Stamp Duty – Essential info on Buyer’s Stamp Duties in Singapore Property Purchase
Buyer’s Stamp Duty (BSD)
Buyer’s Stamp Duty (BSD) is payable on all property you buy or acquired in Singapore regardless of nationality.
You are required to pay BSD for documents executed for the sale and purchase of property located in Singapore. Buyer’s Stamp Duty will be computed on the purchase price as stated in the document to be stamped or market value of the property (whichever is the higher amount).
Nationals and PRs of Iceland, Liechtenstein, Norway or Switzerland, as well as US Nationals are accorded the same Stamp Duty treatment as Singapore Citizens. As such, these individuals may apply for remission of ABSD when buying their first residential property in Singapore.
Buyer’s Stamp Duty Rate and Computation
Buyer’s Stamp Duty is computed based on the purchase price or market value of the property, whichever is higher.
Prior to 20 February 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%.
*For definition of residential and non-residential properties, quick reference as below:
Current BSD Rate Computed as below:
For example, if the purchase price of a property is $600,000, the BSD payable will be:
– (1% x $180,000) + (2% x $180,000) + (3% x (600,000 – 180,000 – 180,000)) = $12,600.
Here’s a shortcut:
- if the property is being sold for or is valued below $1 million, you can use this formula to calculate the BSD instead:
(3% x purchase price or market value) – $5,400 = $12,600
- if the property is being sold for or is valued at $1.5 million, the formula to be applied as follow:
(4% x $1.5 million – $15,400 = $44,600)
The result ends up similar.
Stamp duty for rental
Property that are rented out within Singapore are also liable to pay stamp duty on their leases. The stamp duty is to be paid whenever an individual rents a property, or signs a contract to renew or extend their current lease.
The amount payable is dependent on the Average Annual Rent (AAR), which is computed based on the monthly rent and lease period.
Assuming a monthly rent of $3,500 and a lease period of 24 months for example, the AAR and lease duty rates would work out to be:
AAR: $3,500 x 24 months = $84,000.
Lease duty rates: 0.4% x $84,000 = $336
Additonal Buyer’s Stamp Duty (ABSD)
Additional Buyer’s Stamp Duty (ABSD) was first introduced on 7 December 2011 to cool the residential market and revised upwards on 12 Jan 2013 to cool the property market and curb sharp increase of the price of the residential properties in short span of period to ensure price increases are in line with economic fundamentals. The ABSD rates to be computed are dependent on the buyer’s residency status, i.e. whether you are a Singapore citizen, Singapore Permanent Resident or foreigner. For acquisitions made jointly by two or more parties of different profiles, the ABSD rate applicable will be based on the profile with the highest ABSD rate on the entire property value acquired.
As of 6 July 2018, the ABSD rates are:
1(a) As entities, developers will also be subject to the ABSD rate of 25% for entities. Developers may apply for remission of this 25% ABSD, subject to conditions (including completing and selling all units within the prescribed periods of 3 years or 5 years for non-licensed and licensed developers respectively). Details are provided under the Stamp Duties (Non-licensed Housing Developers) (Remission of ABSD) Rules and the Stamp Duties (Housing Developers) (Remission of ABSD) Rules.
1(b) Developers refer to entities which engage in the business of construction and sale of housing units.
1(c) This new 5% ABSD for developers is in addition to the 25% ABSD for all entities. This 5% ABSD will not be remitted, and is to be paid upfront upon purchase of residential property.
1(d) Entities who are acquiring residential properties with no intention to undertake housing development of the subject property acquired should pay the ABSD rate of 25%.
You will be regarded as purchasing an additional residential property if you already own a residential property in Singapore (whether you fully, jointly or partially own this first residential property).
Situation where buyer is not required to pay ABSD
- Where you have already contracted to sell your current residential property before signing the Option to Purchase for the new residential property
- If you are downgrading from a private property to a HDB resale flat. This is because you are required to sell your private property within 6 months of completing your purchase of the HDB resale
BSD and ABSD have to be paid in full and cannot be paid in instalments.
You may also be able to use your Central Provident Fund funds to pay the BSD and ABSD. Howevver, you will need to pay the BSD and ABSD first and then seek a reimbursement from your CPF account. Further information can be obtained from the IRAS website and the CPF website. flat
What’s The Deadline for Paying the BSD and ABSD
For property sale and purchase agreements signed in Singapore, the BSD and ABSD have to be paid within 14 days of the agreement being signed.
If however the sale and purchase agreement was signed overseas, the deadline is 30 days after the agreement was received in Singapore.
Consequences of late payment
If BSD or ABSD is not paid by the due date, you will be issued a Demand Note to remind you to make payment. The Demand Note will also state the penalty you have incurred for missing the payment deadline.
Late payment penalties are:
- Delay in payment for up to 3 months: $10 or an amount equal to the BSD and ABSD payable, whichever is higher
- Delay in payment exceeding 3 months: $25 or an amount equal to 4 times the BSD and ABSD payable, whichever is higher
- IRAS may recover the outstanding stamp duty by appointing your bank, employer, tenant or lawyer to pay the amount to it on your behalf. IRAS may also take legal action against you to recover the outstanding amount.
Remissions of ABSD
Full ABSD remission may be applicable to a married couple who jointly purchase a residential property, provided that at least one spouse is a Singapore citizen. In addition, both the spouses must not own any residential property.
Married couples, with at least one Singapore citizen spouse who jointly purchase a second home together, can continue to apply for an ABSD refund, as long as they sell their first home within six months after the date of purchase of the second property, or by the issue date of the Temporary Occupation Permit or Certificate of Statutory Completion of the second property – whichever is earlier.
It is important to only engage the Official Direct Developer Sales Team to assist you. There are several complex procedures and key factors to consider before committing to purchase a unit. Rest assured that all our representatives are certified, well-trained and committed to deliver. By engaging the Official Direct Developer Sales Team, you will also enjoy the best possible direct developer price. There is no commission required to be paid.
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