Stamp Duty: Summary For Home Buyers & Sellers

  • Facebook
  • Twitter
  • Pinterest
  • reddit

Whether you’ve bought or sold a home, chances are you’ve come across the tax that’s levied on real estate transactions, otherwise  known as BSD, ABSD and SSD.

Buying and selling residential property in Singapore (especially if we’re talking about owning multiple properties) means having to deal with paying tax — buyer’s stamp duty (BSD), seller’s stamp duty (SSD) and additional buyer’s stamp duty (ABSD) to be exact. 

If you’re wondering why there are more costs involved with buying property, it could all boil down to the introduction of property cooling measures designed to quell demand and limit the rise of buying-and-selling – also known as flipping properties to make a profit.

As you could already guess from the headline, the stamp rate depends on who you are in the property transaction. Here we’ll take a closer look at the different acronyms that permeate our real estate transactions and how much they could potentially add up to.

Buyer’s stamp duty (also known as BSD)

Who needs to pay buyer’s stamp duty?

There’s no other way around it — when you’re buying a property in Singapore, BSD will be levied onto your purchase. The rate is dependent on the purchase price or market value of the property, whichever is higher.

Purchase price or market value of the residential property BSD rates (before 20 Feb 2018) BSD rates (on or after 20 Feb 2018)
First $180,000 1% 1%
Next $180,000 2% 2%
Next $640,000 3%
Remaining amount 3% 4%

How to calculate BSD payable

Here’s what your BSD calculation could look like if you’re buying a 4-room HDB resale flat at $500,000 in 2021. 

Purchase price or market value of the residential property BSD rates (on or after 20 Feb 2018) Amount
First $180,000 1% $180,000 x 1% = $1,800
Next $180,000 2% $180,000 x 1% = $1,800
Next $140,000 3% $140,000 x 3% = $4,200

Based on the calculations above, your BSD payable adds up to = $1,800 + $1,800 + $4,200 = $7,800

Additional buyer’s stamp duty (also known as ABSD)

Who needs to pay additional buyer’s stamp duty?

This stamp duty applies to you if you’re buying your second (or subsequent) property. Yes, this means you’ll have to pay ABSD on top of the initial BSD. The ABSD amount is based on the valuation or the property’s selling price, whichever is higher.

It’s worth noting that the buyer’s nationality plays an important role here. For example, it could mean the difference between a 12% ABSD for a Singapore citizen’s second property compared to a PR’s 15% ABSD for their second property. 

However, if you’re eligible, you can choose to apply for ABSD remission which exempts you from having to fork out the hefty ABSD payment.

Who is eligible for ABSD remission?

According to the IRAS, you could potentially qualify for ABSD remission if the following scenarios apply to you: 

  • Married couples (consisting of a Singaporean citizen and a foreigner) who’s buying their first property through a joint purchase (AKA the house is under both names only)
  • Married couples (consisting of a Singaporean citizen and a foreigner) selling off their first property in order to stay in their next property within a six-month timeframe of the Temporary Occupation Permit (TOP) or Certificate of Statutory Compliance (CSC) issuance. Caveat: the newly bought property must not be completed yet and there must be no plans to buy any subsequent properties.
Property type Buyer type ABSD rates (from 8 Dec 2011 to 11 Jan 2013) ABSD rates (from 12 Jan 2013 to 5 Jul 2018) ABSD rates on or after 6 Jul 2018
First property Singapore citizen NA NA NA
Second property Singapore citizen NA 7% 12%
Third and subsequent property Singapore citizen 3% 10% 15%
First property Singapore permanent resident NA 5% 5%
Second and subsequent property Singapore permanent resident 3% 10% 15%
Any residential property Foreigner 10% 15% 20%
Any residential property Entity 10% 15% 25%

How to calculate the ABSD payable

Let’s say you’re buying your second property in 2021, which was valued at $800,000 but sold at $850,000. 

ABSD payable = $850,000 x 12% = $102,000

Buying a new home means taking up the mantle in protecting it. For a comprehensive plan that offers great coverage for home content at affordable premiums, enjoy peace of mind with Tiq Home Insurance.

  • Facebook
  • Twitter
  • Pinterest
  • reddit

Exclusive SingSaver Promotion: Use the promo code SSHOME5Y when applying to get up to $100 cashback, $10 via PayNow, and 15% off. Valid till 30 April 2021. T&Cs apply.

Seller’s stamp duty (also known as SSD) 

Who needs to pay seller’s stamp duty?

Applicable to residential properties purchased on or after 20 Feb 2010. This applies to you if you’re selling off a property within three years of purchasing it.

Simply put, the shorter the holding period, the higher the SSD rate. SSD might also be applicable if the property changed hands through transfer of ownership, divorce or inheritance.

Holding period SSD Rate
Up to 1 year 12%
More than 1 year and up to 2 years 8%
More than 2 years and up to 3 years 4%
More than 3 years NA

*SSD rate applies to properties purchased on and after 11 Mar 2017

How to calculate the SSD payable

Let’s say you’ve sold your condo at $2,500,000 after one and a half years. 

Since the holding period is just under 2 years, you’ll be subjected to the 8% SSD rate

SSD payable = $2,500,000 x 8% = $200,000

Read these next:
Buying A HDB Resale Flat: How To Minimise Cash Over Valuation (COV)
Property Tax, Explained: Annual Value, Tax Rate And How To Make Payment
How To Buy A House In Singapore: A Complete Guide (2021)
7 Popular Types Of Investment In Singapore (And Tips To Use Them For Optimal Gains)
Guide To Property Investment In Singapore

  • Facebook
  • Twitter
  • Pinterest
  • reddit

By Marissa Saini
Your friendly neighbourhood cat enthusiast who enjoys not being broke. Spend less, save more is the name of the game. Firm believer that being financially savvy is not about the destination, but the friends you make along the way.

Source link