On April 26, 2023, the Singapore government announced a new round of property cooling measures, which includes an increase in the Additional Buyer’s Stamp Duty (ABSD) rates. The revised ABSD rates will take effect from April 27, 2023.
The following are the changes to the ABSD rates:
- For Singaporeans buying their second residential property, the ABSD rate will be raised from 17% to 20%.
- For Singaporeans buying their third and subsequent residential properties, the ABSD rate will be raised from 25% to 30%.
- For Permanent Residents buying their second residential property, the ABSD rate will be raised from 25% to 30%.
- For foreigners buying any residential property, the ABSD rate will be raised from 35% to 65%.
The government has said that the increase in ABSD rates is necessary to “promote a sustainable property market”. The government has also said that the changes are targeted at “cooling demand from investors and speculators”.
The increase in ABSD rates is likely to have a significant impact on the property market in Singapore. It is expected to reduce demand for residential properties, particularly from investors and speculators. This could lead to a slowdown in the pace of price growth in the property market.
What is ABSD?
ABSD stands for Additional Buyer’s Stamp Duty. It is a tax that is imposed on the purchase of residential property in Singapore. The purpose of ABSD is to cool the property market and to discourage speculation.
Additional Buyer’s Stamp Duty (ABSD) is a tax that is levied on top of the standard Buyer’s Stamp Duty (BSD) when buying a residential property in Singapore. It is imposed on all buyers, regardless of their nationality or residency status, except for first-time homebuyers. The amount of ABSD payable depends on the buyer’s profile and the number of properties they own.
ABSD Exemption
There are some exemptions from ABSD, such as when the property is bought for the purpose of rental or for the purpose of redevelopment. There are also some reliefs from ABSD, such as when the property is bought by a married couple or when the property is bought by a family member.
The ABSD is a significant cost that must be considered when buying a residential property in Singapore. It is important to factor in the ABSD when making an offer on a property and when calculating the total cost of ownership.
Why was ABSD Introduced?
Here are some of the reasons why the government introduced the ABSD:
- To cool the property market and prevent prices from rising too quickly.
- To discourage speculation and investment in the property market.
- To make it more expensive for people to own multiple properties.
- To encourage people to live in their properties instead of leaving them empty.
The ABSD has been effective in cooling the property market. However, it has also been criticized for being too harsh and for discouraging people from buying homes. The government has said that it is monitoring the impact of the ABSD and that it is willing to make changes if necessary.
It is important to note that the ABSD is not the only factor that will affect the property market in Singapore. Other factors, such as the state of the economy, interest rates, and government policies, will also play a role.
Who is liable for ABSD?
ABSD is payable by the buyer of the residential property. If the buyer is a company, then ABSD is payable by the company.
What are the rates of ABSD?
The rates of ABSD are as follows:
- For Singaporean citizens and Permanent Residents who own at least one residential property, ABSD is payable at the following rates:
- 5% if the purchase price is below S$1 million
- 10% if the purchase price is between S$1 million and S$2 million
- 15% if the purchase price is above S$2 million
- For foreigners, ABSD is payable at the following rates:
- 20% if the purchase price is below S$1 million
- 30% if the purchase price is between S$1 million and S$2 million
- 40% if the purchase price is above S$2 million
What are the exemptions and reliefs from ABSD?
There are a number of exemptions and reliefs from ABSD. These include:
- Exemptions:
- The purchase of a first residential property by a Singaporean citizen or Permanent Resident who does not own any other residential property.
- The purchase of a residential property by a Singaporean citizen or Permanent Resident who is aged 55 years or above and who does not own any other residential property.
- Reliefs:
- A married couple can apply for a relief of up to S$1 million on the purchase of their first residential property.
- A Singaporean citizen or Permanent Resident who is a first-time homebuyer can apply for a relief of S$30,000 on the purchase of their first residential property.
How do I pay ABSD?
ABSD can be paid in cash, by cheque, or by electronic funds transfer. ABSD must be paid within 14 days of the date of the sale and purchase agreement.
When is ABSD payable?
ABSD is payable on the date of the sale and purchase agreement. If the sale and purchase agreement is executed overseas, then ABSD is payable within 30 days of the date the agreement is received in Singapore.
If you are interested in property sales in Singapore, it is important to factor in the impact of the ABSD and other factors when making your decision.
