Updated on August 15, 2023 by admin

Do you want a second Singapore home? If so, you’re aware of Singapore’s Additional Buyer’s Stamp Duty (ABSD) on residential property purchases. This article discusses minimizing ABSD when buying a second home.


The Additional Buyer’s Stamp Duty (ABSD), the Total Debt Servicing Ratio (TDSR), and the Loan to Value (LTV) are just a few of the laws put in place to control the property market in Singapore. It is anticipated that these rules will continue to be enforced.


The additional buyer’s stamp duty (ABSD) for Singaporeans acquiring a second home increased from 10% to 12% on July 6, 2018, and will climb to 17% on December 16, 2021. It was recently increased to 20% as of April 27, 2023. In addition to the regular Buyer Stamp Duty (BSD), there is now an Additional Stamp Duty (ABSD) that must be paid by homebuyers. This tax applies to Singaporeans purchasing a second or subsequent home, whereas permanent residents and foreigners pay it only on their first home purchase in the country.

What is ABSD?

What is ABSD

In addition to the Buyer’s Stamp Duty (BSD), the Singaporean government now collects an Additional Stamp Duty (ABSD) from homebuyers. ABSD’s goal is to prevent people from gambling with real estate and to guarantee that people in Singapore can afford to live there.


The ABSD rates change according to the buyer’s resident status, nationality, and the number of properties they own. ABSD is waived for Singapore Citizens (SC) and Permanent Residents (PR) who are buying their first residential property. A 12% ABSD is added to the purchase price for SC and PR buyers purchasing a second home. SC and PR must pay 15% ABSD on their third and subsequent home acquisitions.


Property developers must pay 25% ABSD on the acquisition price, while foreigners and entities must pay 20% ABSD on the purchase price of any residential property.

ABSD Rates


The current ABSD tariffs are as follows:


Many homeowners have found it more challenging to begin investing in a second property in Singapore’s current real estate market as a result of the top-class measures.


You may save money either one penny or keep away from ABSD in a few different ways. Many people have heard about decoupling, which is similar to the Sell One Buy Two notion. Case studies will help us learn more about this potential course of action.


A decoupling approach is when one owner (owner A) purchases the other owner’s (owner B) whole interest in the existing property. This is also known as a “part purchase” and this option is the best.


By doing so, you may keep your present private property under Owner A’s name while allowing Owner B to buy more property with either no or reduced ABSD, depending on their citizenship and the number of properties they already own.

Type of Property

ABSD Rates


HDB (Public Housing)


Decoupling is not possible with all types of property. A married couple could own the HDB apartment as an example. This phrase means “Change in Flat Ownership (Not Through a Sale)” or “Resale Part-Share” in HDB parlance.


Resale of a portion of a share is prohibited by HDB unless it is a transfer between “parents and children” or the “buying over of an ex-spouse’s share.”


Since most HDB owners can’t afford to buy two properties in their own names, they are left with the option of selling their HDB.


Contact me for a pleasant, no-obligation discussion regarding the possibility of selling your HDB and purchasing two houses in your name.


Private Residential Property


Today’s regulations leave private residential property decoupling open but ensure that all parties involved are not about to go bankrupt before allowing it to occur.



Let’s look at a specific example to further illustrate the point.


In 2022, Mr. and Mrs. Wong want to make another investment property purchase.


Mr. and Mrs. Wong, both Singaporeans, have a mortgage on their present home (their only home to date) that they owe equally on.


If Mrs. Wong’s monthly income is sufficient, then she may qualify for a decoupling loan with an LTV of up to 75%.

Financial Calculation for Mr. Wong (Seller)

Selling Price $600,000 50% of the $1.2m property valuation
Loan Redeemed $325,000 50% of $650k outstanding loan
CPF Refund $200,000
Cash Proceed $75,000

Financial Calculation for Mrs. Wong (Buyer)

Refinance 50% of Existing Loan $325,000 50% of $650k outstanding loan
Buying Price $600,000 50% of $1.2m property valuation
– Option Fee $30,000 5% of Purchasing Price
– Down-payment $120,000 20% of Purchasing Price
– Buyer’s Stamp Duty $12,600
– Legal Fee $5,500 +/-
– New Loan $450,000 75% of Purchasing Price
Total Housing Loan $775,000 $325,000 + $450,000
Total CPF Needed $138,100 $120,000 + $12,600 + $5,500
Total Cash Needed $30,000 5% Option Fee


Since this is her first home, she will not have to pay any ABSD.
Due to the need for two law firms to represent the buyer and the seller in a decoupling transaction, the legal cost of a sale and purchase is often between $5,500 and $6,000.


On the day the decoupling procedure is legally complete, the funds will be distributed as follows:


1) A total of $775,000 will be distributed by the new bank


To pay off the present bank debt in full, $650,000 is required.


– $125,000 to settle Mr. Wong’s CPF debt


2) Purchaser must pay $120,000 in CPF funds plus a $30,000 down payment


Release $75,000 from Mrs. Wong’s CPF account to repay Mr. Wong’s CPF.


Withdrawal of $45,000 from Mrs. Wong’s Central Provident Fund Account.


– A cashier’s cheque or money order from the buyer in the amount of $30,000.


The buyer’s ability to get a new house loan and a sufficient amount of CPF funds is the most important factor in determining how much cash the buyer will need on hand before proceeding with the decoupling.


In the following example, Mrs. Wong has enough money in her CPF OA to qualify for a home loan with a 75% loan-to-value ratio. Only $30,000 is required upfront.


Now that the decoupling is complete, Mr. Wong may go on with the next home purchase without worrying about accruing any further ABSD.


Let’s compare the two possible outcomes—Mr. and Mrs. Wong buying with decoupling vs not—and the associated costs.

Ways to Minimize ABSD

1. Utilize the ABSD Remission Schemes


Buyers may choose from many ABSD refund programs. ABSD exemption for married couples is the most prevalent plan. For couples buying a second home together, this program will reimburse the ABSD tax if the original home is sold within six months of the second home’s closing.


If you are buying a second home to live in with your parents or kids, you may be eligible for the ABSD rebate. Joint tenancy with a parent or a child qualifies a buyer for a refund of ABSD paid on the purchase of a second property under this program.

2. Purchase the Second Property Under a Trust


The second property might be purchased via a trust to further reduce the risk of ABSD. Beneficiaries of the trust might include the buyer’s spouse or other relatives. This will ensure that the buyer is only counted as the owner of one home for ABSD purposes.

3. Purchase a Property Under Joint Tenancy


Joint property purchases may also lessen the impact of ABSD. The ABSD does not apply to joint tenants since they are considered to possess just one dwelling. Note, however, that this choice requires cautious deliberation and legal counsel due to potential effects on the property’s ownership and distribution.

4. Utilize the LTV Ratio


The LTV ratio determines how much of a loan a bank will make to a borrower in relation to the property’s value. Buyers may lower their required down payment and, by extension, their ABSD by making use of the loan-to-value (LTV) ratio.

5. Timing of Property Purchase


The amount of ABSD owed may also change depending on when the property is purchased. To reduce the amount of ABSD owed, buyers may either wait to buy the second property until the first is sold or buy the second property first.


Option One’s Stamp Duty is lower than Option Two’s because of ABSD, but it still includes legal fees because of a single buyer.


While the legal fees associated with Option 2 (Decoupling + 2nd property purchase) are higher, Stamp Duty is reduced.


However, not all properties can benefit from decoupling in a way that reduces Stamp Duty costs.


The difference in value between your current home and the one you want to buy is crucial.


In most cases, decoupling will be successful if the value of your present home is less than, or about equal to, the value of the property you want to purchase.


The additional costs associated with the decoupling approach may be attributed to the following:


When a Singaporean permanent resident (PR) or foreign national (foreigner) or


– The Stamp Duty holding period for Seller’s fractional interest in the property has not expired.


Finally, I recommend consulting a real estate expert to assist you figure out whether decoupling is the best strategy for you or if there is a better solution.


Please contact me for a pleasant, no-obligation chat about which approach could work best for you.

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