When it comes to property investments, Singapore is among the top worldwide destinations. Because of the strong economy, advances in technology, and high quality of life offered in the city-state, a large number of individuals and companies are interested in moving there.


Additional Buyer’s Stamp Duty, sometimes known as ABSD, is one of the laws governing real estate transactions in Singapore. Its purpose is to maintain order in the market while while encouraging individuals to engage in dangerous financial transactions. Read this article in order to protect yourself from experiencing ABSD. It will clarify what it is as well as how you can avoid it.


Let’s start this article with amazing and interesting points of views on ‘ABSD’. Let’s go!

What is ABSD Singapore?

Citizens of Singapore who acquire property are charged an extra tax known as the Additional Buyer’s Stamp Duty (ABSD). A percentage of the purchase price is used to determine this tax, which is in addition to the Buyer’s Stamp Duty (BSD). Where you live, how many properties you already own, and the home you want to buy all factor into how much ABSD tax you’ll have to pay. In order to reduce possible betting on real estate prices, the government created ABSD.

Factors to Avoid ABSD effects

Buyers of houses may now have to pay an extra stamp duty on alterations in addition to the BSD. In addition to property value, multiple factors should be considered when calculating loan amounts. The area of residence and number of properties owned at the time of the transaction are considered. Understanding these components is important for preventing or reducing ABSD effects.


  1. Residency Status Matters: Singaporeans have a greatly lower risk of ABSD than tourists or natives. The ABSD you must pay depends on whether you are a permanent resident (PR) of Singapore or just traveling. Many ABSD users are non-English speakers.
  2. Number of Properties Owned: The rate of ABSD increases If you already own a property in Singapore, then you pay a higher ABSD rate.

What Is the ABSD Singapore Rate and Who Needs to Pay It?

What Is the ABSD Singapore Rate and Who Needs to Pay It?

How to avoid ABSD Singapore?

There are just a few methods in which you are allowed by law to save money on ABSD: So let’s Explore a variety of strategies and hints that may help you in reaching this important financial milestone.


1. Buying a house with one owner so both partners may buy more under their names

When people are thinking about buying a house with only one owner, it’s usually so that both of them can buy more homes under their own names. At this point, this is the easiest way for the family to have two homes.


Make sure that neither you nor your partner are mentioned as a co-owner when you buy your first home, like a flat or house. If it’s an HDB flat, just name them as renters.


2. Choosing the Right Time to Buy a House

Think carefully about when you want to make that property investment. If you currently own a home in Singapore but are looking to expand your real estate investments, you may choose to sell your current home before making your next purchase. As a result, you may experience little or no ABSD.


3. Types of Property

Think about investing in properties that are free from ABSD. property used for business or industry, as well as property with unique functions like conservation shophouses, may be free from ABSD.


4. Separating an owner from the property they have now in order to free up their name

When one co-owner sells their share of the property to another or more co-owners, this is referred to as a “transfer of ownership.”


The result of the legal process of “removing a name” from a property title might vary widely. Put the new owners’ names on the title document. Common examples of decoupling are:

  • After a divorce or legal separation, one spouse may want to have the other’s name removed from the property title. This provision may be included in the final settlement.
  • Some individuals include trust in their wills and others don’t. Because of this, they may keep the property without having their name on the title.
  • One of the many circumstances that might alter property ownership is a change in co-ownership. The title of the property has to be changed to reflect its new legal standing.
  • Financial reasons including debt repayment, refinancing, or asset protection are another possible impetus for separation. Changing the property’s name might accomplish the desired results.
  • When many people possess an asset for business purposes, one of them may decide to quit the company or transfer their share of the asset.

Note: Keep in mind that there are only six alternatives to the rule against transferring ownership of HDB flats:

  • Marriage
  • Divorce
  • Owner’s death
  • Issues with income
  • Leaving one’s country and
  • List of health-related problems

5. Purchase of Real Estate for Young Children Using a Trust

This strategy is only suitable for those who have the financial means to buy a home completely, without using a loan or using their Central Retirement Fund. You may use this strategy to become the Trustee of a property trust for a kid younger than 21 and acquire real estate on their behalf.


Although you may feel emotionally attached to the home you’re purchasing for your kid, legally speaking, that home does not become “yours” until the youngster comes of age. Taxes and maintenance costs are also your responsibility.


You can’t consider this as an asset since you aren’t the official owner. This implies that you may avoid paying ABSD on a second house purchase made using this strategy.

6. Investing in a Dual-Key System

The price of a dual-key apartment is equal to that of purchasing a single-family house with two separate entries. You won’t have to pay additional ABSD on the second property since it will be counted as one.


Both the main house and the accessory housing unit have their own entry foyers and bedrooms. Each housing unit may consist of a separate living space and share kitchen and toilet services, or vice versa, depending on its design.


Since the secondary property may be rented out independently, dual-key flats are desirable among both homeowners and landlords. However, due to their limited availability, dual-key apartments often have a higher price per square foot, sometimes by as much as 25%.


7. Investing in a Business Property

Purchasing commercial real estate in Singapore may protect you from the effects of ABSD rates. In addition, the average rental return for commercial buildings is 5%, whereas the yield for residential homes is just 2%-3%.


However, you should be aware that commercial buildings are not without their dangers. They are more expensive than, say, a home. The down payment is likewise essential and adds even more financial spending. There’s also a Goods and Services Tax (GST) charge that must be paid in advance.

But Does Avoiding ABSD Always Save Money?

If you’ve learned how to ‘avoid’ paying ABSD, should you constantly look for methods to do so? Is there ever a time when it makes sense to pay ABSD instead of tax?

It is worth it to pay ABSD in Singapore if the property has a high potential for joy.


Waiting until an ideal purchase opportunity because you want to conserve your ABSD might lead you to miss out on some excellent deals. In the long term, saving money won’t increase your income. Development and rental income are both strong points for some homes. According to him, “ABSD can be viewed as one of the ‘costs’ of business.”

He clarifies, saying things like, “For example, most would sell their HDB apartment and purchase a condo to avoid paying ABSD. But suppose they had retained the HDB and made the ABSD payment instead. If they rented out the HDB, they might expect rental returns of above 10% annually.


Q. Can Singapore citizens be exempt from ABSD?

Ans. When buying a primary residence in Singapore, most nationals are free from paying ABSD. ABSD might be applied to other properties in the future.


Q. How can foreigners avoid paying ABSD in Singapore?

Ans. If foreign investor wants to avoid ABSD, they should go to commercial or industrial real estate. They may also seek an ABSD waiver, however only under specific conditions.


Q. Where can I find the most current information on ABSD in Singapore?

Ans. Visit the Inland Revenue Authority of Singapore (IRAS) website or speak with a tax expert for up-to-date information and detailed advice on ABSD in Singapore.


Q. Is there any relief for ABSD in cases of financial hardship?

Ans. IRAS may grant ABSD relief requests under conditions of extreme financial need. Each application is carefully examined.


Keep in mind that property transactions in Singapore are highly regulated and complicated, so it is wise to consult with lawyers and accountants. Real estate investments may provide the greatest returns with the least amount of stress on your part if you take the time to get to know yourself with the regulations and use the methods discussed above.


I hope it will help you a lot!


Have a good day!


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