{"id":74565,"date":"2024-05-08T17:22:36","date_gmt":"2024-05-08T09:22:36","guid":{"rendered":"https:\/\/www.99.co\/singapore\/insider\/?p=74565"},"modified":"2024-05-09T14:08:04","modified_gmt":"2024-05-09T06:08:04","slug":"iras-investigation-into-the-99-to-1-property-scheme","status":"publish","type":"post","link":"https:\/\/www.99.co\/singapore\/insider\/iras-investigation-into-the-99-to-1-property-scheme\/","title":{"rendered":"What IRAS’s investigation into the 99-to-1 Property Scheme means for you?"},"content":{"rendered":"
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In April 2023, ABSD-related headlines dominated news cycles as IRAS announced revisions to the ABSD rates<\/span><\/a>, impacting homebuyers. Now, a year later, history seems to be repeating itself, albeit with a twist. Instead of revisiting ABSD rates, discussions are swirling around the <\/span>99-to-1 scheme<\/span><\/a> in property-related circles.<\/span><\/p>\r\n\r\n\r\n\r\n

So, what’s the deal exactly, and should you be concerned?<\/span><\/p>\r\n\r\n\r\n\r\n

IRAS’s probe into 99-to-1 Scheme<\/b><\/h2>\r\n\r\n\r\n\r\n

The <\/span>Inland Revenue Authority of Singapore (IRAS)<\/span><\/a> is currently conducting audits to uncover cases of property purchases structured in a 99-to-1 manner, aiming to avoid the <\/span>Additional Buyer\u2019s Stamp Duty (ABSD)<\/span><\/a>.<\/span><\/p>\r\n\r\n\r\n\r\n

Taking a step back: A refresher on the ABSD and 99-to-1 Scheme<\/b><\/h2>\r\n\r\n\r\n\r\n

Let’s break it down a bit.\u00a0<\/span><\/p>\r\n\r\n\r\n\r\n

The ABSD is a tax added by the Singapore government on property purchases. This tax, layered on top of the <\/span>Buyer’s Stamp Duty (BSD)<\/span><\/a>, applies to specific categories of property buyers. The rates of this duty change depending on the residency status of the buyer and how many properties they already own. For example, if you’re a Singaporean buying your second property, you might have to pay a 12% ABSD rate, while foreigners might face a 20% rate.<\/span><\/p>\r\n\r\n\r\n\r\n

Now, let’s talk about the 99-to-1 scheme. This is a method property buyers use to minimise their ABSD liability. Essentially, it involves splitting property ownership between two parties in a 99:1 ratio, with one party owning just a tiny 1% share. By setting up the ownership this way, buyers aim to lower the amount of ABSD they have to pay. However, authorities are now keeping a close eye on these arrangements to prevent misuse and ensure everyone is following the tax rules.<\/span><\/p>\r\n\r\n\r\n\r\n