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 Calculating stamp duties for properties can vary greatly depending on what property you’re buying or what share you’re receiving. Here’s all you ever wanted to know!

Why is Stamp Duty necessary
Who should pay for stamp duty in a rental agreement

Whether it’s your first time purchasing property in Singapore or you’re a seasoned real estate expert eyeing your next flat, understanding stamp duty rates and processes gives you the edge in saving money and turning profits during resale.

Today, we’re taking you through a rundown of all the aspects of stamp duty in Singapore, what you may have to pay, and what rates you can expect based on the current IRAS rules.

Who pays stamp duty

What is Buyer’s Stamp Duty Calculator?

Buyer’s stamp duty calculator is, essentially, the manner in which the IRAS determines the stamp tax you must pay when you purchase property in Singapore.

 Although that sounds simple enough, let’s break down the core elements of this definition for clearer understanding.

 Buyer’s Stamp Duty (BSD) is the name given to the tax amount charged by the Singaporean government on the documents processed whenever you buy property situated within Singapore.

 The IRAS stands for Inland Revenue Authority of Singapore and it’s a government agency that provides advisory and administrative assistance to the Singaporean government in matters related to taxation.

 A stamp tax or stamp duty is basically the tax that governments impose on legal papers and documents that record the transfer of property or assets between individuals, entities, etc.

 Hence, stamp duty on property is different from other taxes like excise duty for motor vehicle or conveyancing stamp duty.

 The road tax or excise duty on motor vehicle is included in the vehicle’s registration process unlike property stamp duty which is paid during the transfer of ownership.

If you visit the IRAS website, they also have content that you can use as professional advice for information on how stamp duty gets calculated.

 So, anyone looking for expert advice and reliable information on stamp duties in Singapore can use this platform for learning more about stamp duties.

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When and how to pay stamp duty

Why is Stamp Duty necessary?

Stamp duty is necessary because it validates the transfer of ownership for the property in question.

 Whenever a property changes hands, acknowledgement of previous ownership and recognition of the new ownership must be done by relevant authorities.

 Without the appropriate recognition and documents, virtually any individual or entity could claim that the property belonged to them.

 When you pay the stamp duty and process the legal documents of transfer, the government’s acceptance of the tax implies that the property now legitimately belongs to the new owner.

 From the government’s perspective, the stamp duty is not just a validation of the legal documents but a small stream of revenue which, along with other taxes, can be utilized for public spending.

 So, the stamp duty acts as a validation of the purchase agreement you make with the owner or buyer of the property.

 Stamp duties are imposed on documents that indicate the transfer of ownership and these documents must not be confused with other legal documents like 0.1% multi-tier service agreements, transaction reference documents, futures contracts, etc.

What is the formula for stamp duty in Singapore

 What is my next step after calculating Buyer’s Stamp Duty?

Once you’re Buyer stamp duty gets calculated, you can proceed to executing the payment of stamp duty.

 You can go for one of two payment options here.

 The first option is the IRAS official website where they offer multiple modes and methods of payment depending on the kind of transactions you prefer.

 The other options is to seek out one of the many service centers affiliated to the IRAS.

 At these service centers, you can register the stamp duty payable and the special rules that apply when clearing your stamp duty rate.

 There may be fines imposed on late payment of BSD dues, so make sure you enquire about deadlines and expected payments beforehand.

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What is my next step after calculating BuyerGCOs Stamp Duty

How is Stamp Duty calculated in Singapore?

The IRAS imposes specific slabs of tax rate type and percentages depending on the kind of property being bought.

 For the most part, the stamp duty is a direct reflection of the property’s price and what slab it falls under.

 Here’s a table that summarizes the basic BSD (Buyer’s stamp duty) rates for a property price. 

Purchase Price (Or property’s market value)

Rate

Initial $180,000

1%

Next $180,000

2%

Next $640,000

3%

Amount Remaining

4%

 

 For your personal stamp duty calculation purpose, here’s a breakdown of what this table indicates.

 As you can see, the BSD rates remain at a consistent 1% for the first $180,000 of the entire property purchase price.

 So, if your residential property or condominium unit costs $180,000 or less, your stamp duty will remain at 1%.

 However, if the property’s purchase price is more, it will cost an additional 2% for the next $180,000, 3% up to $640,000, and stay at 4% for the remaining amount.

 As an example, let’s assume that a property is sold for $800,000.

 In this instance, the equation will be as follows:

 (1% of 180,000) + (2% of the next 180,000) + {3% of (800,000 – 180,000 – 180,000)} = 18,600.

 So, the buyer’s stamp duty for this property based on the rate on purchase is about $18,600.

What is BuyerGCOs Stamp Duty Calculator

How much is property stamp duty in Singapore?

The calculation of stamp duty for property in Singapore will vary depending on your status as a resident, a number of properties already owned by you, and the standard buyer’s stamp duty rates currently in effect.

 If you’re a first-time buyer and a resident of Singapore, the rates will mostly be calculated off the sale price or market value of the property as already explained above.

 However, if you already own private property, there will be an additional buyer stamp duty based on the type of buyer you qualify for.

 The table below shows the varying applicable ABSD rate when you buy additional property in Singapore.

Type of Buyer

Number of Properties

ABSD Rates (Residential Properties)

Singapore Citizens

First-time buyer

0%

1 property

17%

2 or more properties

25%

Singapore Permanent Residents

First-time buyer

5%

1 property

25%

2 or more properties

30%

Foreigners

Any property

30%

As the table shows, there is no exemption for individuals who classify as foreigners because they’ll pay a flat 30% on any residential properties, non-residential properties, commercial properties, Ming property, business property, etc.

A Singapore permanent resident, on the other hand, will pay different stamp duty land tax based on the type and number of residential property purchases.

 If the resident is also a Singaporean citizen buying his 3rd property, the additional stamp duty will cap at 25% regardless of any other subsequent property purchase he makes.

 However, tax resident individuals who are not citizens won’t get the same exemption on contract notes when it comes to property tax.

 Non-resident individuals who bear Singaporean citizenship will still enjoy the discounted ABSD rates when it comes to calculation for transactions for stamp duty.

 The rates for citizenship apply even regardless of whether the buyers are individual residents or corporate bodies making the purchase.

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How is Stamp duty calculated for Buyers in Singapore?

Stamp duty for buyers in Singapore is calculated based on existing BSD rates imposed by the IRAS and Additional BSD rates if the buyers already own immovable property in Singapore.

 So, a citizen of Singapore who already owns property will shell out a standard BSD tax along with an additional BSD tax based on the price of the property.

 Many online platforms today have stamp duty calculators that you can use to generate the duty you ought to pay.

 However, since these platforms are auto-generated solutions, it’s still advisable to stay familiar with how stamp duty is calculated for buyers in Singapore.

 Stamp duty is not just for immovable property though, any transfer of shares from one owner to another also invites stamp duty charges.

 Anytime shares change hands, a share transfer document is prepared and signed by the participating parties.

 For shares, an accurate valuation report may indicate the net asset value (NAV) or actual price of the transfer, which does not include transaction costs or a transaction reference.

 Once the NAV or purchase price is ascertained, a stamp duty of 0.2% is imposed on this figure.

How much is property stamp duty in Singapore

What is the formula for stamp duty in Singapore?

We’ve already listed out the stamp duty rates and slabs that apply to different properties and buyers in Singapore.

 However, if you don’t wish to manually calculate your stamp taxes every time, there’s a simple mathematical formula that can reveal accurate stamp duty rates.

 The formula can come under two categories depending on the market value or purchasing price of the property. 

Market Value (MV) or Purchasing Price (PP)

Formula for Stamp Duty

S$1,000,000 or less

{0,03% x MV (or PP) – $5,400}

Over S$1,000,000

{0.04% of MV (or PP) – $15,400}

When it comes to shares and stocks, the stamp duty isn’t the only expense you’ll pay.

 So, while considering stamp duty and other expenses in share transfers, you must take into account other factors like deficient duty, APIs for stamp duty, exchange rate and other transaction costs.

When and how to pay stamp duty?

The most convenient way of paying your stamp duty is through the e-Stamping IRAS portal, which is a secured portal run by the IRAS where you can view, manage, and handle all your stamp duty transactions as well as download stamp certificate if necessary.

 You can access the e-Stamping portal by using your SingPass credentials and it’s easy to get your e-Stamping portal registration if you’re there for the first time.

 For properties

If you’ve purchased new property like an executive condominium, for instance, in Singapore, go to the ‘Sale and Purchase of Property’ section under the ‘Stamping’ tab.

 The tab is easy to find thanks to the friendly navigation features on the portal, unlike the convoluted interfaces you find in other government portals.

 Even from the first visit, you can tell that there’s decent application programming behind this portal making it easy for new users to browse and familiar for experienced users.

 Next, you should fill out the ‘Sale and Purchase of Property’ form that appears where you punch in your relevant details, property tax figures, and the type of property you’ve bought (Eg. Terrace houses, HDB flat, private condo, flat in cluster houses, etc.).

 Once you enter your details, the IRAS e-Stamping system can generate the stamp duty you must pay.

 Once the amount is generated, you can proceed to choosing a mode of payment from your end.

 The options usually include eNETS or FAST via DBS/PSOB, which is convenient because many users use these modes for securities transaction, payout for employers and employee salaries, etc.

 When payment is done, you can view or download your stamp duty certificate of registration if you wish to hold on to a soft copy or print a hard copy.

 

For Shares and mortgages

When it comes to shares, you have to pay stamp duty on the contract agreement that mentions the NAV of the share, type of instrument, instrument of transfer, etc.

 If you’re part of clearing house participants in the selling of shares or the brokerage of security, ensure that all parties remain aware of stamp duty requirements in Singapore.

 Also, transactions made on an exchange and exchange trading fees – 0.005% (no matter how low) have to be considered when you’re calculating the overall costs of making these transfers.

 Some sustainable & green exchanges may incur additional costs and duties with the objective of promoting environmentally stocks and shares but the stamp duties should remain the same.

 If you deal with exchange-traded products or derivative markets, stamp duties may still apply to whatever shares you buy, so make sure you check whether you’re liable to pay before proceeding.

 For mortgages, you may be looking for financing opportunities like personal loans, mortgaging loans, foreign currency loan agreements, etc.

 So, try to keep track of expenses outside of stamp duties to see if your financing options can handle the purchase of new property plus other unseen expenses.

Who pays stamp duty?

The sale, purchase, renting, or other relevant transfer documents will state who should be the one paying the stamp duty.

 In many instances, it is the purchaser/buyer who has to make the stamp duty payment, but the responsibility to pay can change depending on the type of transfer taking place, and this can affect the buying decision for the buyer in most cases.

 Here, are some examples of who ends up paying the stamp duty depending on the type of transfer. 

Type of Transfer/Document

Who Pays Stamp Duty

Sale and Purchase Agreement (Buyer’s Stamp Duty)

Buyer

Sale and Purchase Agreement (Seller’s Stamp Duty)

Seller

Document of Transfer (without contracts)

Transferee/recipient

Transfer of Property as Gift

Transferee/recipient

Declaration of trust/Trust Deed

Trustee

Partition of property

Specified party or both parties

 

These are the general instances where stamp duty usually falls on the party mentioned.

 It’s advisable to stay updated on this chart by checking it from time to time so that you don’t commit errors during your transfers.

Can CPF pay stamp duty?

Yes. CPF can be drawn upon in most cases for paying your stamp duties because the fund is meant to cover certain housing needs in addition to retirement and healthcare requirements.

 Ensure that your CPF clauses have the relevant provisions for allowing you to fund your stamp duties.

 These provisions should be mentioned clearly in the description for employers and employees alike.

Since CPF savings run on automation of time and contribution, most people have enough to cover substantial payments like stamp duties for expensive properties.

 Drawing from your CPF account takes time, so you may have to pay the stamp duty with cash and then apply for a reimbursement from the CPF later.

 

If you’re buying a standing property that’s completed, you can direct your CPF reimbursement application to request for same-time completion.

 On the other hand, if the property you’re buying is still under construction, your one-time CPF reimbursement can be set for the day of completion (or before that, not after).

Who should pay for stamp duty in a rental agreement?

For any tenancy agreement in Singapore, the tenant is normally liable to pay the required stamp duty on the rental agreement.

 The agreement may come in various document types, but like any other contract, it requires the signatories from both parties and a recognized authority to validate the agreement.

 In this case, it’s the IRAS that validates the contract by imposing document taxes that come in the form of stamp duties.

The stamp duty for rentals will kick in regardless of whether you’re leasing out the entire property or merely renting out a few rooms within the house.

 A rental stamp duty calculator will determine the amount you have to pay by considering factors like the duration of the lease and the amount being paid in rent.

 A rental property lease duration that is 4 years or less will incur a stamp duty of about 0.4% of rent being charged.

 For instance, if you lease a property that costs $3,200 per month for a period of three years (36 months), your stamp duty will be as follows:

 Total rent for 3 years = 3,200 x 36 = 115,200

0.4% of total rent = 0.4% of 115,200 = $460 (Rounded off to the nearest dollar).

 Rental contracts do not require an agreement for purchase because you’re not actually buying the property.

 However, you may need to chalk out financing agreements with lenders if you’re looking for a renovation loan or personal loan.

As a foreigner, how much stamp duty do I have to pay?

Foreigners who wish to buy property in Singapore will have to contend with a standard buyer’s stamp duty and an additional buyer’s stamp duty on the property price.

 While the initial buyer’s stamp duty follows the same charge as a Singaporean citizen, the additional buyer’s stamp duty is a flat 30% for any property.

 This flat 30% ABSD is much more compared to a resident citizen who doesn’t have to pay an ABSD is it’s his first time buying property.

 Even on his second or third property purchase, the ABSD for the Singaporean citizen is capped at 17% and 25% respectively.

 So, a foreigner who buys a property worth $500,000 will pay the initial stamp duty of $9,600 and then go on to pay another $159,600 as the 30% ABSD imposed on foreign buyers. 

For example, a citizen of Hong Kong buying his first residential property in the city would pay a measly HK$100 as Hong Kong stamp duty, which is a low amount even if you convert it to other non-Hong Kong dollar currencies.  

 In comparison, citizens of European countries like Northern Ireland get exemption for stamp duty if it’s their first property purchase and the price is £300,000 or less.

 So, foreigners who wish to buy property in Singapore ought to pay careful attention to contracts of sale signed, current market trends, direction of the financial market, and even small charges like application money.

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