Real estate stamp duty is a tax that is levied on documents related to the purchase or lease of a property. In Singapore, there are two types of stamp duty: buyer’s stamp duty (BSD) and seller’s stamp duty (SSD). In this article, we will focus on buyer’s stamp duty.
1. Buyer Stamp Duty (BSD)
Buyer stamp duty is a tax that is levied on the buyer of a property. The amount of BSD that you have to pay depends on the purchase price or market value of the property, whichever is higher. The BSD rates for residential properties are as follows:
Buyer Stamp Duty (BSD) Formula
| Residential | Non-Residential |
| 1% for the first $180,000 | 1% for the first $180,000 |
| 2% for the next $180,000 | 2% for the next $180,000 |
| 3% for the next $640,000 | 3% for the next $640,000 |
| 4% for the next $500,000 | 4% for the next $500,000 |
| 5% for the next $1,500,000 | 5% for remaining amount |
| 6% for remaining amount |
Lets do some BSD Calculations
We will do some sample calculation base on Residential properties since is the most common in Singapore.
| Residential | ||
| Less than $1mil | Purchase Price: $450,000 1% of the first $180,000 = $1,800 2% of the next $180,000 = $3,600 3% of the remaining $450,000 – $180,000 – $180,000 = $2700 Total BSD payable = $8,100 Simplified formula: 3% of $860,000 – $5,400 = $8,100 | Purchase Price: $860,000 1% of the first $180,000 = $1,800 2% of the next $180,000 = $3,600 3% of the remaining $860,000 – $180,000 – $180,000 = $15,000 Total BSD payable = $20,400 Simplified formula: 3% of $860,000 – $15,400 = $20,400 |
| $1mil to $1.5mil | Purchase Price: $1mil 1% of the first $180,000 = $1,800 2% of the next $180,000 = $3,600 3% of the next $640,000 = $19,200 4% of the remaining $1 million – $180,000 – $180,000 – $640,000 = $0 Total BSD payable = $24,600 Simplified formula: 4% of 1 million – $15,400 = $24,600 | Purchase Price: $1.3mil 1% of the first $180,000 = $1,800 2% of the next $180,000 = $3,600 3% of the next $640,000 = $19,200 4% of the remaining $1.3 million – $180,000 – $180,000 – $640,000 = $0 Total BSD payable = $36,600 Simplified formula: 4% of 1.3 million – $15,400 = $36,600 |
| $1.5mil to $3mil | Purchase Price: $2mil 1% of the first $180,000 = $1,800 2% of the next $180,000 = $3,600 3% of the next $640,000 = $19,200 4% of the next $500,000 = $20,000 5% of the remaining $2 million – $180,000 – $180,000 – $640,000 – $500,000 = $25,000 Total BSD payable = $69,600 Simplified formula: 5% of 2 million – $30,400 = $69,600 | Purchase Price: $2.3mil 1% of the first $180,000 = $1,800 2% of the next $180,000 = $3,600 3% of the next $640,000 = $19,200 4% of the next $500,000 = $20,000 5% of the remaining $2.3 million – $180,000 – $180,000 – $640,000 – $500,000 = $40,000 Total BSD payable = $84,600 Simplified formula: 5% of 2 million – $30,400 = $69,600 |
| Above $3mil | Purchase Price: $3.5mil 1% of the first $180,000 = $1,800 2% of the next $180,000 = $3,600 3% of the next $640,000 = $19,200 4% of the next $500,000 = $20,000 5% of the next $1,500,000 = $75,000 6% of the remaining $3.5 million – $180,000 – $180,000 – $640,000 – $500,000 – $1,500,000 = $30,000 Total BSD payable = $149,600 Simplified formula: 6% of 3.5 million – $60,400 = $149,600 | Purchase Price: $5.4mil 1% of the first $180,000 = $1,800 2% of the next $180,000 = $3,600 3% of the next $640,000 = $19,200 4% of the next $500,000 = $20,000 5% of the next $1,500,000 = $75,000 6% of the remaining $5.4 million – $180,000 – $180,000 – $640,000 – $500,000 – $1,500,000 = $144,000 Total BSD payable = $263,600 Simplified formula: 6% of 5.4 million – $60,400 = $263,600 |
2. Additional Buyer Stamp Duty
Additional Buyer’s Stamp Duty (ABSD) is a tax imposed on residential property purchases in addition to buyer stamp duty (BSD) mentioned above. Its an extra tax impose on owners buying their second or subsequent properties.
The primary objective behind the implementation of ABSD is to regulate property demand, especially in markets experiencing rapid price escalation. It is a tool used by our government to discourage property speculation, cool down overheated markets, and ensure that property ownership remains accessible to a broad spectrum of the population.
Do note that ABSD only affect residential properties and does not apply to commercial and industrial properties.
ABSD only applies to the following categories of buyers
- Foreigners
- Permanent residents (PRs) buying their first and subsequent residential properties
- Singapore citizens buying their second and subsequent residential properties
- Residential properties bought under Trust
- Entities (Companies and Associations) buying residential properties
Additional Buyer Stamp Duty (ABSD) Rates
| No of Property | 1st | 2nd | 3rd onwards |
| Singapore Citizens | 0% | 20% | 30% |
| Permanent Resident | 5% | 30% | 35% |
| Foreigner | 60% | 60% | 60% |
| Trust Buying | 65% | 65% | 65% |
| Entities | 65% | 65% | 65% |
Lets do some ABSD Calculations
We will do some ABSD calculation for you to understand.
| Residential | |
| Singapore Citizen buy 1st property ABSD rate = No ABSD Purchase Price: $650,000 1% of the first $180,000 = $1,800 2% of the next $180,000 = $3,600 3% of the remaining $650,000 – $180,000 – $180,000 = $8,700 BSD payable = $14,100 ABSD payable = $0 Total Tax payable = BSD + ABSD = $14,100 | Permanent Resident (PR) buy 1st property ABSD rate = 5% Purchase Price: $650,000 1% of the first $180,000 = $1,800 2% of the next $180,000 = $3,600 3% of the remaining $650,000 – $180,000 – $180,000 = $8,700 BSD payable = $14,100 ABSD payable = 5% of $650,000 = $32,500 Total Tax payable = BSD + ABSD = $46,600 |
| Singapore Citizen buy 2nd property ABSD rate = 20% Purchase Price: $2mil 1% of the first $180,000 = $1,800 2% of the next $180,000 = $3,600 3% of the next $640,000 = $19,200 4% of the next $500,000 = $20,000 5% of the remaining $2 million – $180,000 – $180,000 – $640,000 – $500,000 = $25,000 BSD payable = $69,600 ABSD payable 20% of 2,000,000 = $400,000 Total Tax payable = BSD + ABSD = $469,000 | Foreigner buy property ABSD rate = 60% Purchase Price: $2mil 1% of the first $180,000 = $1,800 2% of the next $180,000 = $3,600 3% of the next $640,000 = $19,200 4% of the next $500,000 = $20,000 5% of the remaining $2 million – $180,000 – $180,000 – $640,000 – $500,000 = $25,000 BSD payable = $69,600 ABSD payable = 60% of 2,000,000 = $1,200,000 Total Tax payable = BSD + ABSD = $1,269,600 |
The implications of ABSD on property transactions are significant and can impact the financial feasibility of a purchase. Buyers need to factor in the additional cost of ABSD when budgeting for a property, as it can substantially increase the overall purchase price. Understanding the ABSD rates and exemptions applicable in a specific jurisdiction is crucial for making informed decisions in the property market.
3. Seller Buyer Stamp Duty
Seller’s Stamp Duty (SSD) is a tax that is levied on the seller of a residential property in Singapore. It is payable on all residential properties and lands that are acquired on or after 20 Feb 2010 and disposed of within the holding period. The holding period is the duration between the date of purchase and the date of sale or disposal of the property. The SSD rates, dates, and types of property determine the liability and amount of SSD.
The primary objective of SSD is to discourage short-term property speculation and promote a stable property market. SSD is applicable to all residential properties, including HDB (Housing and Development Board) flats, private condominiums, and landed properties.
The SSD rates for residential properties are as follows:
- 12% if the property is sold within the first year of purchase
- 8% if the property is sold within the second year of purchase
- 4% if the property is sold within the third year of purchase
Lets do some SSD Calculations
We will do some SSD calculation for you to understand.
| Residential | |
| Sell property on the 6th months from date of Sale and Purchase Agreement Holding Period = 6 months SSD rate = 12% Selling Price: $1,000,000 SSD Payable: 12% of $1,000,000 = $120,000 | Sell property on the 14th month from date of Sale and Purchase Agreement HHolding Period = 1 Year 2 months SSD rate = 8%/strong> SSelling Price: $1,000,000 SSD Payable: 8% of $1,000,000 = $80,000 |
| Sell property on the 30th months from date of Sale and Purchase Agreement Holding Period = 2 years 4 months SSD rate = 4% SSelling Price: $1,000,000 SSD Payable: 4% of $1,000,000 = $40,000 | Sell property on the 40th months from date of Sale and Purchase Agreement Holding Period = 3 years 4 months SSD rate = No SSD Selling Price: $1,000,000 No SSD Payable |
A crucial point to highlight regarding Seller’s Stamp Duty (SSD) is that the calculation of the holding period commences from the date specified in the Sales and Purchase Agreement (S&P) and not any other dates, such as the Exercise Date or Option Date. It is imperative to verify and confirm the accurate purchase date through INLIS (Integrated Land Information Service). Failing to obtain the correct date may result in the inadvertent payment of SSD, emphasizing the importance of meticulous attention to detail in property transactions.
It is important to note that SSD is payable within 14 days from the date of the document. If you fail to pay the stamp duty within the stipulated time, you will be charged a late payment penalty of 1% per month on the outstanding duty.
Summary
In conclusion, real estate stamp duty is an important consideration when buying or leasing a property in Singapore. It is important to understand the BSD and ABSD rates and how they are calculated to avoid any surprises during the transaction. If you have any questions about real estate stamp duty, you can refer to the Inland Revenue Authority of Singapore (IRAS) website for more information.
I’m Jerry Han Sin from Propnex, bringing over 15 years of valuable experience as a seasoned agent. Whether you’re considering selling or renting your property, I’m here to assist you every step of the way. My expertise spans both residential and commercial properties, ensuring comprehensive support for all your real estate needs. Backed by a dedicated team, we stand ready to provide the assistance you require for a seamless and successful transaction. Your property journey is important to us, and I’m committed to making it a smooth and rewarding experience for you.
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