Firstly, there are taxes that need to be paid when buying a property in Singapore, which are called stamp duty in Singapore. These are the Buyer's Stamp Duty(BSD) and the Additional Buyer's Stamp Duty (ABSD).
BSD is calculated on the higher of the purchase price or the market value of the property. The higher the price of the property, the higher the corresponding Buyer's Stamp Duty will be.
The Government is increasing the Buyer Stamp Duty (BSD) on higher value homes from 15 February 2023.
For homes over $1.5 million, the Buyer's Stamp Duty rate will be increased from the existing 4% to 5% for homes between $1.5 million and $3 million, and from 4% to 6% for homes over $3 million.
According to the table below, a simple summary is: (for residential properties, for example)
House price == House price > S$1 million, the total buyer's stamp duty is: House price x 4% - S$15,400
S$3 million >= House price > S$1.5 million, the total buyer's stamp duty is: House price x 5% - S$30,400
For a house price > S$3 million, the total buyer's stamp duty is: House price x 6% - S$60,400
An example (residential).
If the purchase price is S$1,000,000, the buyer's stamp duty is: 1,000,000 x 3% - S$5,400 = 2,4600
For a purchase price of S$1.5 million, the Buyer's Stamp Duty would be: 1,500,000 x 4% - 1,5400 = 4,4600
If the purchase price is S$3,000,000, the Buyer's Stamp Duty is: 3,000,000 x 5% - 3,0400 = 119,600
If the purchase price is S$4,000,000, the Buyer's Stamp Duty is: 4,000,000 x 6% - 6,0400 = 179,600
Note: Buyer's Stamp Duty is payable regardless of whether you are a Singapore citizen, permanent resident or a foreigner buying a property in Singapore.
Additional Buyer Stamp Duty (ABSD)
In addition to the Buyer's Stamp Duty, some buyers are also liable for the Additional Buyer's Stamp Duty (ABSD) and the amount payable varies depending on their status.
The Singapore Government announced the latest round of property cooling measures late on 16 December 2021.
With immediate effect, the Additional Buyer's Stamp Duty (ABSD) on residential property purchases was increased by 5 to 15 percentage points.
The ABSD payable by Singaporean citizen buyers of second properties has been increased from 12% to 17%, while the ABSD payable by permanent residents of second homes has been increased from 15% to 25%.
The ABSD for foreign buyers is increased across the board from 20% to 30%. The ABSD for businesses has been increased from 25% to 35%.
The Government has also tightened the Total Debt Service Ratio (TDSR) from 60% of income to 55% of income for monthly loan repayments.
The Government also reduced the Loan-to-Valuation (LTV) ratio for HDB housing loans from 90 per cent to 85 per cent. However, the LTV for HDB housing loans obtained through financial institutions remains at 75%.
Singapore citizens are not required to pay the Additional Buyer's Stamp Duty (ABSD) on the first home they buy in Singapore.
For the second home, 17% of the property price is payable as additional buyer's stamp duty; for the third or more properties, 25% of the property price is payable as additional buyer's stamp duty.
For the first home bought in Singapore by a Singapore Permanent Resident, only 5% of the property price is payable as Buyer's Stamp Duty.
For the second home, 25% of the property price is payable as Buyer's Stamp Duty. For the third home or more, 30% of the property price will be charged as Buyer's Stamp Duty.
Foreigners wishing to buy a home in Singapore as a residence will be required to pay 30% of the price of the property as a Buyer's Stamp Duty, regardless of the number of units.
In addition, under the FTA, if you are a US citizen, a Swiss citizen or green card holder, an Icelandic citizen or green card holder, or a Liechtenstein citizen or green card holder, you are exempt from the SSD.
For physical or non-individual buyers, the SSD is 35% of the price of the property in Singapore.
Buyers of commercial or industrial properties, Singapore citizens who purchase HDB flats or executive condominiums are not liable for the SSD.
Once you have bought a property, if you want to sell it, please note that there is a Seller Stamp Duty SSD (SSD) for 3 years. When you sell your home, you only need to pay a percentage of the stamp duty according to the period.
Buyers who bought their homes after 14 January 2011 will only have to pay Seller Stamp Duty within 3 years of purchase and will not have to pay it again if they sell after holding the property for more than 3 years, which is an important measure to stop speculation in Singapore.
Private housing transactions in Singapore must be handled by a lawyer, and the lawyer's fee is usually around S$3,000 for properties under S$2 million.
If buying a new condominium, there is no brokerage fee; if buying a second-hand condominium, the buyer does not have to pay a brokerage fee and the seller will pay 2% of the transaction price to the seller's agent and the buyer's partner agent.
There are no additional fees for taking out a loan directly through a bank, usually at an interest rate of less than 2%.
In addition, we understand the process of buying and paying for a property.
In Singapore, payments are made in progress, with full payment made only after full completion of the project. For new developments, after a 20% down payment, the remaining balance is paid according to the progress of the project. For example, if the foundation is completed and inspected, 10% of the foundation payment is advanced by the developer and then paid by the buyer (by way of loan repayment).
This money is not paid directly to the developer, but is transferred to a project account set up specifically for the development and monitored by the government for the sole purpose of earmarking the money.
85% of the total price of the property is not paid until the buyer takes possession of the keys, and the remaining 15% is not paid until the condominium is fully serviced and maintained, thus ensuring that there are no bad properties in Singapore.
What are the costs of owning a property?
Property tax in Singapore is levied once a year based on the annual value of the property. The annual value is assessed by the government and is generally lower than the actual rent. The annual value of a specific property can be checked at this address for a fee of S$2.50 per enquiry.
There are two main types of property tax rates in Singapore, owner-occupied and non-owner-occupied, with the lower rate for owner-occupied and the higher rate for non-owner-occupied, where renting, leaving vacant or lending to others for use falls under the non-owner-occupied category.
In addition, owner-occupiers, government renters and small householders are entitled to further concessions or discounts, so the average resident pays very little property tax.
The property tax rate for owner-occupiers is adjusted to a progressive rate. Property is exempt from property tax if the annual value of the property is less than S$8,000. Above S$8,000 the general tax rate is 4% up to a maximum of 16%.
Outside rental properties are generally taxed at a rate of 11% up to a maximum of 27%.
Of course, the more expensive the property, the more expensive it is. A property fee of S$500 a month is S$6,000 a year.
The calculation of rental income tax is also very complex and there are many deductions such as interest on home loans, home repair costs etc.
Rental income tax is actually very low and can be claimed after deducting loan interest, loss of rent, home repairs and maintenance and some other listed expenses.
