How to Easily Calculate Buyers Stamp Duty in Singapore [2022 Guide]

By Nicholas Hoe How to Easily Calculate Buyers Stamp Duty in Singapore [2022 Guide] |Published 01 Nov 2022 4 minutes

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At a glance...

The Singapore government controls property demand through a tax called stamp duty. These taxes ensure citizens have priority in home ownership and prevent drastic price fluctuations.

There are several things about stamp duties on residential properties home buyers in Singapore should be aware of.

What is buyer’s stamp duty (BSD) in Singapore?

Buyer’s stamp duty (BSD) is the tax that will be paid on accepting Option to Purchase/ Sale and Purchase Agreements. The tiered system is based on your property’s valuation. These duties are calculated on the bank’s property valuation or the purchase price, whichever is higher.

For example, let’s say Kevin buys a home listed at $500,000 with a market value of $550,000. The BSD would be calculated on the market value and not the listed price.

BSD rates are different for residential and commercial properties. There is a maximum of 4% BSD rate for residential and only 3% for commercial.

How to calculate buyers stamp duty for a private property?

Let’s dive into an example of how BSD is calculated on private property.

In this example, Nicole bought a private property at a market valuation of $2,500,000 and purchased the property for $2,550,000. As the purchase price is higher, the duties will be calculated at $2,550,000.

Purchase Price/Market Value BSD Rate Calculation

First $180,000

1%

0.01*$180,000 = $1,800

Next $180,000

2%

0.02*$180,000 = $1,800

Subsequent $640,000

3%

0.03*$640,000 = $19,200

Remaining $2,500,550

4%

0.04*$2500,550 = $100,022

Total BSD = 124,622

What is additional buyer’s stamp duty (ABSD)?

ABSD is only applicable to residential properties. The additional buyer’s stamp duty is a tax to be paid above the BDS rate. Singapore citizens only need to pay this tax when purchasing an additional property. On the other hand, permanent residents pay ABSD on every property they buy. 5% for the first property and 15% for every property they buy afterward. Foreigners must always pay a 20% tax on properties they purchase in Singapore.

Suppose you are a Singapore citizen and already own a property, wholly or jointly; purchasing a new property would be considered an additional one. These rates vary based on your residency status in Singapore, as shown below.

ABSD Rates For Singapore Citizens

Singapore Citizens (SC)

ABSD Rate

1st property

NA

2nd property

12%

3rd property or more

15%
ABSD Rates For Singapore Permanent Residents (PR)

Singapore Citizens (SC)

ABSD Rate

1st property

5%

2nd property or more

15%
ABSD Rates For Foreigners

Foreigners

ABSD Rate

1st property or more

20%

Do you need to pay ABSD if buying a new property and selling an existing one?

If you use the option to purchase (OTP) to buy a property before selling your property, then ABSD will apply.

You’ll need to check with your agent concerning the timelines of each transaction to avoid excessive taxes. Ask your agent or broker for advice on planning your sale and purchase.

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Considerations

On the other hand, if you are a married couple, you can apply for ABSD remission if you sell your property within six months of purchasing a new property. Regardless, you will pay the ABSD within 14 days of the purchase but can request remission afterward.

How to avoid paying ABSD for a second home?

One way to avoid paying ABSD on a second property is to decouple. When decoupling, you transfer your share of the property to another co-owner. For example, let’s say you own 50% of a property and your wife owns the other 50%. If you sell your share of the property to your wife, it will free up your name to purchase another property or vice versa.

When to pay for stamp duty in Singapore?

The Buyer Stamp Duty tax must be paid within 14 days after the sale and purchase agreement (S&P) is signed. If the S&P is signed overseas, it must be paid within 30 days after receiving the agreement in Singapore.

Using CPF to pay for property stamp duties

You can use your CPF funds in Singapore to pay for BSD and ABSD. This process usually takes around three weeks. Remember, those stamp duties must be paid in cash first and reimbursed as a cashier’s order if you are buying a resale property. Still, if you are purchasing a property under construction, you can pay duties directly from your CPF, and no reimbursement is required.

Consequences of late payment

If the buyer does not pay their stamp duties on time, a demand letter will be issued with the late payment penalty. If the tax is not paid for up to three months, then a $10 fine is imposed. If it’s not paid after three months, a $25 penalty is imposed.

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Important Info

The Inland Revenue Authority of Singapore may recover the payment from the bank or take legal action against the buyer.

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