Buyer’s Stamp Duty And Additional Buyer’s Stamp Duty

Stamp Duty And Additional Buyer Stamp Duty
Stamp Duty

Whenever a property is purchased or leased in Singapore, the buyer is liable to pay a specific kind of tax in order to legally validate their purchase. This tax is known as stamp duty. The significance of stamp duty can be judged by the fact that without its payment, a legal document of purchase cannot be presented in the court of law as evidence in case a disagreement between two parties occurs. Furthermore, the use of a document on which stamp duty has not been paid is a serious legal offence.

For purchases of property that are contracted within Singapore, buyers are allowed a period of 14 days to pay the stamp duty that is applicable on their documents, namely the Sales & Purchase Agreement (S&P). For purchases of property signed outside of Singapore, buyers can pay the applicable stamp duty within a period of 30 days. Stamp duty to be paid is based on the actual price or market price of the property, whichever is higher.

 

Buyer’s Stamp Duty (BSD):

The Buyer’s Stamp Duty (BSD) is borne by the buyer when he purchases a property. The SD is calculated based on the purchase price of the property. On the first S$180,000, 1% of stamp duty is applicable. On the second S$180,000, 2% of stamp duty is applicable and 3% is applicable on the remaining amount of the purchase price of the property.

 

Additional Buyer’s Stamp Duty (ABSD):

There is also a concept of Additional Buyer’s Stamp Duty (ABSD) that was legislated on the 7th of Dec 2011 to restrict the unfavorable acceleration in the property industry. The figures were subsequently revised on 12 Jan 2013 in the upward direction to cool the hot Singapore property market further. The ABSD to be paid differs among certain groups of individuals who wish to purchase Singapore residential properties. The following table describes the applications of ABSD on different types of buyers in different situations.

 

Buyers Citizen Type Rate of 1st Property Purchased Rate of 2nd Property Purchased Rate of 3rd and subsequent Property Purchased
Singapore Citizen NA 7% 10%
Singapore Permanent Resident 5% 10% 10%
Foreigners & Non – Individuals 15% 15% 15%

 

To understand the concepts of BSD and ABSD, here’s an illustration. We can consider a case where a Singapore Permanent Resident already owns a residential property and intends to buy a second residential property. The second property purchased is for S$1.5 million. The calculations for the amount of Total Stamp Duty payable for such a buyer are given below:

1.   Buyer’s Stamp Duty (BSD) Payable:

First S$180,000 180,000 * 1% S$1800
Second S$180,000 180,000 * 2% S$3600
Remainder of Purchase Price 11,40,000 * 3% S$34,200
Buyer’s Stamp Duty payable S$39,600

 

2.   Additional Buyer’s Stamp Duty (ABSD) Payable:

ABSD = S$1,500,000 * 10%

= S$150,000

Total Stamp Duty Payable = 150,000 + 39,600

= S$189,600

 

An ABSD rate of 10% was applicable on the entire amount of the property as the purchase was made by a Singapore Permanent Resident. Had the buyer been a Singapore citizen, the applicable rate for ABSD on his second residential property would have been 7%.

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