Imagine buying your dream house in Singapore: you checked the price, saved up money for it, and made the purchase. Now, the price goes up by 30%. Ouch.
Well, if you are a Singaporean citizen, the good news for you is that the markup won’t be that high.
The bad news is that there’ll still be a markup.
In this article, we’ll be going through the Additional Buyer Stamp Duty (ABSD) in Singapore – what it is, why we have it, how it works and anything else you need to know.
First off, what is ABSD?
ABSD was introduced in Singapore, back in December 2011 alongside other measures such as tighter loan-to-value limits, increased cash downpayment for second and subsequent homes, as well as stricter income and home loan requirements in Singapore. It was intended to cool down the property market and curb speculation.
Since then, there have been quite a few amendments to the rates, usually increasing the stamp duty for foreigners to discourage them from investing too much in the real estate market, thereby keeping housing affordable for Singaporeans.
As hinted by the name, the ABSD is a type of stamp duty, defined by the Ministry of Finance as “a tax on documents relating to immovable properties, stocks or shares”.
It is also added on top of another stamp duty, the Buyer Stamp Duty (BSD). But why do we need 2 different stamp duties when purchasing the same properties?
Let’s look at that difference.
ABSD vs BSD
The reason why there are two different stamp duties is that they use different measurements and ultimately are targeted at different things.
The BSD is essentially a tax on homes – everyone will pay it whenever they buy a property. The rates are calculated as follows:
| Purchase Price or Market Value of the Property | BSD Rates for residential properties | BSD Rates for non-residential properties |
| First $180,000 | 1% | 1% |
| Next $180,000 | 2% | 2% |
| Next $640,000 | 3% | 3% |
| Next $500,000 | 4% | 4% |
| Next $1,500,000 | 5% | 5% |
| Remaining Amount | 6% | 5% |
As we can see, the rate is pretty uniform for everyone and follows a simple rule: the more expensive your property is, the more you’ll have to pay for it.
Next, we have the ABSD. You would be liable to pay the ABSD if you are a:
- Singaporean Citizens owning more than one property
- Permanent Residents
- Foreign Residents
Here’s how much you would have to pay for the ABSD in Singapore:
| Profile of Buyer | ABSD Rates from 12 Jan 2013 to 5 July 2018 | ABSD Rates from 6 July 2018 to 15 Dec 2021 | ABSD Rates from 16 Dec 2021 to 26 April 2023 | ABSD Rates on or after 27 April 2023 |
| Singapore Citizens (SC) buying first residential property1 | Not applicable | Not applicable | Not applicable | Not applicable |
| SC buying second residential property1 | 7% | 12% | 17% | 20% |
| SC buying third and subsequent residential property1 | 10% | 15% | 25% | 30% |
| Singapore Permanent Residents (SPR) buying first residential property1 | 5% | 5% | 5% | 5% |
| SPR buying second residential property1 | 10% | 15% | 25% | 30% |
| SPR buying third and subsequent residential property1 | 10% | 15% | 30% | 35% |
| Foreigners (FR) buying any residential property1 | 15% | 20% | 30% | 60% |
| Entities2buying any residential property1 | 15% | 25% | 35% | 65% |
| Housing Developers3 buying any residential property1 | 15% | 25%4(Plus Additional 5% (non-remittable)5) | 35%4(Plus Additional 5% (non-remittable)5) | 35%4(Plus Additional 5% (non-remittable)5) |
There is a lot of technical jargon here so let’s go through it quickly.
For things under 1, the values in the table apply regardless of whether owned wholly, partially, or jointly with others.
For 2, an entity means a person who is not an individual, things like:
- An unincorporated association,
- A trustee for a collective investment scheme when acting in that capacity,
- A trustee-manager for a business trust when acting in that capacity
- The partners of the partnership whether or not any of them is an individual, where the property conveyed, transferred or assigned is to be held as partnership property.
For 3, housing developers refer to entities like construction companies, along with trustees for housing developers.
For 4, housing developers will also be subject to an ABSD of 35% after 16 December 2021, but may apply for a remission of this, subject to conditions.
For 5, the additional 5% ABSD is added on top of the 35% for all entities and trustees. It will not be remitted and is to be paid upfront upon the purchase of residential properties.
As can be seen in the values above, the ABSD is entirely not applicable to Singaporean Citizens buying their first residential property.
In contrast, it jumps up to 20% for those who already own a property, starting at 5% for Permanent Residents and 60% for Foreigners.
Lastly, for those who own 2 properties and are looking to purchase more, all of the ABSD percentages hover around 30% to 60%.
These numbers really blow the percentages for the BSD out of the water.
The purpose of the ABSD, therefore, is really to make buying properties in Singapore more difficult for anyone other than Singaporean Citizens who do not yet own their first home.
For the record, this does include HDB flats.
Further information on the ABSD.
From April 2023 onwards, whenever residential properties are transferred into any living trust, ABSD will be increased from 35% to 65%.
Remission is applicable for residential property held on trust for identifiable individual beneficiaries only.
How does ABSD affect your property purchase in Singapore?
Right now, you may be wondering how insane the markup can be from the ABSD. Are you allowed to take out a bank loan to pay for it? The answer is no, you can’t.
On another note, to eliminate the ABSD charges – you can time the sale of your home to coincide with your buying a new one.
That way, you wouldn’t have to pay the increase.
Another way to eliminate the ABSD charges in Singapore, particularly for Permanent Residents and Foreigners (and you’re really going to need to capitalise on this one if you can with your 30% to 60% markup), is ABSD remission.
Essentially, if you are married to a Singaporean Citizen and are changing homes, you can get your ABSD refunded.
This is under the condition that your first residential property (which you paid ABSD for) must be sold within 6 months of the purchase date of your second property if completed or after the issue date of the TOP or CSC, whichever is earlier.
On a related note, if you are married to a Singaporean citizen and both do not own any residential property currently, you do not have to pay for ABSD.
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