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If you came here to learn all about Additional Buyer Stamp Duty, or, ABSD, you have come to the right place. Below are some frequently asked questions about ABSD as well as some tips we can offer you on how to legally avoid it. If our article doesn’t answer any of your questions on ABSD, be sure to write in to us at sales@auctionjia.com.sg. So let’s begin shall we?

  1. What is ABSD?

ABSD was first introduced on the 8th of December 2011. In the simplest of terms, ABSD is a government tax that is typically charged on the purchase of a second and subsequent residential property. These include HDB flats, residential shophouses (ABSD not applicable on commercial shophouses), condos and landed properties. However ABSD is charged depending on the buyer’s residential status. 

 

  1. Why do we pay ABSD?

ABSD is a cooling measure implemented by the government to keep property prices affordable for Singapore citizens by managing the demand for residential properties. It also aims to discourage foreigners and other entities from purchasing residential properties, and more so multiple residential properties.

 

  1. Who needs to pay ABSD?

- Singaporean citizens who are purchasing a second and subsequent residential property. 
- Singaporean permanent residents (PRs) who are buying their first residential property. 
- Foreigners who are buying any residential property (except those under FTA*).
- Entities* buying any residential property.

* Foreigners under Free Trade Agreements (FTAs) include Nationals and Permanent Residents of Iceland, Liechtenstein, Norway or Switzerland and Nationals of the United States of America.
* Entities refer to an 1. unincorporated association/ 2. a trustee for a collective investment scheme when acting in that capacity/ 3. a trustee-manager for a business trust when acting in that capacity/ 4. the partners of the partnership whether or not any of them is an individual, where the property conveyed, transferred or assigned is to be held as partnership property.

 

  1. What are the current ABSD rates?

The current ABSD rates have changed drastically since it first commenced. In the table below you can find the current ABSD Rates (on the higher of the purchase price or market value) as according to IRAS.

Profile of Buyer

ABSD Rates from 8 Dec 2011 to
11 Jan 2013

ABSD Rates from 12 Jan 2013 to
5 Jul 2018

ABSD Rates on/ after 6 Jul 2018
Singapore Citizens (SC) buying first residential property  Not applicable   Not applicable   Not applicable 
SC buying second residential property  Not applicable   7%  12%
SC buying third and subsequent residential property  3%  10%  15%
Singapore Permanent Residents (SPR) buying first residential property  Not applicable   5%  5%
SPR buying second and subsequent residential property  3%  10%  15%
Foreigners (FR) buying any residential property  10%  15%   20%
Entities buying any residential property    10%  15%   25%

plus Additional 5% for Housing Developers (non-remittable)
  1. When do you pay ABSD?

Once you have signed your contract, you are expected to pay ABSD. The deadline depends on where the purchase agreement is signed. If you sign the contract in Singapore, the deadline is 14 days. If you sign the contract overseas, you have 30 days after the agreement is received in Singapore. 

 

  1. What are the consequences of paying ABSD late?

Not meeting your ABSD payment deadline may come with some serious consequences. Here are the penalties you may face if you are late in paying your ABSD:

Late payment of up to 3 months: $10 or an amount equal to the BSD and ABSD payable, whichever is higher.
Late payment of more than 3 months: $25 or an amount equal to 4 times the BSD and ABSD payable, whichever is higher.

 

  1. Where to pay ABSD?

- You can pay ABSD through 3 alternative methods. The first is through the IRAS e-Stamping Portal (https://estamping.iras.gov.sg/). The portal accepts payments through NETS, cheque or cashier’s order. 
- You can also pay ABSD through IRAS Surf Centre e-Terminals, where it accepts payments through NETS, cheque or cashcard.
- The last method of payment is through SingPost Service Bureaus (Chinatown, Novena, Raffles Place and Shenton Way). This method accepts payments through NETS, cheque, cash or cashier’s order. 

Please do note that ABSD has to be paid in full and cannot be paid in instalments. 

 

  1. Can I use my CPF to pay ABSD?

ABSD can be reimbursed by your CPF. To do so you would first need to pay your ABSD by cash. Only then, at a later date, can you get the amount paid from your CPF. You can only use funds from your Ordinary Account for payment.

 

  1. How to avoid ABSD legally?

There are various ways to avoid ABSD, including: 

  1. Buy a commercial property: ABSD is not applicable for commercial properties so it makes a great option for those looking to invest.

  2. Decoupling: For couples who jointly own a property, this means to transfer shares to spouse A so as to free up spouse B. Spouse B is then allowed to buy a second property under his/her name without having to pay ABSD. This is also one of the most popular options. However, you would need to take into account the various stamp duties and transaction costs of decoupling first, before deciding if this is the right option for you. 

  3. Buying a property under one name: For couples without an existing property, purchasing a home under one name provides the flexibility and opportunity for your spouse to buy a separate property in future without having to pay ABSD. However, do consider if a single spouse's CPF is sufficient to pay the downpayment and monthly mortgage before doing so!

  4. Sell your existing house before purchasing a new one: To avoid ABSD, you would need to enter into a contract or agreement to sell your existing house, before entering into an Option to Purchase your new house. 

  5. Buy under a child's name: Get your child to buy mum/dad a new home! For this, make sure your child is 21 or older and a first-time home buyer. This way he/she would not have to pay the ABSD. However using this method means that it might restrict the child from buying a HDB or a marital home in future.

  6. Purchase under a trust: If you have a lot of cash on hand, you can buy a property under your child’s name through a trust. Why do you need a lot of cash? Because banks do not lend mortgages to properties purchased under a trust. This method also means that the property belongs to your child. To purchase under a trust, your child has to be under 21 and the process would need to be done through a lawyer.

  7. Dual key unit: A dual key unit is (legally) a single property that comprises two apartments side by side. It is a smart way to own two units that are connected, with the ability to provide for multi-generation living or to rent out one unit.

  8. ABSD remission for a married couple, including a Singapore Citizen spouse
    1. Joint Purchase by a married couple who do not own any residential property: Full ABSD remission may be applicable to a married couple who purchases a residential property jointly. The couple must include a Singapore Citizen (SC) spouse and the property must be purchased under both names of the couple only.
    2. Joint Purchase of second residential property by a married couple: ABSD remission may be applicable to a married couple who purchases a second residential property jointly, if the remission conditions are met. The couple must include a SC spouse and the property must be purchased under both names of the couple only. The conditions under the Stamp Duties (Spouses) (Remission of ABSD) Rules are as follows:
      • The married couple did not own interest in more than one residential property at the date of purchase of the second residential property.
      • ABSD has been paid on the second residential property.
      • The first residential property (co-owned or separately owned) is sold within 6 months after
        1. the date of purchase of the second property for completed property or
        2. 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
      • 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.
      • The married couple has not purchased or acquired any other residential property since the purchase of the second residential property.
      • The application for refund of ABSD is made within 6 months after the date of sale of the first residential property. 
  9. Buying an Executive Condo (EC): When you buy an EC you don’t have to pay ABSD upfront, unlike private condos which relies on a refund. However, you would still need to sell your current home within 6 months.

  10. Foreigners with FTA: Foreigners under the Free Trade Agreement (FTAs) are given the same stamp duty treatment as Singapore citizens. Which means they don't have to pay ABSD for when buying their first residential property and enjoy lower rates of ABSD when buying second and subsequent residential properties. The countries under the FTAs include Nationals and Permanent Residents of Iceland, Liechtenstein, Norway or Switzerland and Nationals of the United States of America.