Buying property can be daunting and complicated, especially if it’s your first time. On the finances side, it’s not just the home loan that you need to take note of. There are also other (often hidden) things to take into account, such as the stamp duty and property tax.
For Singaporeans, if it’s their first home, they’re exempted from paying the Additional Buyer’s Stamp Duty (ABSD).
But it’s a different story for those buying with a PR or foreigner. Even if it’s their first residential property, they’re still subjected to the ABSD.
What is ABSD?
The Additional Buyer’s Stamp Duty (ABSD) is a stamp duty paid on top of the Buyer’s Stamp Duty (BSD). The payable rate depends on the residential status of the buyer and the number of properties under their name. How much you’ll need to pay is then computed based on either the property price or valuation, whichever is higher.
It’s a form of cooling measure designed to bring down property prices and make housing more affordable for Singaporeans. So the ABSD rates are higher for non-Singaporeans and those with more than one property. The latest change in the rates was in December 2021, when the ABSD rate for Singaporeans buying their subsequent properties was increased from 12% to 17% for their second residential property.
For PRs buying their second residential property, the increase was even higher from 15% to 25%. And for foreigners buying any property, the ABSD has increased from 20% to 30%.
The thing about the ABSD is that if you’re a Singaporean buying property with a non-Singaporean, you’ll be subjected to a higher ABSD rate.
Here’s a breakdown on how the ABSD can affect your property purchase.
Buying first property
For PRs, whether or not they’re buying their first property on their own or jointly with a Singapore Citizen (SC), they’ll need to pay 5% ABSD.
So if you’re a Singaporean planning to buy a house with a PR, and this is the first property for both of you, you’ll need to pay the 5% ABSD.
Let’s say you’re buying a S$1.5 million condo. The ABSD to be paid will be 5% ⨉ S$1.5 million = S$75,000.
Buying second property
Let’s say both you and another person (a PR) have a residential property on your own, and plan to buy another house together.
As of 16 December 2021, the ABSD for SCs buying a second property is 17%. For PRs buying a second property, it’s 25%.
In this case, the payable rate will be higher, which is 25%.
So for a S$1.5 million condo, the ABSD payable is 25% ⨉ S$1.5 million = S$375,000.
Buying first property
Regardless of whether it’s the first property or not, foreigners have to pay a 30% ABSD, as of 16 December 2021. This is an increase from 20%.
So as an SC buying the first property with a foreigner, you’ll be subjected to a 30% ABSD.
This means for a S$1.5 million condo, the ABSD payable is 30% ⨉ S$1.5 million = S$450,000.
Buying second property
The ABSD for SCs buying a second property is 17%, while the ABSD for foreigners is 30% regardless of the number of properties they have.
So even if this is your second property, but it’s the first one for the foreigner, you’ll still be subjected to the higher ABSD rate of 30%.
The good news is that if you’re buying as a married couple, you may be eligible for the ABSD remission.
ABSD remission for married couples
With the ABSD remission, you don’t have to pay the ABSD. But you’ll need to meet certain criteria. The main thing is that the property has to be:
- Bought jointly by a married couple
- Married couple comprises at least one Singaporean
Buying first property
Let’s say you’re a Singaporean and your spouse is a non-Singaporean (either a PR or foreigner). If both you and your spouse don’t have any other residential properties, you can apply for the ABSD remission. So you don’t have to pay the ABSD.
Your lawyer can help with this through the e-Stamping portal.
But the main thing is that the house must be jointly bought by both of you.
Buying second property to upgrade
If you and your non-Singaporean spouse are buying a second property together to upgrade (for instance, from an HDB flat to a condo), you’ll be subjected to a higher ABSD rate.
This will be 25% on the second property if your spouse is a PR, or 30% if they’re a foreigner.
You’ll have to pay the ABSD first, even if you plan on selling the first property.
If you manage to sell it within six months from the date of purchase, TOP or CSC (whichever is earlier), you may be eligible for the ABSD remission to get a refund.
Likewise, to be eligible for the remission, the second property must be purchased under both names.
You can apply for the remission through the e-Stamping portal. For more information on the refund application for the ABSD remission, you can also refer to IRAS’ guide.
What else to take note about the ABSD remission?
Not applicable for HDB flats
Take note that this ABSD remission doesn’t apply if you’re upgrading from an HDB flat to another HDB flat, eg. from a 4-room to a 5-room flat.
After all, for public housing, you’ll have to dispose of your old flat within six months of having the new flat.
Not applicable for third property onwards
The ABSD remission is only for buying the first property, or the second property if you sell the existing property.
So if you’re buying a third property together, you’ll have to pay the ABSD and won’t be able to get a refund.
For an SC/PR or SC/Foreigner couple, the ABSD rate will be 30%.
Only for married couples
Even if you’re engaged, you won’t be eligible for the ABSD remission.
The ABSD has to be paid within 14 days of signing the Sale and Purchase Agreement. So if you want to qualify for the ABSD remission, you’ll have to register your marriage beforehand.
This also means that if you’re planning to buy a property with your parents or siblings, you won’t be able to qualify for remission.
Only for married couples with at least one SC
This is one of the first things we mentioned about the ABSD remission earlier, but we thought we should highlight it here again.
The ABSD remission is only applicable for those with at least one Singaporean spouse. So it’s not eligible for PR-foreigner couples.
And given that the ABSD rate to pay will be based on the profile with the higher rate, regardless if this is the first residential property together or the third one together, the ABSD payable will be 30%.
What do you think of the ABSD remission? Let us know in the comments section below or on our Facebook post.
If you found this article helpful, 99.co recommends Here’s why the ABSD remission system should be abolished for HDB upgraders and Singapore Budget 2022: Potential impact on property owners in a post-pandemic world.
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Looking to sell your property?
Whether your HDB apartment is reaching the end of its Minimum Occupation Period (MOP) or your condo has crossed its Seller Stamp Duty (SSD) window, it is always good to know how much you can potentially gain if you were to list and sell your property. Not only that, you’ll also need to know whether your gains would allow you to right-size to the dream home in the neighbourhood you and your family have been eyeing.
One easy way is to send us a request for a credible and trusted property consultant to reach out to you.
Alternatively, you can jump onto 99.co’s Property Value Tool to get an estimate for free.
If you’re looking for your dream home, be it as a first-time or seasoned homebuyer or seller – say, to upgrade or right-size – you will find it on Singapore’s fastest-growing property portal 99.co.
Meanwhile, if you have an interesting property-related story to share with us, drop us a message here — and we’ll review it and get back to you.
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