CALLFORM

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?

(Note: Buyer’s Stamp Duty was last revised on 20 Feb 2018)

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
First S$180,0001%
Next S$180,0002%
Next S$640,0003%
Remaining Amount4%

Alternatively, you may use a Buyer Stamp Duty Calculator to calculate the BSD payable.

Artra at Redhill

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:

Rates on or before 5 July 2018

Note: There will be a transitional provision for cases where an Option to Purchase (OTP) has been granted by sellers to potential buyers on or before 5 July 2018, and this OTP has not been varied on or after 6 July 2018. For such cases, the current ABSD rates, instead of the revised ABSD rates, will apply if the OTP is exercised within 3 weeks of this announcement (i.e. exercised on or before 26 July 2018) or the OTP validity period, whichever is earlier.

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%

Rates on or after 6 July 2018

Buyer's Citizen TypeRate of 1st Property Purchase2nd Property Purchase3rd and subsequent Property Purchase
Singapore CitizenNot Applicable12%15%
Singapore Permanent Resident (SPR)5%15%15%
Foreigners20%20%20%
Entities25%25%25%
DeveloperRemittable 25% + Non-Remittable 5%

See footnote1
Remittable 25% + Non-Remittable 5%

See footnote1
Remittable 25% + Non-Remittable 5%

See footnote1

Footnote1:

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.

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: ABSD for details or contact IRAS Hotline at 1800 356 8300  (Call from Singapore) or +65 6356 8300 (Calling from overseas) 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.

 

26 Newton

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 first S$180,000$180,000 x 1%S$1,800
2% of the next S$180,000$180,000 x 2%S$3,600
3% of the next S$640,000$640,000 x 3%S$19,200
Remaining Amount (i.e. S$1,000,000)S$1,000,000 x 4%S$40,000
BSD payableS$64,600
 Computation of ABSD (based on rates on or before 5 July 2018):

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

Total Stamp Duty Payable = $64,600 + $300,000 = $364,600

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 =)

Join our Mailing List
to receive Guides, Tips, Promotions & Upcoming Launches on Singapore Property.

Interested Property Type?
By subscribing to your mailing list, you have read and agreed to our Privacy Policy.

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]