Additional Buyer’s Stamp Duty (ABSD) Guide for Singapore Property Buyers (2023)
Hey there, future property owner! So, when you decide to snag a place in Singapore, you're not just handing over the cash. Nope, you've got to deal with something called Buyer's Stamp Duty (BSD) and another tax called Additional Buyer's Stamp Duty (ABSD).
Now, picture this: April 2023 rolls around, and the authorities decide to tweak the ABSD rates. The newsflash? Foreigners now have to shell out double the cash – a whopping 60% instead of the earlier 30%.
Ouch! This marks the third time they've shaken things up since December 2021.
What Are the Current Additional Buyer’s Stamp Duty Rates in Singapore?
For the folks eyeing property as an investment, this is a bit of a bummer. Higher taxes mean you'll be parting with more of your hard-earned money. Some might even be eyeing properties abroad to avoid the pain that ABSD brings. The April 2023 property cooling measures saw hikes with the ABSD percentages shown in the tables below will apply to the property’s purchase price or market value, whichever is higher. Yikes.
Whether you're a local eager to invest or a foreigner peeking at Singapore property, here's the lowdown on ABSD. So, what exactly is ABSD? It's like an extra bill you get after BSD, and it depends on whether your property is more valuable than a pile of gold or not.
Imagine your dream pad is worth $1.1 million, but it's officially valued at $1 million. If you're a Singaporean buying your second home, the ABSD rate is 20%. Crunch the numbers, and you're looking at an extra $220,000 to cough up.
Buying a Property With Someone Else: How Does Additional Buyer’s Stamp Duty Work?
If you're partnering up with someone for your property adventure, be ready for some math gymnastics. If you and your partner have different property profiles, the higher ABSD rate takes the lead. It's like the boss level of stamp duty.
Alright, imagine you and your partner are on the house-hunting adventure in Singapore. Here's the deal: when you're in cahoots with someone, and you've got different property profiles, you might be in for a bit of a tax twist. Brace yourself for the higher Additional Buyer's Stamp Duty (ABSD) rate – it's like the VIP tax level.
Let's break it down with a real-life scenario. You and your spouse, both proud Singaporeans, are gearing up to buy a sweet terrace house. Now, here's the catch: your spouse is the proud owner of not one, but two other properties. You, on the other hand, are stepping into the property ownership game for the first time.
Fast forward to the joint purchase of this dreamy terrace house. Your spouse, with the new addition, becomes the owner of three properties in total. Drumroll, please – the ABSD rate for them? A cool 30%. Now, here's where it gets interesting. Despite this being your inaugural property purchase, the ABSD payable is tagged to your spouse's property profile. So, you guessed it – you'll be dancing to the same 30% ABSD tune.
In a nutshell, it's like getting VIP tickets to the ABSD tax party when you're in cahoots with someone. Just remember, the higher ABSD rate takes center stage, and your tax bill might come with a plus-one. House hunting, tax style – who said it can't have a plot twist?
Why Was ABSD Introduced?
Now, let’s rewind to why ABSD even exists. Back in 2011, it was introduced to cool down the property craze. Over the years, they kept tweaking it, especially in 2023 when foreigners felt the pinch with that hefty 60% rate.
But hey, there's some good news for first-time local buyers and PRs snagging their first home – no change in their 5% ABSD tax.
Feeling a bit overwhelmed? Don’t worry; ABSD can be avoided so long as you’ve play the game by the rules. For example, if you're already selling your old place when you decide to buy a new one, or if you're downsizing from a fancy spot to an HDB flat.
Oh, and here's a tip: PropertyGuru Finance has a handy calculator To help you figure out just how much of your equity is going towards stamp duty, you can simply check out the various Finance calculators available online.
Now, let’s talk about paying up. You've got 14 days from signing on the dotted line to cough up the ABSD cash. And no, you can't spread it out – it's a lump sum deal. If you're feeling savvy, you can even dip into your CPF to ease the pain.
Remember, it's not just about buying property; it's about understanding the tax tango that comes with it. If you have any other queries you’d like to get answers to; hit us up for a coffee and conversation at our Contact Us page just at the top right of our website!
Stay informed, future homeowner!
Disclaimer: The information is provided for general information only. ALTA makes no representations or warranties in relation to the information, including but not limited to any representation or warranty as to the fitness for any particular purpose of the information to the fullest extent permitted by law. While every effort has been made to ensure that the information provided in this article is accurate, reliable, and complete as of the time of writing, the information provided in this article should not be relied upon to make any financial, investment, real estate or legal decisions. Additionally, the information should not substitute advice from a trained professional who can take into account your personal facts and circumstances, and we accept no liability if you use the information to form decisions.
