When you buy a home, you’re not just paying for that nice new flat or apartment.
There are actually quite a few other things you’ll be spending thousands on, including interest payments for your home loan, legal fees and… stamp duty.
Each time you buy a property, you’re obliged to pay Buyer’s Stamp Duty (BSD) to IRAS.
And, if you happen to satisfy certain conditions, such as, oh, being a foreigner or owning another property, you get slapped with Additional Buyer’s Stamp Duty (ABSD), which was introduced as part of the cooling measures to stop overzealous buyers from overheating the property market.
So how much does this add to the price tag of your property?
*As of 16 December 2021, the Singapore government increased the Additional Buyer’s Stamp Duty for Singaporean citizens, Permanent Residents, and foreigners buying properties in Singapore. Read on for the full breakdown.
Buyer’s Stamp Duty (BSD) in Singapore
All property buyers have to pay BSD. There is no escape. Think of it as an unavoidable tax on your home.
BSD rates are calculated based on the value of the property, as follows:
| Purchase Price or Market Value of the Property | BSD Rates for residential properties | BSD Rates for non-residential properties |
| First $180,000 | 1% | 1% |
| Next $180,000 | 2% | 2% |
| Next $640,000 | 3% | 3% |
| Remaining Amount | 4% | 3% |
As you can see, the more expensive your property, the higher the overall BSD rate you’ll be forced to pay. So buyers of $17 million properties at Sentosa Cove, take note.
Additional Buyer’s Stamp Duty (ABSD) Singapore
In addition to the BSD, there is also the Additional Buyer’s Stamp Duty (ABSD), which has increased since 16 December 2021.
You are liable to pay ABSD on residential property purchases if:
- You’re a Singapore citizen who’s already a residential property owner and wants to buy a second, third, or fourth house
- You’re a PR
- You’re a foreigner
Essentially, it is an addition to the Buyer’s Stamp Duty that is imposed on all purchases of a residential property in Singapore.
Unlike the Buyer’s Stamp Duty, the Additional Buyer’s Stamp Duty, or ABSD, is a kind of tax on the purchase of a residential property in Singapore that only affects Singapore Permanent Residents and foreigners, or Singapore Citizens who are buying more than one property.
In other words, it artificially raises the property prices for everyone except Singapore Citizens buying their first residential property.
Here’s how much you have to pay:
| Additional Buyer’s Stamp Duty (Dec 2021) | ABSD rate |
| Singapore citizen buying your first residential property | 0% |
| Singapore citizen buying a second residential property | 17% |
| Singapore citizen buying a third and subsequent residential property | 25% |
| PR buying a first residential property | 5% |
| PR buying a second and subsequent residential property | 25% |
| PR buying a third and subsequent residential property | 30% |
| Foreigner buying any residential property | 30% |
As you can see, the ABSD rates make the BSD ones look like peanuts.
And yes, HDB property counts as a first property in the computation of ABSD.
If you’re thinking of upgrading your home, you can lower or eliminate your ABSD liabilities by timing the sale of your home to coincide with your purchase of a new one.
ABSD remission for married couples
There are some cases where you don’t need to pay ABSD even as a foreigner or PR.
If, as a foreigner or PR, you are married to Singaporean citizen and you don’t own any residential property currently, you don’t have to pay ABSD.
You can also get your ABSD refunded if you are switching homes as a married couple. The first residential property that you paid ABSD for must be sold within 6 months after the purchase date of the second property, if completed, or after the issue date of the TOP or CSC (whichever is earlier). See full terms and conditions of ABSD remission on IRAS website.
Property cooling measures in Singapore — what are they for?
When the ABSD was first introduced in December 2011, it was mainly to discourage foreigners and entities (essentially any buyer who is not an individual) from purchasing residential property in Singapore, and discourage the purchase of three or more residential properties.
A foreigner who wants to buy a $2 million property today, for example, would now have to pay $600,000 in additional stamp duty.
| ABSD rates (Dec 2021) | First property | Second property |
| ABSD for Singaporean Citizen | 0% | 17% |
| ABSD for PRs | 5% | 25% |
| ABSD for foreigners | 30% | 30% |
One of the immediate benefits of implementing the ABSD was seeing a sharp drop in property speculation.
Buyers from overseas who may have previously been interested in investing in Singapore property were put off by the high ABSD. The thought of paying over $600,000 for a $2 million property was enough to make even the richest property investors think twice.
However, the ABSD was further increased thrice – in January 2013, July 2018, and 16 December 2021.
Coupled with the Total Debt Servicing Ratio and Seller’s Stamp Duty, these measures were meant to decrease the volume of property transactions.
While the measures did cool the property market for a few years around 2018 to 2020, the pandemic drove another heatwave in the property market.
Average Singaporeans, especially many of us who are already struggling with the home loan downpayment and monthly repayments, will be quickly forced out of property ownership as prices swell beyond our incomes.
ABSD calculator
Hate math? You can calculate your BSD and ABSD liabilities using this nifty stamp duty calculator right here on MoneySmart. Once you’re reading to commit to buying a property, you can also contact our mortgage specialists who will give you unbiased advice on the latest home loans rates in Singapore.
Do you have any other questions on BSD or ABSD? Ask them in the comments section!
The post Additional Buyer’s Stamp Duty — What Is ABSD & How Much Do I Need To Pay? (Dec 2021) appeared first on the MoneySmart blog.
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The post Additional Buyer’s Stamp Duty — What Is ABSD & How Much Do I Need To Pay? (Dec 2021) appeared first on MoneySmart.sg.
Original article: Additional Buyer’s Stamp Duty — What Is ABSD & How Much Do I Need To Pay? (Dec 2021).
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