Property Stamp Duty Singapore (ABSD,BSD,SSD): Easy formula for calculations

The Singapore government is well known for being an interventionist when it comes to the property market. Besides financing requirements, one other way they control property demand is through a form of tax called stamp duty.

These property taxes ensure Singapore citizens and Permanent Residents have priority in home ownership. They also prevent roller-coaster prices that would hurt the economy and, ultimately, the cost of living.

On the lookout for a new home?

Here are a few things you should know about property stamp duties on residential properties in Singapore:

• What is buyer stamp duty?
• How to calculate buyer stamp duty using a formula
• What is additional buyer stamp duty (ABSD)?
• How to calculate ABSD using a formula
• How to avoid ABSD for a second property
• When to pay for stamp duty and using CPF
• Consequences of late payment of stamp duties
• What is seller stamp duty (SSD)?
• How to calculate SSD using a formula
• Exemptions for seller stamp duty

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

Buyers stamp duty (BSD) is the tax that is to be paid on the acceptance of Option to Purchase/ Sale and Purchase Agreements. It is a tiered system and is always based on the higher of your property price or valuation.

Buyer stamp duties are always calculated on the bank-indicated property valuation or purchase price, whichever is higher.

To break this down clearly, let’s say Alex buys a property with a selling price of $2,500,000. The property has a market value (valuation) of $2,700,500.

Since the valuation amount is higher than the actual purchase price, the BSD will be calculated on the valuation figure of $2,700,500.

W.E.F 20th Feb 2018, BSD has been revised and is levied differently on residential and non-residential properties. The top-tier BSD rates for residential properties in Singapore have been increased to 4% from 3%.

Buyer stamp duty tax rates broken down into residential and commercial properties are as follows:

As you can see from the table above, residential properties above a market value/purchase price of $1,000,000 are applied a 4% BSD rate.

However, this does not apply to commercial properties, which still have a maximum tier of 3% BSD even for prices above a million.

This increase in stamp duty rates is why many Singaporeans have dipped into commercial property investing instead.

How to calculate buyer stamp duty for a private property and HDB?

Let’s move to a worked example to show how exactly buyer stamp duties are calculated:

Adam bought a private property at a market valuation of $3,500,550 and at $3,200,550 purchase price.

Since the valuation amount is higher than the purchase price, stamp duties are to be calculated at $3,500,550:

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 = $3,600
Subsequent $640,000	3%	0.03%*$640,000 = $19,200
Remaining $2,500,550	4%	0.04*$2,500,550 = $100,022
		Total BSD = $124,622

Buyer Stamp Duty (BSD) calculation formula:

Purchase Price (PP) / Market Value (MV)	BSD Formula
Less than $1,000,000	[0.03% * (PP or MV] – $5,400
More than $1,000,000	[0.04% * (PP or MV)] – $15,400

Using the above simplified formula, the buyer stamp duties Adam would need to pay would also be: ($3,500,550 * 4%) – $15,400 = $124,622

What is Additional Buyer’s Stamp Duty (ABSD)?

The additional buyer’s stamp duty is the tax to be paid above the buyer’s stamp duty tax rate on the purchase of additional residential property. Do note that ABSD is not applicable to commercial properties.

If you already own a property (whether it is owned fully, jointly, or partially) in Singapore any new purchase of a residential property would be considered an additional residential property.

The ABSD rate is also applied differently based on your citizenship or residency status.

W.E.F 6 July 2018, the ABSD rates for the difference residency statues in Singapore are:

Singapore Citizens (SC)	ABSD Rate
1st property	NA
2nd property	12%
3rd property or more	15%

Singapore PR (SPR)	ABSD Rate
1st property	5%
2nd property or more	15%

Foreigners	ABSD Rate
1st property or more	20%

How to calculate additional buyer stamp duty (ABSD)?

Worked example:
I am a foreigner buying my first residential home at a market value of $4 million and the purchase price being $3.85 million on 5th July 2019. What would my computed ABSD be?

Since the market value is higher than the purchase price and ABSD levied on foreigners buying any residential property is at 20%: ABSD would be $4,000,000*20%= $800,000.

Additional Buyer Stamp Duty (ABSD) calculation formula:

Purchase Price (PP) / Market Value (MV) x Respective ABSD rate

I am buying a new property but selling my existing one, do I still need to pay ABSD?

ABSD will apply if you exercise the option to purchase (OTP) to buy a property before the OTP for your selling property is exercised by your buyer.

Therefore, do ensure that you have a firm check on the timelines of your contra (buying and selling) transaction to avoid any heavy stamp duty payments. You can ask your property agent or a mortgage broker for advice for your planning purposes.

However, if you are a married couple, you can apply for ABSD remission if you sell your previous property within six months of purchasing your new home.

Remember that you must initially pay the ABSD within 14 days of the purchase. Therefore, do ensure you have sufficient funds in your CPF OA account or cash in hand.

How to avoid paying ABSD for a second home

A common method to not have to avoid paying ABSD when buying a second property is to go through a decoupling or a part purchase. When decoupling — transferring your share of a property to another co-owner — the BSD is payable on the share transferred.

For example, say you own 50% of a property, and your wife owns the other 50%. If your wife decides to transfer (sell) her share of the property to you, the BSD will be payable on the 50%. This means half the property price or valuation, whichever is higher.

For this reason, homeowners planning to decouple later (to buy a second property) would often allocate shares in their property as 99 -1 with a tenancy in common. That is, 99% to one owner and 1% to the other. This way, BSD is only paid on the one per cent being transferred when decoupling.

When to pay for stamp duty in Singapore and can I use CPF?

If the sale and purchase agreement (S&P) is signed in Singapore, then it has to be paid in 14 days after the S&P is signed.

If the S&P is signed overseas, then it can be paid within 30 days after receiving the agreement in Singapore.

Yes, you can use CPF to pay for property stamp duties in Singapore

You can use your CPF funds available in your OA account to pay for both buyer stamp duties (BSD) and additional buyer stamp duties (ABSD).

As the process of seeking approval and the release of funds from CPF board towards payment of your stamp duties takes around 3 weeks, do take note of the following:

If you are buying a resale property (either private or HDB) – Stamp duties will have to be paid in cash first and then reimbursed back to you in the form of a cashier’s order by CPF board.

If you are buying a property under construction (BTO or new launch condo) – You can pay for stamp duties directly via CPF and no reimbursement is required.

Consequences of late payment of BSD and ABSD

If the buyer’s stamp duty is not paid on time, then a demand note is issued as a reminder associated with the penalty incurred for not paying on time.

1. If the tax is not paid for up to three months, then $10 or an amount equivalent to BSD, whichever is higher, is imposed.
2. If the tax is not paid for even after three months, then $25 or equivalent to four times the BSD payable, whichever is higher.

The Inland Revenue Authority of Singapore (IRAS) may recover the amount from the bank, lawyer on owner’s behalf and may even take legal action against them to recover the outstanding amount.

What is Seller Stamp Duty (SSD) in Singapore?

The seller stamp duty (SSD) was introduced to prevent flipping the purchase and almost immediate resale of property at a higher price, which results in inflated prices. As such, the SSD only applies if you sell within the first three years of a property purchase.

SSD is based on the higher of the property price or value at the time of sale. It applies to both residential and commercial properties, and is payable within two weeks of completing the sale.

Seller stamp duty rates:

Date of Purchase	Holding Period	Seller Stamp Duty (SSD) Rate
On and after 11 March 2017	Up to 1 year	12%
“	More than 1 year and up to 2 years	8%
“	More than 2 years and up to 3 years	4%
“	More than 3 years	NA

How to calculate seller stamp duty (SSD)?

Worked example:
Jaden purchased his residential property on 5th June 2017 and sold it on 20th June 2018 at a price of $4,180,000 .

Since the property was held for more than a year but lesser than 2 years, a seller stamp duty rate of 8% applies: SSD = $4,180,000*8%= $334,400

Seller Stamp Duty (SSD) calculation formula:

Property Sold Price x Respective SSD rate

Exemptions from SSD

• When selling residential properties, public authorities like HDB and JTC need not pay SSD while exercising their duties.
• When the property has been acquired by the government under the Land Acquisition Act the owners of residential property need not pay SSD.
• When the individuals are adjudged bankrupt and are required to dispose of their residential property, they are exempted from paying SSD.
• While disposing of their residential property upon involuntary winding up, companies need not pay SSD.
• Foreigners can exempt themselves from paying SSD if they have to sell their residential property under Residential Properties Act.
• HDB flat sellers or transferors who bought their flats on or after 30th Aug 2010 and have been identified for Selective Enbloc Redevelopment Scheme (SERS) can exempt themselves from SSD.
• HDB flat sellers or transferors who return their flats to HDB due to repossession need not pay SSD.
• A HDB owner who marries another HDB owner can be exempted from paying SSD on or after 18th Dec 2015, only if one of them has let go of their respective flat.

Be aware that SSD is payable during an en-bloc / collective sale (apart from SERS)

If you have purchased a private property, such as a condominium, and it was put up for an en-bloc within three years of the purchase, you are still liable to pay the SSD.

This is regardless of whether or not you agreed to the en-bloc. If paying the SSD would cause you a financial loss in this situation (as you would make less from the sale than you originally paid for the unit), you can represent your case to the Strata Titles Board.

But I have definitely heard of investors reselling properties without paying the SSD. What gives?

It is probable that what you heard about was the transfer of the Option to Purchase (OTP). For a brief time, it was possible to add the names of subsequent buyers on the OTP, and then transfer the OTP (but not the house, thus evading stamp duties on the resale). That loophole has since been closed, and any information lingering about this is now obsolete.

Finally, there is GST payable on commercial properties, for commercial properties, you do have to pay the usual GST. At the time of writing, this is set at 7% of the higher of the purchase price or valuation.

Still confused or worried about stamp duties?
A mortgage broker doesn’t just show you the best home loan rates offered by major banks in Singapore for your housing loan. They’re also familiar with the property market, specific rules and regulations and can advise you further for your new property purchase. If you have any inquiries regarding your property purchase, please reach out to us! Our DollarBack Mortgage consultants will be more than happy to assist you.