ABSD Singapore: Understanding Additional Buyer’s Stamp Duty

Are you planning to purchase a property in Singapore? If so, it’s essential to understand the Additional Buyer’s Stamp Duty (ABSD) policy. ABSD is a tax imposed on buyers of residential properties in Singapore, and it’s based on the profile, count, and date of purchase. The policy was introduced in 2011 to moderate the demand for properties and promote owner-occupation.

A colorful skyline of Singapore with iconic landmarks and modern buildings

The ABSD policy varies depending on the type of buyer, the number of properties owned, and the date of purchase. For example, Singapore citizens buying their second and subsequent properties have to pay 20% to 30% ABSD, while permanent residents, foreigners, and entities have to pay 5% to 65% ABSD from April 27, 2023, onwards. The ABSD rates for foreigners buying any residential property in Singapore increased from 30% to 60% as part of the third round of cooling measures since December 2021 to moderate investment demand.

Key Takeaways

ABSD is a tax imposed on buyers of residential properties in Singapore, based on their profile, count, and date of purchase.
The ABSD policy varies depending on the type of buyer, the number of properties owned, and the date of purchase.
Foreigners buying any residential property in Singapore will pay an additional buyer’s stamp duty (ABSD) of 60%, up from 30%, as part of the third round of cooling measures since December 2021 to moderate investment demand.

Understanding ABSD in Singapore

A city skyline with prominent landmarks in Singapore, with a focus on real estate properties to represent the impact of Additional Buyer's Stamp Duty (ABSD) in the country

Concept of Additional Buyer’s Stamp Duty

When you purchase a property in Singapore, you are required to pay a Buyer’s Stamp Duty (BSD) and an Additional Buyer’s Stamp Duty (ABSD). ABSD is a tax imposed on top of the existing BSD, and it applies to certain groups of buyers, such as Singapore Permanent Residents (PRs) and foreigners. The ABSD was introduced in 2011 as part of the government’s cooling measures to curb property speculation.

The ABSD rates are calculated based on the purchase price or the market value of the property, whichever is higher. The rates vary depending on the buyer’s profile and the number of properties they already own. Singapore Citizens (SCs) buying their first residential property are exempt from ABSD, while SCs buying their second and subsequent residential properties are subject to a 12% ABSD. PRs buying their first residential property are subject to a 5% ABSD, while PRs buying their second and subsequent residential properties are subject to a 15% ABSD. Foreigners are subject to a 20% ABSD regardless of the number of properties they own.

Current ABSD Rates and Calculations

The current ABSD rates in Singapore are as follows:

SC buying second property: 12%
SC buying third and subsequent properties: 15%
PR buying first property: 5%
PR buying second and subsequent properties: 15%
Foreigners buying any property: 20%

To calculate the ABSD payable, you can use the following formula:

ABSD payable = Purchase price or market value of property x ABSD rate

For example, if you are a PR buying your second property with a purchase price of SGD 1 million, your ABSD payable would be:

SGD 1 million x 15% = SGD 150,000

Implications for Singapore Citizens and PRs

The ABSD has significant implications for Singapore Citizens and PRs who wish to purchase multiple properties. The higher ABSD rates for second and subsequent properties make it more expensive for them to invest in the property market. However, the ABSD has also helped to stabilise the property market and prevent property speculation, which benefits all buyers in the long run.

It is important to note that the ABSD rates and regulations are subject to change, and you should always check with the Inland Revenue Authority of Singapore (IRAS) for the latest information before making any property purchases.

Policy Impact and Exemptions

A city skyline with a prominent building representing the impact of the ABSd policy in Singapore, with other buildings around it exempt from the policy

Effects on Property Market and Prices

The Additional Buyer’s Stamp Duty (ABSD) policy has had a significant impact on Singapore’s property market and prices. Since its implementation, the ABSD has helped to cool down the property market, which was previously overheated. The ABSD has also helped to reduce the demand for residential properties, which has led to a decrease in property prices.

Investors, in particular, have been affected by the ABSD policy. The ABSD has made it more expensive for foreign buyers to acquire residential properties in Singapore, which has reduced the number of foreign buyers in the market. However, the ABSD policy has not affected owner-occupiers as much, as they are exempt from paying the ABSD.

ABSD Remission and Exemptions

The ABSD policy provides for remission and exemptions for certain groups of buyers. For example, Singapore citizens buying their first residential property are exempt from paying the ABSD. In addition, married couples who jointly purchase a property are also eligible for ABSD remission.

Foreign buyers may also be eligible for ABSD remission if they are citizens of countries that have free trade agreements with Singapore. However, the conditions for ABSD remission are strict, and not all foreign buyers will be eligible.

Special Considerations for Married Couples

Married couples who jointly purchase a property are eligible for ABSD remission. However, there are some special considerations that they need to be aware of. For example, if one of the spouses already owns a property, they will not be eligible for ABSD remission.

In addition, if one of the spouses is a foreigner, they will be subject to the higher ABSD rates that apply to foreign buyers. However, if the foreign spouse becomes a Singapore citizen or permanent resident, they may be eligible for ABSD remission.

Overall, the ABSD policy has had a significant impact on Singapore’s property market and prices. While it has helped to cool down the market, it has also made it more difficult for some buyers to acquire residential properties. However, the policy provides for remission and exemptions for certain groups of buyers, which has helped to mitigate the impact of the ABSD on these groups.

Frequently Asked Questions

What are the current ABSD rates for purchasing property in Singapore?

The ABSD rates for purchasing property in Singapore depend on the profile of the buyer and the number of properties they currently own. As of 27 April 2023, Singapore Citizens (SC) buying their first residential property do not need to pay ABSD. However, SCs buying their second residential property are subject to 20% ABSD, and those buying their third and subsequent residential property are subject to 30% ABSD. Singapore Permanent Residents (SPR) buying their first residential property are subject to 5% ABSD, while those buying their second and subsequent residential property are subject to 15% ABSD. Foreigners and entities buying any residential property are subject to 20% ABSD.

How can one calculate the payable ABSD for a property acquisition?

The payable ABSD for a property acquisition can be calculated by taking the purchase price or market value of the property, whichever is higher, and applying the relevant ABSD rates based on the profile of the buyer and the number of properties they currently own.

Are there any exemptions available from ABSD for foreigners buying property?

Foreigners and entities buying any residential property in Singapore are not eligible for any ABSD exemptions.

What are the specific ABSD rates applicable for buying a second property?

As of 27 April 2023, Singapore Citizens buying their second residential property are subject to 20% ABSD, while Singapore Permanent Residents buying their second and subsequent residential property are subject to 15% ABSD. Foreigners and entities buying any residential property are subject to 20% ABSD.

Can you explain the changes in ABSD rates over recent years?

The ABSD rates in Singapore have been adjusted several times in recent years to regulate the property market and curb speculation. The most recent change was on 16 December 2021, when the ABSD rates were adjusted upwards for all buyers except for Singapore Citizens buying their first residential property.

What are the legal requirements for paying ABSD when purchasing a property in Singapore?

The legal requirements for paying ABSD when purchasing a property in Singapore include filing the ABSD return and paying the ABSD within 14 days from the date of the property purchase or acquisition. Failure to do so may result in penalties and fines.