You will be able to explain how ABSD depends on residency and property count, and when it may be remitted.
Farah and Hakim weren't planning a second home. But in the course of their research, Farah came across a forum thread from a couple who had bought a condo before selling their HDB flat. They had paid a six-figure stamp duty bill within weeks of signing, and then raced to sell the flat in time to get it back. Half the replies said they were lucky. The other half said they had planned it badly.
Both groups were describing the same tax. Additional Buyer's Stamp Duty is the largest cost in many property decisions, and it is the one buyers are most likely to find out about late.
Additional Buyer's Stamp Duty, or ABSD, is paid on top of Buyer's Stamp Duty, and only by some buyers. Whether you pay it, and at what rate, depends on two things.
The first is your residency status: Singapore citizen, permanent resident or foreigner. Citizens pay the lowest rates, foreigners the highest. Companies and trusts buying homes have their own, high rates.
The second is how many residential properties in Singapore you already own when you buy. HDB flats count. A share of a jointly owned property counts as owning that property. The more you own, the higher the rate on the next one.
For citizens buying their first home, there is currently no ABSD, which is why Farah and Hakim's Bedok purchase only carried BSD. A permanent resident buying a first home pays ABSD at a rate set by IRAS, and a foreigner pays more. A citizen buying a second home pays it too. ABSD is charged on the same base as BSD, the higher of price and market value, but as a flat rate on the whole amount rather than in slices.
When two or more people buy together, ABSD is charged on the whole property at the rate for whichever buyer has the highest one.
Suppose a citizen buying a first home adds a sibling who already owns a flat. The citizen alone would pay no ABSD. The pair are charged at the second-home rate, on the full price, because of the sibling. The same applies when a citizen buys with a partner who is a permanent resident or a foreigner. One name on the contract can change the bill by tens of thousands of dollars, so work out the profile of every buyer before deciding whose name goes on it.
Most of the time, ABSD is a cost you don't get back. There is one important exception for couples who upgrade.
A married couple, with at least one spouse a Singapore citizen, who buy a replacement home together while still owning their first, can apply to IRAS for a refund, called remission, of the ABSD they paid. The condition is that they sell their first home within a set period. Miss that deadline and the ABSD stays paid. The conditions are specific, about who owns what and when, so read the IRAS page on remission before you sign anything.
Here is how it plays out for Farah and Hakim, ten years from now in this example. They own the Bedok flat and want to buy a S$1.2 million condo before selling it, so the family can move straight across. As citizens buying a second home, they would pay ABSD on the condo. Using a rate invented for this example, 15%, that is S$180,000, due within weeks of signing, on top of BSD. It must be paid in full first. If they then sell the Bedok flat within the set period and meet the other conditions, they can claim the S$180,000 back.
So the risk isn't really the tax. It's whether they can sell in time, and whether they can find S$180,000 to pay upfront while waiting. Lesson 8.4, Upgrading or right-sizing in the right order, looks at that decision in full: sell first and risk having nowhere to stay, or buy first and carry ABSD and two loans for a while.
ABSD is one of the main tools the government uses to cool the property market. The rates have been raised several times, at short notice, sometimes overnight, and each change comes with its own rules for options that were granted before it. Rates in an article from even a year ago may be wrong.
Use the current IRAS rates every time you plan, and check them again right before you commit. If you are close to signing when a change is announced, speak to your lawyer the same day.
For Farah and Hakim's current purchase the answer is simple: citizens, first home, no ABSD under the current rules. They wrote that down with the date they checked, and added a second line for the condo plan: second home, ABSD payable upfront, remission possible if the flat is sold in time.
Work out the same for your own purchase. In the activity below, write the ABSD profile for your purchase and the conditions you would need to meet for any remission.
Write the ABSD profile for your purchase and the conditions you would need to meet for any remission.
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