Additional Buyer’s Stamp Duty (ABSD): What Is ABSD In Singapore? What Are The Rates? (2024)

The Inland Revenue Authority of Singapore (IRAS) just clawed back S$60 million from private property buyers. The reason? Tax avoidance. Some 166 property buyers made use of the 99-1 loophole to reduce the Additional Buyer’s Stamp Duty (ABSD) they have to pay.

For some of us, this term may be new. You’re probably more familiar with Buyer’s Stamp Duty (BSD), which is a tax on property. You’re obliged to pay IRAS a certain sum in BSD each time you buy a property.

But under certain conditions, such as being a foreigner or owning another property, you get slapped with ABSD too. This stamp duty is paid on top of BSD and was introduced as part of the cooling measures to stop overzealous buyers from overheating the property market.

If 166 property buyers in Singapore went out of their way to avoid ABSD, how much does this add to the price tag of your property? Let’s find out.

 

What is stamp duty in Singapore?

According to the Ministry of Finance, stamp duty is a type of tax that you pay for the houses and any other commercial properties you own. You also have to pay stamp duty if you’re selling your house, for stocks, and shares as well.

If you are Singaporean and you own a house in Singapore, you pay the basic and lower Buyer’s Stamp Duty. If you own more than one house in Singapore, you’ll need to pay the Buyer’s Stamp Duty and an Additional Buyer’s Stamp Duty.

If you’re a Permanent Resident or a foreigner, you pay the Buyer’s Stamp Duty and Additional Buyer’s Stamp Duty for all the properties you own.

 

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%
Next $50,000	4%	4%
Next $1,500,000	5%	5%
Remaining Amount	6%	–

Source: IRAS

As you can see, the more expensive your property, the higher the overall BSD rate you’ll be forced to pay. So, buyers looking at multi-million dollar properties in Sentosa Cove—even after the recent price slash—take note.

 

Additional Buyer’s Stamp Duty (ABSD) Singapore

In addition to the BSD, there is also the Additional Buyer’s Stamp Duty (ABSD).

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 1 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, according to the latest ABSD rates announced in Apr 2023:

Additional Buyer’s Stamp Duty	ABSD rate
Singapore citizen buying your 1st residential property	0%
Singapore citizen buying a 2nd residential property	20%
Singapore citizen buying a 3rd and subsequent residential property	30%
PR buying a 1st residential property	5%
PR buying a 2nd and subsequent residential property	30%
PR buying a 3rd and subsequent residential property	35%
Foreigner buying any residential property	60%
Transfer residential property into a living trust / Entities buying any residential property	65%

Source: IRAS

As you can see, the ABSD rates make the BSD ones look like peanuts. Especially the rates for foreigners—60%?! What even is that!

By the way, the answer is 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.

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ALSO READ: What Is The Additional Buyer’s Stamp Duty (ABSD) 99-1 Loophole in Singapore and Is It Illegal?

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ABSD for all properties transferred into a living trust (May 2022 update)

On 8 May 2022, the government announced that when residential properties are transferred into any living trust, 35% ABSD will be payable even if there is no beneficial owner stated yet.

That was a mouthful. What does that mean? Let’s break it down into layman terms. (This is just for general understanding. Don’t come after us with your YouTube PhD.)

A living trust is somewhat like a will, where you legally entrust your residential property and assets to your family members or people you know. Once you entrust your house to a living trust, such as a will, your trust owns your property.

In the past, you didn’t have to pay ABSD for your property if the house doesn’t have any beneficiary specified in the living trust/ will.

Now, the government wants a hefty 65% ABSD paid for all properties transferred to living trusts even if no one is stated as the beneficiary. The rate follows the same as rate entities are charged for buying any residential property.

So, if you’re drafting a will because you’ve got a HDB, condo, and plan to split them amongst your spouse and children, you might want to take note of this ABSD.

 

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 Temporary Occupancy Permit or Certificate of Statutory Completion (whichever is earlier). See full terms and conditions of ABSD remission on IRAS website.

And by the way, if you’re a young Singaporean couple reading this, you’ll be pleased to know there are several ways in which HDB can help you buy your first home.

 

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.

When the ABSD was introduced, a foreigner who wanted to buy a $2 million property would have had to pay $200,000 (10%) in additional stamp duty.

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 an extra $200,000 for a $2 million property was enough to make even the richest property investors think twice.

However, the ABSD was further increased thrice from then till 2021—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.

ABSD rates for first property	8 Dec 2011 – 11 Jan 2013	12 Jan 2013 to 5 Jul 2018	6 Jul 2018 – 15 Dec 2021	16 Dec 2021 – 26 Apr 2023	On or after 27 Apr 2023
ABSD for Singaporean Citizen	0%	0%	0%	0%	0%
ABSD for PRs	0%	5%	5%	5%	5%
ABSD for foreigners	10%	15%	20%	30%	60%

On 26 Apr 2023, we received the news of the latest ABSD increase. This one doubled the ABSD for foreigners to a whopping 60%! That increases the total cost of a foreigner’s $2 million property to $3.2 million. *faints*

Understandably, this heavily impacted foreign buyers. According to data from the Urban Redevelopment Authority (URA), non-landed private property purchases by foreigners fell 59.2% quarter-on-quarter in Q2 2023.

However,  property experts predicted that the latest ABSD rates announced on 27 Apr 2023 would do little to impact the overall market. True enough, the number of private homeowners in Singapore who intended to buy another properly while retaining their current property didn’t change much—25% in H2 2023 versus 26% in H1 2023. And among property investors, demand actually rose from 36% to 47% in the same period.

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ALSO READ: Guide For Expats Buying Homes In Singapore

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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 ready 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.

 

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