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As a foreigner looking to purchase property in Singapore, you may be wondering about the Additional Buyer’s Stamp Duty (ABSD). What is it? How much does it cost? And most importantly, how do you know if you’re required to pay it? Keep reading for answers to all of those questions and more.
Overview
ABSD Singapore is a new tax that was introduced on 8 December 2011. It is an Additional Buyer’s Stamp Duty, and it applies to all purchases of residential properties in Singapore, including both citizens and foreigners. The ABSD rate varies depending on the nationality of the buyer, and ranges from 0% to 15%.
The ABSD tax is a government fee that’s charged on the purchase of second and subsequent residential properties. These include HDB flats, shophouses, condos or landed properties- depending upon your residential status you may be subject to different taxes.
Why was the ABSD created?
In essence, ABSD is a revolutionary new cooling measure implemented in Singaporean housing to keep property prices affordable for citizens and discourage foreigners from purchasing multiple homes in the country.
This ABSD program aims at managing demand for residential properties, which in turn will decrease the amount that individuals or entities can purchase each year under this scheme depending on their nationality/resident status within Singapore.
Who has to pay ABSD?
Singaporean citizens who want to buy their second residential property or more will be able do so with no taxes due on the sale.
PRs are also allowed 1st time homebuyers and can claim 80% of appreciation gained in value from selling within 3 years, up until 2028 when this percentage drops down again at 30%. This means that if you own a house worth $300K before buying another one for 300+sq ft it’s possible your tax bill could go below what was paid without any fines.
When should one pay ABSD?
You are required to pay ABSD upon signing your contract. The deadline depends on where you sign the purchase agreement; if it’s in Singapore, there should be no more than 14 days before funds have been withdrawn from an account or credit card for this purpose and after that time period has passed without payment being made by either party then fees will start accumulating which could lead up serious problems down the line so do not delay paying them.
When should you pay the ABSD?
You are required to pay ABSD upon signing your contract. The deadline depends on where you sign the purchase agreement; if it’s in Singapore, there should be no more than 14 days before funds have been withdrawn from an account or credit card for this purpose and after that time period has passed without payment being made by either party then fees will start accumulating which could lead up serious problems down the line so do not delay paying them.
Calculating the ABSD
It is important to understand the ABSD in Singapore rates that you will be charged based on your purchase price or market value, whichever applies. The duty rate depends primarily upon where in Singapore (or elsewhere) a property falls into one of three categories:
Citizenship status –If an individual applying for citizenship has never been overseas as well, they may still maintain their original passport while living abroad but would need another formality along with it such us having applied within six months prior/after acquiring said document; Permanent Residents come under different rules as well.
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