Stamp Duty Singapore: Everything You Need to Know
Stamp Duty for Property Buyers, Property Sellers, and Rentals
What is Stamp Duty?
Yes. Stamp duty is the tax imposed by the Inland Revenue Authority of Singapore (IRAS) when property is either leased, rented, bought, or sold. Stamp duty is required to be paid on all Singapore property transactions, with a few exceptions. Because stamp duty can end up being quite expensive on the purchase of property, this figure should be considered when deciding to buy property. To figure out how much money you would owe for stamp duty, it’s important to know the various types.
Stamp Duty for Property Buyers
Buyer’s Stamp Duty (BSD)
People who buy real property located anywhere in Singapore, and this includes HDB resale or built-to-order (BTO) flats must pay Buyer’s Stamp Duty (BSD) pertaining to the executed documents for that purchase. The amount of BSD owed is determined by the purchase price indicated on the document requiring the stamp or the property’s market value, whichever is higher.
As of 20 February 2018, revised BSD rates came into effect, which are as follows:
For example, if you are a resident of Singapore and are buying a piece residential property priced at $1,000,000:
1% x $180,000 = $1,800
2% x $180,000 = $3,600
3% x $640,000 = $19,200
Total BSD payable = $24,600
Additional Buyer’s Stamp Duty (ABSD)
In addition to the Buyer’s Stamp Duty (BSD), you would also be taxed an Additional Buyer Stamp Duty (ABSD) when buying property in Singapore. How much you would be taxed depends on the criteria you fall under (i.e. how many properties you currently own and your residency status).
What is Additional Buyer’s Stamp Duty (ABSD)?
ABSD Singapore is the stamp duty or tax imposed in addition to the initial Buyer’s Stamp Duty, which is the stamp duty or tax that people buying residential property must pay on the transaction. The tax amount is determined by the selling price or the property’s market value, whichever is higher.
For example, the value of the property is $1,000,000 but it actually sold for $1,100,000. If you are subject to an ABSD of 12%, you would determine the amount based on the higher number, which would be $1,100,000 x 12% = $132,000.
Buyers subject to ABSD are categorized as follows:
- Citizens of Singapore: Must pay 12% ABSD on the second property they purchase and all subsequent purchases.
- Permanent Residents (PRs) of Singapore: ABSD is owed on all property purchases, starting with 5% on the first, followed by 15% on all subsequent purchases.
- Foreigners: ABSD is owed on all property purchases at a rate of 20%.
- Entities (associations and companies): ABSD is owed on each property transaction at a rate of 25%.
Why was ABSD introduced?
Overview of ABSD implementation how it changed over time:
- December 2011: ABSD was implemented to handle the rising demand for property.
- January 2013: An increase in ABSD rates occurred, along with additional buyer profiles for who would be liable for paying the stamp duty.
- July 2018: Another increase in ABSD rates were implemented, which has remained.
When ABSD Singapore was initially implemented in December 2011, the objective was to dissuade foreigners and entities from buying one or more residential properties in Singapore. The hope was that this tax would dampen the rising demand, and thus the prices for residential property. The idea was to keep housing more affordable for Singaporeans.
A further increase in rates occurred in January 2013 and new buyer profiles were added to include more who would be responsible for paying ABSD. As a result, foreign buyers and speculators who may have previously been interested in buying property in Singapore, were dissuaded by the higher ABSD rates.
What’s considered a residential property under the ABSD framework?
Transactions involving residential properties are the ones that are subject to ABSD. So, if you are buying a bungalow, condominium, terrace house, HDB flat or something that you will be using as a home, you are liable for Additional Buyer Stamp Duty.
ABSD is also applicable on shophouses equipped with additional living quarters, since these are being used as homes. HDB shophouses that come with a residence on an upper floor are also subject to pay ABSD since these too are being used as homes. Sometimes, residential portion of a shophouse can be converted to commercial use after URA approval through a change of use. In this case, ABSD will apply. To determine whether a property is subject to ABSD, one always has to check on the zoning of the land in question instead of the use of the space.
The current ABSD Singapore rates are stated in the following chart:
For example, a Singaporean buying a second home or residential property for $1,000,000 will be charged an ABSD of:
12% x $1,000,000 = $120,000
Using the example above, this buyer would be charged a BSD plus an ABSD for a total of:
$24,600 + $120,000 = $144,600 (14.46% of purchase price of $1,000,000)
Exceptions & Remissions
Permanent residents and nationals from Switzerland, Liechtenstein, Iceland, United States and Norway have the same treatment as Singapore citizens when it comes to payment of stamp duty. Because of this these people are allowed to apply to have a remission or ABSD refund on their first residential purchase in Singapore.
Married couples who buy a second home in Singapore may also apply for a remission of ABSD on that property as long as they are purchasing the residence jointly. For more information, click here.
Your ABSD rates depend on two factors: your residency status at the time of the property transaction as well as your nationality.
What defines an “entity” when it comes to ABSD?
An entity is not considered an individual person, but rather one of the following:
- An unincorporated organization or association
- An investment group represented by a trustee acting in that capacity
- A business trust represented by a trustee/manager acting in that capacity
- A partnership made up of partners even if none of the partners is a person, in which the partnership will hold the property being assigned, conveyed, or transferred
Are there any ABSD exemptions?
In certain circumstances, no ABSD is levied, which are as follows:
- When the individual or entity has already signed a sales contract on their current residence before signing the Option to Purchase the new residential property
- When the individual or entity is scaling down from a private residence to an HDB resale flat
While this is not actually an “exemption,” sometimes families buy dual-key condo units. These are technically sold as a single property (thus no ABSD), but in reality, they are two separate homes consisting of the main unit and a smaller sub-unit.
Sometimes people use decoupling to avoid paying ABSD. This is when co-owners of a shared home “break up” and one owner transfers their half to the other. (Keep reading if you want to find out more on how to avoid ABSD.)
ABSD remission for married couples
Even though we’ve explained that permanent residents and foreigners are always charged ABSD, there’s one case in which these people are not obligated to pay it. If you are a permanent resident or foreigner whose spouse is a Singaporean, and you own no residential property in Singapore, you are not liable for ABSD.
Married couples moving to a new house together are also entitled to an ABSD refund. To be eligible for the ABSD refund, the home that they currently owned must be sold within a period of 6 months of purchasing the new home. You can view the full terms and conditions on IRAS’s website.
ABSD remission under the COVID-19 (Temporary Measures) Act
Singaporean couples who are married and either plan to buy or have already jointly bought a second home are entitled to get a one-year ABSD extension. There is an application process that upon approval will give them more time to get their first property sold.
In order to be eligible for an ABSD extension, the couple must have purchased their second property by 1 June 2020 or thereafter and the expiration on the sale of their first property fell on 1 February 2020 or thereafter.
I’m buying a property with someone else. How does ABSD work?
If you are planning to buy property with another individual, you may find out that there are different ABSD rates that could apply. If that turns out to be the case, then you would be liable for the higher ABSD rate.
Please take a look at the example below to see how this would work:
Your spouse’s properties
Condominium unit (sole owner)
Condominium unit (sole owner)
If you and your spouse are both Singaporean and your spouse owns two properties, the ABSD rate would be 15%. But you own just one property, which means your ABSD rate is 12%.
Since the higher ABSD rate is 15%, that is the percentage that would apply.
What if the property is not residential?
Non-residential properties have a lower BSD rate. And since ABSD is not charged on non-residential properties, the following formula would be used instead:
First $180,000 = 1%
Next $180,000 = 2%
Any amount over that = 3%
For example, if you plan on buying a commercial building for $2,000,000, valued at the same amount, you will calculate your stamp duty in the following way:
(1% of first $180,000 = $1,800) + (2% of next 180,000 = $3,600) + (3% of the remaining $1,640,000 = $49,200) = $54,600
What about properties that have dual uses (residential and commercial), how is the tax determined?
Determining the BSD rates for dual-use properties can get complicated because the rates are different for each type of property.
Very often you will see HDB shops with residential flats upstairs. Also, sometimes business on 1st floor expands and need more space, so the landlord seeks and gains approval for change of use from residential to commercial use for the residential space. This is usually for a limited period of time, like an extension of preschool or enrichment centre on upper floor approved for several years only.
In the first example of a retail shop with a residential flat upstairs, the value of first floor portion will be subject to non-residential BSD rate, whereas the second floor will be subject to residential BSD rate.
In the second example in which a portion of the residence is temporarily being used for a commercial purpose, you will continue to be obligated for the residential rate. If you’re not sure, find out how the property is zoned. If the zoning is residential, that would be the rate that applies, whether or not you’re using part of it for your business. Check with the latest URA masterplan for zoning of the land where the property is seated. Because this can get complicated, it’s important that you get an experienced agent from Lands Way Real Estate to verify these numbers before signing a purchase agreement.
Stamp Duty for Property Sellers
Seller’s Stamp Duty (SSD)
A property seller is obligated to pay SSD Singapore upon the sale of the property if it is within three years of owning the property. However, SSD only applies if the seller purchased a residential property less than four years ago.
Seller SSD is paid to the Inland Revenue Authority of Singapore (IRAS) after being implemented in 2010 to dissuade people from the practice of flipping houses for profit. IRAS felt that if ignored, property flipping could become so widespread that the demand would drive prices up so much that a bubble would result. This is why they introduced the Sellers SSD.
Furthermore, SSD applies if property is acquired through the transfer of property in a divorce settlement (Stamp Duties (Matrimonial Proceedings) Remission Rule), an HDB flat changing ownership within a family (Stamp Duties (Transfer of HDB Flat Within Family) Remission Rule), or through an inheritance.
If you own an HDB flat and want to sell if after owning it for at least five years, which is the Minimum Occupation Period (MOP), you will not be liable for SSD.
IRAS has a comprehensive table of Seller’s Stamp Duty rates on their website, which we’ve compiled below for easy reference.
If you bought property before 14 January 2011, Seller’s SSD does not apply as the three-year holding period has already passed.
If you bought property between 14 January 2011 and 10 March 2017, the following rates apply:
If you bought property on or after 11 March 2017, the following rates apply:
You can calculate your total SSD obligation by applying the appropriate rate on selling price or current market value, whichever is higher.
As you can see on the chart above, the following factors also figure into the total SSD that you will be obligated to pay:
- Date of transaction
- Applicable SSD percentage
- Holding period
Also, keep in mind that the earlier your property is sold, the higher your SSD rate.
The following hypothetical example will give you a better understanding of how SSD works:
Linda purchased her residence on 30 May 2019.
She then went on to sell it for $2,000,000 on 9 April 2020. Since she held the property for less than one year, her SSD rate was 12%.
Thus, Linda’s SSD rate would be calculated as follows:
Note: Do you want to use the name Linda or Marie because here you use both. See first sentence in your original in RED and compare with your last sentence above in RED. I used Linda, but if you want to use Marie, please change it accordingly.
$2,000,000 x 12% = $240,000
It is abundantly clear that SSD can add up quickly, especially on highly priced properties. So, make sure that you find out what your SSD will be before putting your property on the market.
If you expect to make a profit on the sale of your residential property, make sure that you consider the SSD you will be charged.
Are there any exemptions from Seller’s Stamp Duty?
Yes, there are certain situations in which you will not be obligated to pay SSD.
According to the IRAS, residential property sellers will not be obligated to pay SSD if the following conditions apply:
- Licensed residential developers controlled by the Housing Developers (Control & Licensing) Act are not obligated for SSD when they sell the residential properties that they themselves developed.
- Governmental authorities, like HDB or JTC, when carrying out their duties are not obligated to pay SSD when residential properties under their control are sold.
- Residential property owners are not obligated for SSD if they sell their property to the Government in compliance with the Land Acquisitions Act.
- Bankrupt individuals being forced to sell their residential properties as part of their bankruptcy proceedings are not obligated to pay SSD on these sales.
- Companies selling the residential properties they own are not obligated to pay SSD when these properties are sold as part of an involuntary shut down of their business.
- Foreigners are not obligated to pay SSD when they are forced to sell the residential properties that they own in order to comply with the Residential Properties Act.
- HDB flat transferors or sellers who somehow acquired or purchased their HDB flats on or after 30 August 2010 if their flats have been chosen for the Selective Enbloc Redevelopment Scheme, but they manage to sell their flats themselves on the open market prior to HDB claiming them.
- HDB flat transferors or sellers who are forced to turn their flats back over to HDB because HDB has repossessed it or because of SERS.
- Someone who already owns an HDB flat and inherits another HDB flat who is forced to dispose of one of them does not have to pay SSD on the sale. This exemption only applies to flats disposed of on or after 18 December 2015.
- Someone who inherits an HDB flat but already owns a non-HDB flat, who is forced to dispose of the HDB flat they inherited due to HDB rules and regulations. This exemption only applies to flats disposed of on or after 18 December 2015.
- Someone who owns an HDB flat and then gets married to someone who also owns an HDB flat. This married couple must dispose of one of their HDB flats as per HDB rules and regulations. This exemption only applies to flats disposed of on or after 18 December 2015.
Stamp Duty on Rentals
Finally, those who rent or lease property in Singapore are required to pay stamp duty (tax) on the total amount of rental. Their stamp duty is due and payable when the property is initially rented or leased and upon renewing or extending their rental or lease agreement.
How much is the stamp duty?
The stamp duty amount depends on what the Average Annual Rent (AAR) is. This is calculated using the monthly rent and the length of the lease. Let’s take a look at a typical lease in Singapore, which is for a fixed rent. The stamp duty is calculated on the duty rates for a leased property, which would be 0.40% of the full amount of rent being charged for the duration of the lease. This means that the longer the lease period, the more money would be owed in stamp duty.
If the rent is $2,000 per month, here is how you would calculate the stamp duty:
Total rent for 12 months
Stamp Duty Rate
Stamp Duty Payable
Who pays for the Stamp Duty on Tenancy Agreement?
The stamp duty for rental agreements is usually the obligation of the tenant. However, this can sometimes be negotiated, and the landlord will agree to pay the stamp duty. When an agreement is reached, the tenant is advised to insist that the person responsible for paying the stamp duty be named in their tenancy agreement. This will avert any possible dispute.
Should a dispute arise about who is responsible for paying the rental stamp duty and the tenancy agreement fails to spell this out, IRAS will adhere to what’s stated in the Third Schedule of the Stamp Duties Act. This spells out the stamp duty Singapore rental requirements. This Act is something tenants should get familiar with by consulting with an experienced real estate agent.
When must you pay for the Stamp Duty?
Stamp duty is required to be paid within two weeks (14 days) of signing the Tenancy Agreement, Sale & Purchase Agreement or Option to Purchase Agreement. This is unless the agreement was signed overseas. Should this be the case, the time period will be extended from 14 days to 30 days.
Keep in mind that if you are buying residential property, you can pay the BSD with your CPF. But you will still need to come up with the money to pay it although you will be entitled to a refund of your CPF amount from selling your property. However, your refund won’t arrive before it comes time for you to pay the stamp duty.
If you are late paying the stamp duty you will be fined. If you pay within three months, the fine will be $10 or the amount of BSD owed, whichever is higher. So, you can be sure it will be more than $10. If three months goes by and you still haven’t paid, the fine will be $25, or the amount of the BSD times four, whichever is higher. And you can be sure it will be more than $25, so it would be smart to NOT be late.
How can you pay for the stamp duty (i.e. BSD, ABSD, SSD, and Stamp Duty on Tenancy Agreement)?
Your conveyancing attorney can handle your BSD, ABSD, and SSD on your behalf. If you are entering a Tenancy Agreement, you have the option to pay stamp duty online by using the e-stamp button through the IRAS’ e-stamping portal. You can also ask your real estate agent to handle all of this for you.
You can quickly pay stamp duty online with FAST, which works for DBS/POSB accounts, GIRO, eNETS, or AXS. If you owe less than $2,000 or an amount that doesn’t go beyond your daily withdrawal limit, it will require an Internet bank account with Citibank, Standard Chartered Bank, OCBC, UOB or DBS/POSB. You must pay your stamp duty in full as instalment payments are not allowed.