Stamp duty is a tax levied on the legal recognition of certain documents and in Singapore, any documents that are related to immovable properties, stocks or shares are taxable.
Below are some examples of such documents
1) Lease / Tenancy Agreements
Upon renting a property in Singapore, the lease/tenancy agreements are prepared and signed. Stamp Duty is calculated based on the actual rent or market rent whichever is higher. The person who leases (owner) or rents (tenant) the property is responsible for paying Stamp Duty.
2) Acceptance to Option to Purchase / Sale & Purchase Agreements
Upon buying or selling a Singapore property, these documents are prepared and signed. Stamp Duty is payable on the actual price of the property or market price whichever is higher. The buyer is responsible for paying Buyer’s Stamp Duty (and additional buyer Stamp Duty if applicable). On the other hand, the seller will be paying for the Seller’s Stamp Duty if applicable.
These are documents that are prepared and signed when you obtain a loan from banks for your property purchase. Stamp Duty is payable on the loan amount. The person who obtains the loan (mortgagor) is responsible for paying the Stamp Duty on the mortgage document.
Hence whether it is purchasing a resale HDB flat, new launch condo or a resale Singapore condo, it is important for buyers to take into consideration of the Buyer Stamp Duty(BSD) and Additional Buyer Stamp Duty(ABSD) that they are subjected to before deciding to make any property purchases. Likewise, sellers might also be subjected to Seller Stamp Duty (SSD) if they sell their properties within 4 years from the date of purchase.
When & Why should stamp duty be paid
Once the document is signed and dated, Stamp Duty needs to be paid :
Within 14 days after the date of the document if the document is signed in Singapore or
Within 30 days after the date of its receipt in Singapore if the document is signed overseas.
It is an offence to use a document which Stamp Duty has not been paid on. If IRAS detects a document where Stamp Duty has not been paid, a penalty of up to 4 times will be imposed. In addition, a document where Stamp Duty is paid can be admitted as evidence in the court in cases of disagreements.
The above information is obtained from the IRAS website. Kindly visit the site for more information and details.
Buyer’s Stamp Duty (BSD)
|Based on the purchase price or market value, whichever is higher|
Additional Buyer Stamp Duty (ABSD)
|Profile Of Buyer||ABSD rate|
|Foreigners and entities buying residential property||15%|
|Singapore PR buying First Residential Property||5%|
|Singapore PR buying Second and subsequent Residential Property||10%|
|Singapore Citizen Buying First Residential Property||Nil|
|Singapore Citizen Buying Second Residential Property||7%|
|Singapore Citizen Buying Third and subsequent Residential Property||10%|
Seller Stamp Duty (SSD) – Residential Properties (14/01/11 onwards)
|Holding Period||SSD payable|
|Up to 1 Year||16% of consideration or value, whichever is higher|
|Up to 2 Year||12% of consideration or value, whichever is higher|
|Up to 3 Year||8% of consideration or value, whichever is higher|
|Up to 4 Year||4% of consideration or value, whichever is higher|
|More than 4 years||No SSD Payable|
For a property of price or market value above $360,000, the buyer stamp duty can be calculated using the formula below:
BSD = (3% x property price) – $5400
The Buyer Stamp Duty is applicable to all buyers purchasing a resale HDB flat, a new launch condo or even a resale singapore condo. As for the Additional Buyer Stamp duty (ABSD) , Singapore Citizen who does not own any residential property will not be subjected to ABSD. above Seller Stamp Duty rate affects sellers who purchase their residential property on and after 14 Jan 2011.
Above information is obtained from the IRAS website. For more details, please click here to visit their website.