Whether you’ve bought or sold a home, chances are you’ve come across the tax that’s levied on real estate transactions, otherwise known as BSD, ABSD and SSD.
Buying and selling residential property in Singapore (especially if we’re talking about owning multiple properties) means having to deal with paying tax — buyer’s stamp duty (BSD), seller’s stamp duty (SSD) and additional buyer’s stamp duty (ABSD) to be exact.
If you’re wondering why there are more costs involved with buying property, it could all boil down to the introduction of property cooling measures designed to quell demand and limit the rise of buying-and-selling – also known as flipping properties to make a profit.
As you could already guess from the headline, the stamp rate depends on who you are in the property transaction. Here we’ll take a closer look at the different acronyms that permeate our real estate transactions and how much these taxes can potentially add up to.
Buyer’s Stamp Duty (BSD)
Who needs to pay buyer’s stamp duty?
There’s no other way around it — when you’re buying a property in Singapore, BSD will be levied on your purchase. The rate is dependent on the purchase price or market value of the property, whichever is higher.
|Purchase price or market value of the residential property||BSD rates (before 20 Feb 2018)||BSD rates (on or after 20 Feb 2018)|
How to calculate BSD payable
Here’s what your BSD calculation could look like if you’re buying a 4-room HDB resale flat at $500,000 in 2021.
|Purchase price or market value of the residential property||BSD rates (on or after 20 Feb 2018)||Amount|
|First $180,000||1%||$180,000 x 1% = $1,800|
|Next $180,000||2%||$180,000 x 1% = $1,800|
|Next $140,000||3%||$140,000 x 3% = $4,200|
Based on the calculations above, your BSD payable adds up to = $1,800 + $1,800 + $4,200 = $7,800
Additional Buyer’s Stamp Duty (ABSD)
Who needs to pay additional buyer’s stamp duty?
This stamp duty applies to you if you’re buying your second (or subsequent) property. Yes, this means you’ll have to pay ABSD on top of the initial BSD. The ABSD amount is based on the valuation or the property’s selling price, whichever is higher.
It’s worth noting that the buyer’s nationality plays an important role here. That can mean the difference between a 12% ABSD for a Singapore citizen’s second property compared to a PR’s 15% ABSD for their second property.
However, if you’re eligible, you can choose to apply for ABSD remission that exempts you from having to fork out the hefty ABSD payment.
Who is eligible for ABSD remission?
According to IRAS, you could potentially qualify for ABSD remission if the following scenarios apply to you are:
- A married couple (consisting of a Singaporean citizen and a foreigner) who’s buying your first property through a joint purchase (i.e. the house is under both names only)
- A married couple (consisting of a Singaporean citizen and a foreigner) selling off your first property (in order to stay in your next property) within six months after the Temporary Occupation Permit (TOP) or Certificate of Statutory Compliance (CSC) is issued. Caveat: the newly bought property must not be completed yet and there must be no plans to buy any subsequent properties.
|Property type||Buyer type||ABSD rates (from 8 Dec 2011 to 11 Jan 2013)||ABSD rates (from 12 Jan 2013 to 5 Jul 2018)||ABSD rates on or after 6 Jul 2018|
|First property||Singapore citizen||NA||NA||NA|
|Second property||Singapore citizen||NA||7%||12%|
|Third and subsequent property||Singapore citizen||3%||10%||15%|
|First property||Singapore permanent resident||NA||5%||5%|
|Second and subsequent property||Singapore permanent resident||3%||10%||15%|
|Any residential property||Foreigner||10%||15%||20%|
|Any residential property||Entity||10%||15%||25%|
How to calculate the ABSD payable
Let’s say you’re buying your second property in 2021, which was valued at $800,000 but sold at $850,000.
ABSD payable = $850,000 x 12% = $102,000
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Seller’s Stamp Duty (SSD)
Who needs to pay seller’s stamp duty?
Applicable to residential properties purchased on or after 20 Feb 2010, SSD applies to you if you’re selling off a property within three years of purchasing it.
Simply put, the shorter the holding period, the higher the SSD rate. SSD might also be applicable if the property changed hands through transfer of ownership, divorce or inheritance.
|Holding period||SSD Rate|
|Up to 1 year||12%|
|More than 1 year and up to 2 years||8%|
|More than 2 years and up to 3 years||4%|
|More than 3 years||NA|
*SSD rate applies to properties purchased on and after 11 Mar 2017
How to calculate the SSD payable
Let’s say you’ve sold your condo at $2,500,000 after one and a half years.
Since the holding period is just under 2 years, you’ll be subjected to the 8% SSD rate
SSD payable = $2,500,000 x 8% = $200,000
Be sure to include the stamp duties in your financial planning if they apply to you. For instance, it is important to factor in the SSD early as it’ll have a direct impact on your sale proceeds. Pro tip: to make things easier, forego the manual calculations and tinker with the Inland Revenue Authority of Singapore’s (IRAS) online stamp duty calculators to find out the exact amount you’ll need to pay.
Read these next:
Buying A HDB Resale Flat: How To Minimise Cash Over Valuation (COV)
Property Tax, Explained: Annual Value, Tax Rate And How To Make Payment
How To Buy A House In Singapore: A Complete Guide (2021)
7 Popular Types Of Investment In Singapore (And Tips To Use Them For Optimal Gains)
Guide To Property Investment In Singapore