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What is stamp duty?
Oct 13, 2022
Singapore
By   Internet
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  • Stamp Duty
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Abstract: Singapore enjoys a reputation as a garden city and is sought after by middle class parents as a haven for parenting. The quality education system also attracts a large number of international students.

Singapore allows foreigners to purchase property in the country, but an additional stamp duty is charged on top of the house payment.

 

As a buyer, there are two types of stamp duty involved:BSD and ABSD.

 

Whether you are a Singapore citizen or an overseas person, you will be required to pay BSD when buying a property in Singapore.

 

The rate of stamp duty on a property purchase varies from level to level depending on the total price of the house.

 

If you are buying a property with a total price of $180,000 or not more than $180,000, then the stamp duty you need to pay is $180,000 * 1% = $1800.

 

If you are buying a property with a total price of S$300,000 over S$180,000 but not more than S$360,000, then the stamp duty you need to pay is = $300,000 * 2% - S$1800 (first S$180,000 * 1%) = $4200.

 

If you are buying a property with a total value of S$900,000, over S$360,000 but not over S$1,000,000, then the stamp duty you need to pay is $900,000 * 3% - S$5400 = S$21,600.

 

If you are buying a property with a total value of S$2,000,000 over S$1,000,000, then you will need to pay a stamp duty of = $2,000,000 * 4% - S$15,400 = S$64,600.

 

Buyers of specific status are also required to pay the appropriate ABSD.

 

If you are a Singapore citizen, you will not have to pay additional stamp duty on your first property bought in Singapore. For the second property, 17% of the property price is required as an additional stamp duty. The third property and above will need to pay 25% of the property price as additional stamp duty.

 

If you are a Singapore PR, you will only need to pay an additional 5% of the property price as stamp duty if you buy your first home in Singapore. For the second property, an additional stamp duty of 25% of the property price is payable.

 

Singapore allows foreigners to buy properties in the country. If you have not yet immigrated to Singapore, you will need to pay an additional 30% stamp duty on the price of the property for any property purchase.

 

If the property is purchased in Singapore in the name of a company or other non-individual, an additional stamp duty of 35% of the price of the property is payable.

 

Alternatively, as Singapore has signed the FTA, if you are a citizen or permanent resident of Iceland, Norway, Switzerland or Liechtenstein, or a US citizen buying a property in your personal name, you are entitled to the same treatment as a Singapore citizen and only need to pay stamp duty on the purchase of the property.

 

Trustees

 

From 9 May 2022, an additional buyer's stamp duty of 35% will be levied on all transfers of residential property to a living trust.

 

The additional buyer's stamp duty will be payable on the transfer of residential property to a living trust, but eligible trustees can apply to IRAS for a refund.

 

There are three conditions for claiming the refund:

 

1) All beneficial owners are identifiable individuals.

 

2)The beneficial owner holds title to the home at the time the residential property is transferred to the living trust.

 

3) The beneficial interest cannot be further divided and restored, or the subsequent conditions must be met.

 

The timing of payment of stamp duty on the purchase of a property is divided into two main categories:

 

If the contract of sale or subscription is signed in Singapore, payment must be made within 14 days from the date of the contract.

 

For contracts of sale or subscription signed outside of Singapore, payment must be made within 30 days from the date of the contract.

 

How do I pay stamp duty for buying a property? Can I use the CPF?

 

If you are an overseas buyer, you need to pay the full amount of stamp duty and you cannot take out a loan. Of course, as far as payment methods are concerned, Stamp Duty for buying a property supports various online payments.

 

If you are a Singapore citizen or permanent resident, you can use your CPF account to pay the stamp duty on your home purchase. Of course there are certain rules and regulations. For example:

 

Only the amount in your CPF Ordinary Account can be used to pay the stamp duty on the purchase of a property.

 

If it is a second property and the CPF was used for the purchase of the first property, then the sum of the CPF special account and the general account must exceed the current basic deposit amount and the remaining amount in the general account can be used to pay the stamp duty on the purchase of the property.

 

If the purchase is of an existing house, the buyer needs to pay the stamp duty on the house first and then apply for CPF compensation.

 

If the house is a phase house, you can directly use the CPF to pay the stamp duty for the house purchase.

 

Who will pay the stamp duty if I rent out my house?

 

Stamp duty in Singapore is not only payable for buying a house, but also for renting a house. However, landlords do not have to worry because the Singapore government has explicitly stipulated that the tenant pays the stamp duty on rented properties.

 

If a couple buys a house together, can they be exempted from paying the additional stamp duty?

 

Buying a property jointly by a couple is more complicated. First of all, it depends on the status of both spouses.

 

If one of the spouse is a Singaporean citizen, the purchase of the first home is treated as the first home of a Singaporean citizen and is exempt from the SSD.

 

If both spouses are Singapore PRs, the purchase of the first home is subject to an additional 5% stamp duty.

 

If only one spouse is a Singapore Permanent Resident and the other spouse is a foreigner, the purchase of the first home is subject to an additional 30% stamp duty.

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