singapore Permanent Resident (SPR) or Foreigner (FR). It is based on the purchase price or market value of the property, whichever is higher, as indicated in the sale and purchase agreement. It is calculated in a graduated scale as follows:

Buyer’s Stamp Duty Rates

For example, if you are buying a residential property costing 1 million dollars, the calculation for BSD is:

1% x $180,000 = $1,800

2% x $180,000 = $3,600

3% x $640,000 = $19,200

Hence, the total BSD payable for the residential property will be $24,600

Alternative formula (short-cut):

3% of Purchase Price – $5,400 (for properties costing up to 1 million dollars)

4% of Purchase Price – $15,400 (for properties costing above 1 million dollars)

Additional Buyer’s Stamp Duty (ABSD)

Additional Buyer’s Stamp Duty (ABSD) is levied based on the following:

  • Singapore Citizens (SC) buying their second and subsequent residential properties
  • Singapore Permanent Residents (SPR) buying their first and subsequent residential properties
  • Foreigners (FR) and Entities buying any residential properties (Note: Nationals or Permanent Residents from Switzerland, Norway, United States, Iceland and Liechtenstein are eligible for ABSD remission under Free Trade Agreements (FTAs) and are accorded the same Stamp Duty treatment as Singapore Citizens)

How much ABSD a property buyer will incur will depend on his/her status as indicated below:

Additional Buyer’s Stamp Duty (ABSD) Rates

From the above table, ABSD for a $1 million dollars residential property is calculated as follows.

For a Singapore Citizen (SC) buying a SECOND property, the ABSD payable is:

12% x 1 million dollars = $120,000.

(No ABSD is payable if this is the only property the Singapore Citizen (SC) owns).

For a Singapore Permanent Resident (SPR) buying a FIRST property, the ABSD payable is:

5% x 1 million dollars = $50,000

For a Foreigner (FR) buying a FIRST property, the ABSD payable is:

20% x 1 million dollars = $200,000

Additional Buyer’s Stamp Duty (ABSD) For Married Couples With Foreign Spouse

How does Additional Buyer’s Stamp Duty (ABSD) apply if a Singapore Citizen (SC) is married to a Singapore Permanent Resident (SPR) or Foreigner (FR)? If one of the spouse is a Singapore Citizen (SC) and both jointly purchased their FIRST property, ABSD will not apply.

However, if the married couple consists one Singapore Citizen (SC) and a Singapore Permanent Resident (SPR) or Foreigner (FR), and if they jointly buy a SECOND property, the higher of the ABSD rate will apply. The following tables will illustrate how the ABSD rate is applied to couples holding different citizenship status:

ABSD Rates For Married Couple – Singapore Citizen + Singapore Permanent Resident

ABSD Rates For Married Couple – Singapore Citizen + Foreigner

ABSD Rates For Married Couple – Singapore Permanent Resident + Foreigner

Additional Buyer’s Stamp Duty (ABSD) Remission

Full Additional Buyer’s Stamp Duty (ABSD) remission may be applicable to a married couple who jointly purchases a second residential property if they meet certain conditions. These are:

1. The married couple must include a Singapore Citizen and the property is purchased under the name of the couples only.
2. They must not have interest in more than one residential property at the date of purchase of the second residential property.
3. ABSD has been paid on the second residential property.
4. The first residential property (co-owned or separately owned) is sold within 6 months after: (i) the date of purchase of the second property for completed property or; (ii) 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
5. The married couple remains married and there is no change of ownership in the second residential property at the time of sale of the first residential property.
6. The married couple has not acquired additional residential property since the purchase of the second residential property.
7. The application for refund of ABSD must be made within 6 months after the date of sale of the first residential property.

Can CPF Funds Be Used For Payment of Singapore Property Stamp Duties?

Buyers cannot use their CPF funds to pay for SSD. It must be paid in cash. However, they can apply for reimbursement for BSD and ABSD from their CPF accounts if they wish to, but with the following conditions:

  • Only funds from the CPF Ordinary Account (OA) can be used
  • For purchase of a second property using CPF, the prevailing Basic Retirement Sum (BRS) must be set aside before any excess monies can be used
  • For purchase of completed projects, BSD and ABSD must be paid in cash first and then get reimbursement from CPF at a later date
  • For purchase of uncompleted properties, BSD and ABSD can be paid directly from CPF

Besides stamp duties, CPF funds in the Ordinary Account can also be used to pay:

  • Legal fees
  • Purchase price
  • Monthly repayments of housing loan

Seller’s Stamp Duty (SSD)

For those thinking of speculating in properties by flipping them for quick profits, they have to take into consideration the Seller’s Stamp Duty (SSD) which will take a chunk out of their sales proceed. This has the effect of curbing rampant property speculation to ensure property prices move in line with economic fundamentals.

Sellers who wish to dispose of their properties within three years will have to pay SSD based on the rates below. As can be seen, those who sell their properties within one year of their purchase will face a punitive charge of 12%.

Seller’s Stamp Duty Rates

SSD is calculated from the date when the buyer exercised the Option to Purchase or Sales and Purchase Agreement. It is based on the selling price or market value, whichever is higher.

For example, if you sold your property at 2 million dollars between within 1 year of its purchase, the SSD payable will be:

12% x $2,000,000 = $240,000

Seller’s Stamp Duty (SSD) Exemption

If you fall under one of the following cases, you are eligible for seller’s stamp duty (SSD) exemption:

1. Licensed housing developers who are governed under the Housing Developers (Control and Licensing) Act need not pay SSD when selling residential properties developed by them.
2. Public authorities (e.g. HDB and JTC) in exercising their functions and duties need not pay SSD when selling residential properties.
3. Residential property owners need not pay SSD when their properties are acquired by the Government under the Land Acquisitions Act.
4. Individuals who own residential properties need not pay SSD if they have been adjudged a bankrupt and are required to dispose of their residential properties as a result of bankruptcy.
5. Companies that own residential properties need not pay SSD when disposing of their residential properties upon involuntary winding up.
6. Foreigners need not pay SSD when they have to sell their residential properties as required under the Residential Properties Act.
7. For HDB flat sellers or transferors who bought or acquired their flats on or after 30 Aug 2010 and their flats have been identified for Selective Enbloc Redevelopment Scheme (SERS) but sell their flats in the open market before HDB claims them.
8. HDB flat sellers or transferors who return their flats to HDB as a result of re-possession by HDB or under the SERS.
9. A person who owns an HDB flat and inherits another HDB flat, is required under the HDB’s regulations to dispose of either the inherited HDB flat or the existing HDB flat. This exemption applies to disposal of flats on or after 18 Dec 2015.
10. A person who owns a non-HDB flat and inherits an HDB flat, is required under the HDB’s regulations to dispose of the inherited HDB flat. This exemption applies to disposal of flats on or after 18 Dec 2015.
11. A person who owns an HDB flat marries a person who owns another HDB flat and the couple is required under the HDB regulations to dispose of either one of the HDB flats. This exemption applies to disposal of flats on or after 18 Dec 2015.

SSD is calculated from the date when the buyer exercised the Option to Purchase or Sales and Purchase Agreement. It is based on the selling price or market value, whichever is higher.

For example, if you sold your property at 2 million dollars between within 1 year of its purchase, the SSD payable will be:

12% x $2,000,000 = $240,000

Timeline for Payment of Singapore Property Stamp Duties BSD, ABSD And SSD

Purchasers of properties in Singapore who incurred BSD, ABSD or both, they must pay: 

  • within 14 days from date of execution of the Sales & Purchase Agreement or Option to Purchase if it is signed in Singapore or;
  • within 30 days of its receipt in Singapore if it is signed overseas

For SSD, it must be paid within 14 days of the date of Contract/Agreement to sell your property.

What Constitutes A Residential Property?

According to the Residential Property Act, residential properties include the following:

  • Condominiums and apartments
  • Bungalows
  • Terrace Houses
  • Cluster Houses
  • Executive Condominiums
  • HDB Flats
  • HUDC Flats
  • HDB Shops with Living Quarters
  • Shophouses with Mixed Commercial & Residential Use

However, there are restrictions on property ownership for Singapore Permanent Residents (SPR) and Foreigners (FR). More information on this can be found in “Singapore Property Rules for Foreigners”.

As can be seen, investing in a property is a huge financial commitment, and probably one of the most important decision you will make in your life. Whether you are buying it for investment, own stay or speculation, there are critical cost elements such as Singapore property stamp duties to account for.

We hope this guide has been useful to you. However, should you require more information about the Singapore property market or property financing, please do not hesitate to contact us for an obligation-free consultation. Being a representative of the largest real estate agency in Singapore, we have helped many clients navigate successfully through their home investment journey. Due to our excellent track record, we have also been trusted by major property developers to market their new projects. These include the the following new projects with promising investment potential:

 

  • Provence Residence, an executive condo near Canberra MRT station and Canberra Plaza
  • Parc Greenwich, an executive condo at Fernvale Lane, next to the Seletar Springs Estate
  • Bartley Vue, a 115-unit condo development 400m from the Bartley MRT station
  • The Watergardens At Canberra, a low-rise condo development near the Canberra MRT station
  • Belgravia Ace, a freehold strata landed development in Seletar Hills Estate
  • Canninghill Piers, an integrated development at Clarke Quay beside the Singapore River
  • The Reef At King’s Dock, an exclusive waterfront development at Harbourfront opposite Sentosa island
  • Midtown Modern, an integrated development to be built atop the Bugis MRT station
  • One Bernam condo, a mixed-use development at Tanjong Pagar within the Central Business District
  • The Atelier, a freehold condo development at Newton in Singapore’s prime District 9
  • Kopar At Newton, an exclusive condo development opposite the Newton Food Centre
  • Ki Residences At Brookvale, a 999-year development in the idyllic Sunset Way estate
  • Parc Central Residences, the first executive condominium to be launched in Tampines in eight years
  • One-North Eden, a mixed-use development in one-north, Singapore’s high-tech, research and innovation hub
  • Pasir Ris 8, an integrated development beside the Pasir Ris MRT station, bus interchange and White Sands shopping mall

 

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