“..but in this world nothing can be said to be certain, except death and taxes.” – Benjamin Franklin
True words, and with that, we will be delving into the world of taxes in the Singapore property market.
Singapore is a highly-regulated market in which its behaviour is thoroughly managed by authorities to ensure the Singapore property market is stable and offers good value.
This comprehensive approach has consequentially created a series of rules and regulations which states the do’s and do not’s and of course the costs and fees involved. As part of this approach to influence the market – taxes are being used to obtain the result desired. Using taxes to obtain required results is a method used in ages past; an obviously time-tested and effective method.
When it comes to purchasing of properties in Singapore – there are couple of taxes to take note of.
1. Buyer Stamp Duty
Buyer Stamp Duty (BSD) is required for all kinds of property purchase in Singapore – be it HDB, EC, private condo, landed or commercial. BSD is computed based on the purchase price or market value of the property, whichever is higher, and it is computed based on a tiered approach.
Prior to 20th Feb 2018, the BSD rates are up to 3%. From 20th Feb 2018 to 14th Feb 2023, all residential properties will be taxed up to 4%. From 15th Feb 2023 onwards, residential properties will be taxed up to 6%.
Before 20th Feb 2018
Based on Purchase Price / Market Value of Property, whichever is higher
Rates:
First $180,000 - 1%
Next $180,000 - 2%
Remaining Amount - 3%
From 20th Feb 2018 to 14 Feb 2023
Based on Purchase Price / Market Value of the Property, whichever is higher
Rates:
First $180,000 - 1%
Next $180,000 - 2%
Next $640,000 - 3%
Remaining Amount - 4%
On or After 15 Feb 2023
Based on Purchase Price / Market Value of the Property, whichever is higher
Rates:
First $180,000 - 1%
Next $180,000 - 2%
Next $640,000 - 3%
Next $500,000 - 4%
Next $1,500,000 - 5%
Remaining Amount - 6%
Couple of examples:
1. Purchasing a HDB flat that costs $320,000:
First $180,000: $180,000 * 1% = $1,800 Next $140,000: $140,000 * 2% = $2,800
Total BSD payable – $1,800 + $2,800 = $4,600
2. Purchasing a private condominium at $2,000,000:
First $180,000: $180,000 * 1% = $1,800 Next $180,000: $180,000 * 2% = $3,600 Next $640,000: $640,000 * 3% = $19,200 Next $500,000: $500,000 * 4% = $20,000
Next $500,000: $500,000 * 5% = $25,000
Total BSD payable – $1,800 + $3,600 + $19,200 + $20,000 + $25,000 = $69,600
2. Additional Buyer Stamp Duty
Additional Buyer Stamp Duty (ABSD) was introduced on 8th Dec 2011 and it was a game-changer in the Singapore property market. It had almost single-handedly tempered the speculative buying and overheating of the property market with the additional costs introduced. Of course, more revisions came long in the following years as the Government continuously revised and assessed its impact in an ever-changing market.
While we may all complain about ABSD making property purchases so expensive, we can’t deny it did help to stabilise the market and give it the sustainable growth we have seen.
ABSD is a fixed percentage of tax depending on the status of the buyer and the number of properties the buyer is currently holding. It is computed based on the purchase price or market value, whichever is higher.
Profile of Buyer | ABSD Rates from 8 Dec 2011 to 11 Jan 2013 | ABSD Rates from 12 Jan 2013 to 5 Jul 2018 | ABSD Rates from 6 Jul 2018 to 15 Dec 2021 | ABSD Rates on or after 16 Dec 2021 |
Singapore Citizens (SC) buying first residential property | Not applicable | Not applicable | Not applicable | Not applicable |
SC buying second residential property | Not applicable | 7% | 12% | 17% |
SC buying third and subsequent residential property | 3% | 10% | 15% | 25% |
Singapore Permanent Residents (SPR) buying first residential property | Not applicable | 5% | 5% | 5% |
SPR buying second residential property | 3% | 10% | 15% | 25% |
SPR buying third and subsequent residential property | 3% | 10% | 15% | 30% |
Foreigners (FR) buying any residential property | 10% | 15% | 20% | 30% |
Entities buying any residential property | 10% | 15% | 25% (Plus Additional 5% for Housing Developers (non-remittable) | 35% (Plus Additional 5% for Housing Developers (non-remittable) |
So, if you are a foreigner looking to purchase a property here in Singapore – be prepared to fork out an additional 30% on your purchase price!
Purchasing Can Be Expensive!
The BSD and ABSD can definitely impact the affordability of housing for you. The BSD is required regardless – however, depending on your count of residential properties under your name and your status, the ABSD may be avoided or minimised.
Hope this helps!
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