Singapore’s real estate market has seen a significant change with the updated Additional Buyer’s Stamp Duty (ABSD) rates that have come into effect from 27th April 2023. In this article, we will explore the updated rates and their impact on condo buyers.
The Singaporean government has unveiled a fresh series of measures aimed at cooling the red-hot real estate market, which includes an increase in the Additional Buyer’s Stamp Duty (ABSD) rates. ABSD is a stamp duty fee that is charged upon the purchase of second and subsequent residential properties in Singapore for Singaporean citizens. For Singapore Permanent Residents and foreign buyers, ABSD is imposed on any residential property they acquire in Singapore.
The ABSD rates for foreign buyers have been doubled, increasing from 30% to 60%. This is the sharpest increase among the measures unveiled by the government. Singaporeans purchasing their second residential property will now face an ABSD rate of 20%, up from the previous rate of 17%, while those buying their third and any subsequent residential properties will now be required to pay an increased rate of 30%, up from 25%. Developers are still subject to the 35% ABSD.
The government’s primary aim is to foster a sustainable property market and prioritize housing for owner-occupation. The ABSD rates for Singaporean citizens and permanent residents have been raised to decrease demand, though the increments are relatively smaller compared to those for foreign buyers. The government expects the stamp duty changes to impact approximately 10% of residential property transactions based on last year’s data.
The increase in ABSD rates for foreign buyers has caught many off guard since foreign buyers accounted for a paltry 3.3% of property transactions, while entities made up 0.4%. Nevertheless, the government views the doubling of ABSD rates for foreign buyers as necessary to have an effective dampener on foreign investments.
ABSD Comparison Table:
| Buyer Category | Property Type | ABSD Rate On/Before 26 April 2023 | ABSD Rate On/After 27 April 2023 |
|---|---|---|---|
| Singapore Citizen | First residential property | 0% | 0% |
| Singapore Citizen | Second residential property | 17% | 20% |
| Singapore Citizen | Third and subsequent residential property | 25% | 30% |
| Permanent Residents | First residential property | 5% | 5% |
| Permanent Residents | Second residential property | 25% | 30% |
| Permanent Residents | Third and subsequent residential property | 30% | 35% |
| Foreigners | Any residential property | 30% | 60% |
| Entities or Trustees | Any residential property | 35% | 65% |
| Housing Developers | Any residential property | 35%^ + 5%^^ | 35%^ + 5%^^ |
As per the comparison table, Singapore citizens buying their first residential property will continue to be exempted from ABSD. However, for those purchasing their second residential property, the ABSD rate has been increased from 17% to 20%. Additionally, the ABSD rate for Singapore citizens buying their third and subsequent residential property has increased from 25% to 30%.
Permanent residents purchasing their first residential property will continue to pay 5% ABSD. However, for those purchasing their second residential property, the ABSD rate has been increased from 25% to 30%. The ABSD rate for permanent residents buying their third and subsequent residential property has also increased from 30% to 35%.
Foreigners buying any residential property in Singapore will now have to pay 60% ABSD, which is a significant increase from the previous rate of 30%. Similarly, entities or trustees buying any residential property will now have to pay 65% ABSD, which is up from 35%.
Housing developers buying any residential property will continue to pay 35% ABSD, but they will also have to pay an additional 5% for developers that fail to complete construction and sell all units within the stipulated time frame.
Conclusion:
The updated ABSD rates will have a significant impact on condo buyers in Singapore, especially those purchasing their second or subsequent residential property. It is advisable for buyers to assess their financial situation before making any purchase decision.
