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What is Stamp Duty?

(Commentary 10 March 2017: There are tweaks in the cooling measures as announced today, however, the tweaks DO NOT affect Buyer Stamp Duty and Additional Buyer Stamp Duty (ABSD). You may read more about the tweaks here: http://www.channelnewsasia.com/news/singapore/rules-on-sellers-stamp-duties-eased-among-adjustments-to/3584562.html.)

Before we talked about what is buyer stamp duty and additional buyer stamp duty in Singapore, let us have a brief understanding of what is a Stamp Duty. Stamp duty is a tax on documents relating to the purchase or lease of a property. It is to be paid by the buyer within 14 days after the date of the document (e.g. Sale & Purchase Agreement, Tenancy Agreement) if the document is signed in Singapore. If the document is signed overseas, it has to be paid within 30 days after the date of its receipt in Singapore.

It is not only an offence to use a document which Stamp Duty has not been paid on, it is also important to note that only a document where Stamp Duty is paid can be admitted as evidence in the court in cases of disagreements.

Details can be found here: IRAS: What is Stamp Duty?

So what is Buyer’s Stamp Duty?

Buyer’s Stamp Duty is tax paid on the acceptance of Option to Purchase (OTP) / Sale & Purchase Agreements (S&P). These are documents (i.e. OTP or S&P) that are prepared and signed when you buy or sell your property. Stamp Duty is payable on the actual price or market price whichever is higher.  The buyer is responsible for paying Buyer’s Stamp Duty.  Where Seller’s Stamp Duty is applicable, the seller is responsible for paying Seller’s Stamp Duty.

Calculation of Buyer’s Stamp Duty:

PAYMENT SCHEDULE OF STAMP DUTY

Payment Schedule% of Stamp Duty
On the first S$180,0001%
On the 2nd S$180,0002%
Thereafter3%

So what is Additional Buyer’s Stamp Duty?

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 due to the further acceleration in the escalation of the price of the residential properties.  ABSD is to be paid by certain groups of people who buy or acquire residential properties (including residential land) on top of the existing buyer’s stamp duty (BSD), is applicable as follows:

Buyer's Citizen TypeRate of 1st Property Purchase2nd Property Purchase3rd and subsequent Property Purchase
Singapore CitizenNot Applicable7%10%
Singapore Permanent Resident (SPR)5%10%10%
Foreigners & Non-Individuals15%15%15%
Above table is meant for straightforward cases, whereby buying group consists of foreigners who fall under Free Trade Agreement, they may be accorded the same treatment as Singapore citizen or the buying group is made up of Singapore Citizen and Singapore Permanent Resident, a different treatment will be given. As there are many iterations, we wouldn’t be able to list them here. You may visit IRAS: Computation of ABSD for details or contact IRAS Hotline at (+65) 6351 3697 (Phone),   for assistance. For straight forward cases, you may use our partner’s ABSD calculator to estimate the amount of ABSD you are required to pay for your next property purchase.

Case Study on Computation of Total Buyer’s Stamp Duty

Lastly, here’s the case study for the computation of BSD and ABSD:

Assuming a foreigner buying a condominium at a market price of $2 million. The ABSD rate of 15% will apply to this particular buyer.

Computation of BSD:

1% of the 1st $180,000$180,000 x 1%$1,800
2% of the 2nd $180,000$180,000 x 2%$3,600
3% on the remainder$1,640,000 x 3%$49,200
BSD payable$54,600
Computation of ABSD:

ABSD Payable: 15% on $2,000,000 = $300,000

Total Stamp Duty Payable = $54,600 + $300,000 = $354,600

Conclusion

We do hope this article will help you have a better understanding of the stamp duty. If you have any questions regarding stamp duty or buying a Singapore Property, feel free to contact us at [email protected]. Do leave us your comments on this article =)

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Artra at Redhill
26 Newton

Note: The above article is intended to provide general information. Although we endeavour to ensure that the information contained herein is accurate, we do not warrant its accuracy or completeness or accept any liability for any loss or damage arising from any reliance thereon. The information herein should not be treated as a substitute for separate professional advice concerning particular real estate situations. If you would like to obtain advice, please do not hesitate to get in touch with us at (65) 6100 1344 or [email protected]

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