Ultimate Guide to BSD & ABSD In Singapore [Updated 2019]
5 Points to help you better understand the new property tax ruling
Purchasing a house is an exciting opportunity and a huge investment decision in your life. Whether you are investing by yourself or buying the property with your partner, there are many factors that you have to put into consideration.
In terms of property transactions, there are three notable stamp duties: the BSD (Buyer’s Stamp Duty), and ABSD (Additional Buyer’s Stamp Duty).
In this article, we are going to highlight all the crucial aspects of the buyer stamp duty that will ensure you always be in the know before undertaking any property transaction.
Also read: Property Taxes in Singapore
What is stamp duty?
A stamp duty refers to a tax on documents that relate to lease or purchase of property and its payable to Inland Revenue Authority of Singapore (IRAS).
Recently the government has introduced two versions of the tax in line with its property cooling measures that were designed to limit excessive investment and speculative activity that can increase property barriers making property prices affordable to all Singaporeans.
The two new versions are:
- Buyer’s Stamp Duty (BSD)
- Additional Buyer’s Stamp Duty (ABSD)
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Buyer stamp duty Singapore
Buyer stamp duty is payable to all those who purchase property in Singapore. Singapore property stamp duty to be paid by the buyer is based on:
- The purchasing price of the property, as outlined in the signed sale and purchase agreement
- The property market value, as stated in the valuation reports of the property.
How to calculate Buyer’s Stamp Duty
The Current buyer stamp duty calculator rates are as follows
|The purchase price or market value of the property||BSD rate|
For example, Valentine is purchasing a residential property that costs $800,000. The stamp duty calculator will be as follows
1× $180,000 = $1,800
2% x $180,000 = $3,600
3% x $440,000 = $13,200
The total payable stamp duty on the property will be $18,600
There is also another shortcut on how to calculate property stamp duty Singapore. If a property is valued at or being sold less than $1 million, you can as well this formula to calculate the BSD
(3% x purchase price or market value)
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Additional buyers stamp duty
In addition to the buyer’s stamp duty, the additional stamp duty is levied on:
- Singaporeans buying their second and subsequent residential properties
- Permanent residents buying their first and subsequent residential properties
- Foreigners and non-individuals purchasing any residential property
What is considered residential property?
Examples of common residential properties include terraced houses, condominium, HDB flats, bungalows, cluster houses, and HUDC apartments.
HDB shops comprising of living quarters and shop-houses with portions allowed for residential use are also considered as residential properties for ABSD purposes
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How to calculate ABSD
Just as buyers stamp duty, the amount payable to the government is based on property’s purchase price or market value.
The additional buyers stamp duty rates are dependent on the buyer’s residency status. In 2019 the ABSD rates are as follows:
|Buyer’s residency status||ABSD rate on the purchase of first property||ABSD rate on the purchase of a second property||ABSD rate on the purchase of third and subsequent property|
|Singapore citizens, and nationals and Permanent Residents of Switzerland, United States of America, Liechtenstein, Iceland, and Norway||Not applicable||12%||15%|
|Singapore Permanent Residents||5%||15%||15%|
For example: Jane is buying her second residential property worth $800,000. She is required to pay an ABSD of
12% x $800,000 = $96,000
From this example the buyer would need to pay a stamp duty total of BSD + ABSD: $18,600 + $96,000= $114,600. Its (14.3% of purchase price of $800,000).
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Payment of BSD and ABSD
Stamp duty is payable within 14 days of the option to purchase or sale and purchase agreement being signed or from the date of transfer. We will highlight the accepted modes of payment
|Location||Accepted payment modes|
|e-Stamping Portal (online)||eNETS, cheque, cashier’s order|
|Inland Revenue Authority of Singapore (IRAS) Surf Centre e-Terminals||eNET, NETS, cashcard|
|SingPost Service Bureaus (at Chinatown, Novena, Raffles Place and Shenton Way)||Cash, cheque, cashier’s order, NETS|
It’s a requirement that property stamp duty both (BSD and ABSD) to be paid in full and not in installments. The law also allows you to pay for the same using your Central Provident Fund funds. However, the only catch is you will need to pay the BSD and ABSD first and then seek reimbursement from your CPF account.
The fine print of the payments is:
- All rates levied on market value or purchase price of the property, whichever is higher
- Joint-owned properties are counted as if each part-owner wholly owned them. In other words, it means an individual owning 5% share in one property and is searching to buy another property would be considered as making a second purchase
- In some instances of joint-ownership, a high BSD and ABSD is applicable. If a foreigner and a Singaporean co-buys a property, a levy of 15% is applied.
Deadline for Paying buyer stamp duty Singapore
If you are late in payment of BSD and ABSD, you will be issued with a demand note to remind you that you are late with your payment. The demand note will also state the penalty that you will be issued with as a result of late payment.
The penalties are
- Delaying payment for up to 3 months: $10 or an amount equal to the BSD and ABSD payable, whichever is higher.
- Delay of payment exceeding three months: $25 or an amount equal to 4 times the BSD and ABSD payable, whichever is higher
IRAS may recover the outstanding stamp duty by appointing your bank, employer, tenant or lawyer to pay the outstanding amount on your behalf. IRAS may also take legal action against you to recover the unpaid amount owed to them.
How can you stamp duty?
Stamping of documents is done online via the IRAS e-stamping portal. This requires Singpass two-factor authentication (2FA).
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