Buyer’s Stamp Duty (BSD) and Additional Buyer’s Stamp Duty (ABSD) in Singapore: A Comprehensive Guide

This article is intended for informational purposes only and should not be considered financial or tax advice. Please consult with a qualified professional for personalized guidance.

Singapore’s property market has long been attractive to both local and foreign investors. To manage demand and promote sustainable growth, the government has implemented various cooling measures, including the Buyer’s Stamp Duty (BSD) and Additional Buyer’s Stamp Duty (ABSD). This article delves into these taxes, their calculations, rates, exemptions, and a detailed history of their changes.

All you need to know about BSD and ABSD

What is Buyer’s Stamp Duty (BSD)?

BSD is a tax levied on documents relating to the purchase or acquisition of properties in Singapore. It applies to all property types, including residential, commercial, and industrial properties. The BSD rate is based on the purchase price or market value of the property, whichever is higher.

Example of BSD Calculation

Let’s assume you purchase a residential property for $1,000,000. The BSD calculation would be as follows:

• First $180,000: 1% = $1,800
• Next $180,000: 2% = $3,600
• Next $640,000: 3% = $19,200
• Remaining $0: 4% = $0

Total BSD payable: $24,600

Most Recent BSD Rates (Effective 15 February 2023)

Here are the most recent BSD rates for the purchase of residential properties.

Here are the most recent BSD rates for the purchase of non-residential properties.

Frequently asked questions about BSD

How much is BSD in Singapore?

BSD in Singapore ranges from 1% to 4% of the property price or market value, whichever is higher.

Can BSD be paid with CPF?

No, BSD cannot be paid with CPF.

What is the difference between ABSD and BSD?

BSD applies to all property purchases, while ABSD is an additional tax on residential property purchases for specific buyers.

Does commercial property have BSD?

Yes, commercial properties are also subject to BSD.

Additional Buyer’s Stamp Duty

ABSD is a tax payable on top of BSD for residential properties. It is designed to moderate demand from buyers who already own residential properties, as well as foreign buyers. The ABSD rate varies depending on the buyer’s profile (e.g., Singapore Citizen, Permanent Resident, or foreigner) and the number of residential properties they own.

Example of ABSD Calculation

Let’s consider a Singapore Citizen buying their second residential property for $1,200,000. The ABSD calculation would be as follows:

• ABSD rate for second property: 20%
• ABSD payable: $1,200,000 x 20% = S$240,000

Most Recent ABSD Rates (Effective 27 April 2023)

Exemptions to ABSD

Several exemptions to ABSD exist, catering to specific scenarios to encourage homeownership and specific housing transitions:

• Married couples buying their first residential property together: Treated as first-time buyers, they are exempt from ABSD, promoting family units.

• Singapore Citizens moving to a HDB flat: SCs moving from private property to an HDB flat may be eligible for ABSD remission, easing the transition.

• Housing developers buying residential land for development: This exemption supports housing supply, preventing additional costs that could increase property prices.

Specific conditions and timelines apply to each exemption, necessitating careful review with relevant authorities like the Inland Revenue Authority of Singapore (IRAS).

Moreover, while foreigners generally face ABSD on residential property purchases in Singapore, nationals of certain countries are exempt from this tax due to specific Free Trade Agreements (FTAs). These exemptions aim to foster reciprocal economic benefits and encourage cross-border investment.

The key FTAs granting ABSD exemption are:

1. Singapore-European Free Trade Association (ESFTA):
   • Nationals and Permanent Residents of Iceland, Liechtenstein, Norway, and Switzerland are treated the same as Singapore Citizens for stamp duty purposes, including exemption from ABSD on their first residential property purchase.
   • However, for subsequent property purchases, they are subject to ABSD rates applicable to Singapore Citizens.
2. United States-Singapore Free Trade Agreement (USSFTA):
   • U.S. Nationals are accorded the same stamp duty treatment as Singapore Citizens, including ABSD exemption for their first residential property.

ABSD for residential properties transferred into a living trust

Additional Buyer’s Stamp Duty (ABSD) of 65% will now apply on any transfer of residential property into a living trust. ABSD will be payable even if there is no identifiable beneficial owner at the time the residential property is transferred into a trust. So this new change closes a loophole. This ABSD (Trust) is to be paid upfront when the transfer is made.

The History of BSD and ABSD Changes

These cooling measures are pivotal in maintaining a stable property market, preventing speculative bubbles, and ensuring housing remains affordable for Singaporeans.

• 2011: ABSD is introduced for the first time due to surging property prices, with rates initially set at 10% for foreigners and 3% for PRs purchasing their second or subsequent properties.

• 2013: ABSD rates for foreigners and PRs are further increased to 15% and 5% respectively, along with an additional 5% for entities. This is in response to continued market escalation.

• 2018: BSD rates are revised to differentiate between residential and non-residential properties, aiming to cool the residential segment while encouraging commercial activity.

• December 2021: ABSD rates for foreigners and entities buying residential properties are raised to 30% and 35% respectively, due to renewed concerns about excessive foreign investment.

• April 2023: ABSD rates are increased across various buyer profiles, with the most significant increase for foreigners, doubling their ABSD to 60%.

• May 2023: ABSD rates for living trusts are increased to 65%, aligning with rates for other entities to prevent potential tax avoidance loopholes.

BSD and ABSD Rates for 2024

Frequently asked questions about ABSD

What is the current ABSD rate?

The ABSD rate ranges from 0% to 65% depending on the buyer’s profile and the number of residential or non-residential properties owned.

What is ABSD in Singapore?

ABSD is an additional tax on residential property purchases for certain buyers like foreigners, entities, or Singaporeans buying multiple properties.

How to buy 2nd property without ABSD?

Buying as a couple for the first time or downgrading from a private property to an HDB flat may exempt you from ABSD, subject to conditions.

What is the 5-year ABSD rule?

If you sell your residential property within five years of buying it, you might be able to claim a refund or remission of ABSD under certain conditions.

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