Stamp duty is a tax that is levied on documents when purchasing or leasing a property in Singapore. It is payable to the Inland Revenue Authority of Singapore (IRAS). The amount payable varies depending on the type of property transaction. In the case of resale condos, sellers are required to pay Seller’s Stamp Duty (SSD) to the IRAS.
The rates for SSD depend on the holding period of the property. For properties held for less than a year, the SSD rate is 12% of the selling price or market value, whichever is higher. For properties held for more than a year but less than two years, the SSD rate is 8% of the selling price or market value, whichever is higher.
The SSD rate decreases gradually for properties held for longer periods, with no SSD payable for properties held for more than three years. It is important for sellers to factor in the SSD when pricing their resale condos as it can significantly impact the final sale price.
What is Stamp Duty For Resale Condo?
The Buyer’s Stamp Duty (BSD) embodies a levy of utmost significance, reaching up to 6%, imposed upon the acquisition of property within Singapore’s realm. BSD is an obligatory remittance accompanying every purchase of property in this land. The quantum of BSD owed rests upon the purchase price, meticulously outlined within the signed agreement of sale and purchase.
The rate of Buyer’s Stamp Duty unfurls its calculation rooted in the purchase price or, if greater, the market value of the esteemed property. Delving into the depths of these calculations, one encounters the following BSD rates: For the initial $180,000, a rate of 1%; for the ensuing $180,000, a rate of 2%; for the subsequent $640,000, a rate of 3%; and for the remaining sum, a rate of 4%.
Consider, for instance, a property with a purchase price of $600,000; the BSD to be remitted would harmoniously materialize as follows: (1% x $180,000) + (2% x $180,000) + (3% x ($600,000 – $360,000)) = $12,600. In essence, the Buyer’s Stamp Duty, pertinently applicable to resale condos in Singapore, adheres to the same BSD rates as the broader spectrum of residential properties.
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Stamp Duty for Resale Condos in Singapore
What is Stamp Duty?
Stamp duty is a tax that is levied on the purchase or transfer of property ownership in Singapore. The tax is calculated based on the purchase price or market value of the property, whichever is higher.
What is Resale Condo?
Resale condo refers to a condominium unit that has been previously owned and is being sold again in the secondary market. The purchase of a resale condo is subject to stamp duty, which affects the total cost of the property purchase.
How does Stamp Duty Affect Resale Condo Buyers?
Stamp duty affects resale condo buyers by adding an additional cost to the purchase price of the property. The stamp duty rates for residential properties in Singapore are determined by the Inland Revenue Authority of Singapore (IRAS) and are based on various factors, such as the residency status of the buyer and the purchase price of the property.
Recent Changes to Stamp Duty Laws
Recent changes to stamp duty laws in Singapore include an increase in stamp duties to cool the property market. The stamp duty changes will affect roughly 10% of residential property transactions. For Singapore permanent residents buying their second residential property, the stamp duties will rise from 25% to 30%.
The stamp duty on the transfer of immovable properties for Singapore permanent residents buying a first residential property remains unchanged at 5%. The government is raising the ABSD rates to “pre-emptively manage investment demand” and “prioritize housing for owner-occupation”. The tax for foreign buyers is now 60%, while citizens and permanent residents will see small increases when buying second and subsequent properties.
How to Calculate Stamp Duty for Resale Condo in Singapore
Stamp duty is a tax that must be paid when purchasing a property in Singapore. It is calculated based on the purchase price of the property. In the case of resale condos, the buyer must pay both Buyer’s Stamp Duty (BSD) and Additional Buyer’s Stamp Duty (ABSD) if applicable. Here is how to calculate stamp duty for resale condos in Singapore.
BSD Calculation
The BSD rates for residential properties are as follows:
| Purchase Price/Market Value | BSD Rates |
|---|---|
| First $180,000 | 1% |
| Next $180,000 | 2% |
| Next $640,000 | 3% |
| Next $1 million | 4% |
| Remaining Amount | 4% |
To calculate BSD, take the purchase price of the resale condo and apply the BSD rates accordingly. For example, if the purchase price is $1.5 million, the BSD payable would be:
| Purchase Price/Market Value | BSD Rates | BSD Payable |
|---|---|---|
| First $180,000 | 1% | $1,800 |
| Next $180,000 | 2% | $3,600 |
| Next $640,000 | 3% | $19,200 |
| Next $500,000 | 4% | $20,000 |
| Remaining Amount | 4% | $32,000 |
| Total | – | $76,600 |
ABSD Calculation after 15 February 2023
From 15 February 2023, the ABSD rates for Singapore citizens and Permanent Residents (PRs) buying their second and subsequent residential properties will be increased by 5 percentage points. The ABSD rates for foreigners and entities will also be increased by 5 percentage points. Here are the new ABSD rates:
| Profile | ABSD Rates (From 15 Feb 2023) |
|---|---|
| Singapore Citizen (SC) / Permanent Resident (PR) buying second residential property | 20% |
| SC/PR buying third and subsequent residential property | 30% |
| Foreigner buying any residential property | 60% |
| Entity buying any residential property | 65% |
To calculate ABSD, take the purchase price of the resale condo and apply the ABSD rates accordingly. For example, if a Singapore Citizen is buying his third residential property for $2 million, the ABSD payable would be:
| Profile | Purchase Price/Market Value | ABSD Rates | ABSD Payable |
|---|---|---|---|
| SC buying third and subsequent residential property | $2,000,000 | 30% | $600,000 |
Transitional Provision
If the Option to Purchase (OTP) is granted before 15 February 2023, the current ABSD rates will apply even if the sale and purchase agreement is executed on or after 15 February 2023. If the OTP is granted on or after 15 February 2023, the new ABSD rates will apply.
In conclusion, calculating stamp duty for resale condos in Singapore involves calculating both BSD and ABSD if applicable. Buyers should take note of the new ABSD rates that will apply from 15 February 2023 and the transitional provision for OTPs granted before or after that date.
Stamp Duty Exemptions and Associated Taxes
Exemptions
Stamp Duty is a tax levied on property purchases and leases in Singapore. However, there are certain exemptions available for certain categories of buyers. For instance, if a buyer is a Singapore citizen and is purchasing his first residential property, he is eligible for a Stamp Duty exemption. Similarly, if a buyer is a Singapore citizen and is purchasing a second residential property for his own occupation, he is eligible for a lower rate of Stamp Duty.
Additionally, if a buyer is purchasing a property jointly with his spouse, he is eligible for a Stamp Duty exemption. However, this exemption is only available if the buyer and his spouse are both Singapore citizens.
Associated Taxes
Apart from Stamp Duty, there are other taxes associated with property purchases in Singapore. One of these taxes is the Buyer’s Stamp Duty (BSD). BSD is a tax levied on all property purchases, even HDB flats, within Singapore. The tax applies only to the buyer. The amount of BSD you have to pay depends on whichever is the higher of the following:
- The purchase price of the property
- The market value of the property
The BSD rates are progressive, with higher rates being applied to higher purchase prices or market values.
Another tax associated with property purchases in Singapore is the Additional Buyer’s Stamp Duty (ABSD). ABSD is a tax levied on certain categories of buyers, such as foreigners and entities. The ABSD rates are also progressive, with higher rates being applied to higher purchase prices or market values.
In conclusion, Stamp Duty is an important tax to consider when purchasing a property in Singapore. However, there are exemptions available for certain categories of buyers, and other associated taxes such as BSD and ABSD must also be taken into account.
Tips for Resale Condo Buyers in Singapore
Resale condos in Singapore are a popular option for homebuyers, but there are several factors to consider before making a purchase. Here are some tips to help buyers make an informed decision.
Location
Location is a crucial factor when it comes to buying a resale condo. Buyers should consider the proximity to amenities such as schools, public transportation, shopping centers, and medical facilities. It is also essential to look at the surrounding area’s development plans, as this can affect the property’s value in the long run.
Property Value
Buyers should research the property’s value before making an offer. This can be done by looking at recent transactions in the area and comparing them to the asking price. Buyers can also consult with a property agent to get an estimate of the property’s value.
Selling Price
Buyers should consider the seller’s asking price and negotiate if necessary. It is essential to keep in mind that the seller may have priced the property higher than its actual value, so buyers should be prepared to walk away if the seller is not willing to negotiate.
Owner-Occupation
Buyers should check if the property is owner-occupied or tenanted. Owner-occupied properties tend to be better maintained, while tenanted properties may require more repairs and renovations.
Renovation
Buyers should also consider the property’s renovation potential. If the property requires significant renovations, buyers should factor in the cost of the renovations when making an offer. It is also essential to check if there are any renovation restrictions in the building or the surrounding area.
In summary, buyers should carefully consider the location, property value, selling price, owner-occupation, and renovation potential when buying a resale condo in Singapore. By doing their due diligence, buyers can make an informed decision and find the right property for their needs.
Conclusion
In conclusion, Stamp Duty is an essential aspect of the property market in Singapore. It is a tax that buyers and sellers must pay when transacting properties. The rates of Stamp Duty vary depending on the type of property, whether it is residential or non-residential, and the holding period of the property.
From the search results, it is evident that the Stamp Duty rates for residential and non-residential properties have increased from February 15, 2023. The top marginal rate for residential properties is now 6%, while the top marginal rate for non-residential properties is 5%. The Buyer’s Stamp Duty (BSD) and Seller’s Stamp Duty (SSD) rates have also been revised.
Buyers and sellers should be aware of the Stamp Duty rates and the holding period of the property before making any transactions. It is crucial to note that the SSD can come up to quite a significant sum of money, so sellers should check how much SSD they will need to pay before deciding to sell their property.
Overall, Stamp Duty is a necessary tax that helps regulate the property market in Singapore. It is essential to stay updated with any changes in the Stamp Duty rates and regulations to make informed decisions when buying or selling properties.
