Unlocking Strategies to Sidestep Additional Buyer’s Stamp Duty in Singapore

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Unlocking Strategies to Sidestep Additional Buyer’s Stamp Duty in Singapore

In the dynamic real estate market of Singapore, many property investors are focused on one critical objective: How to avoid ABSD and optimize their investments. ABSD, or Additional Buyer’s Stamp Duty, is a significant financial consideration, especially when looking to purchase a second property. This article delves into strategic methods for avoiding ABSD Singapore and guiding investors on how to buy second property in Singapore without ABSD.

Understanding Additional Buyer’s Stamp Duty (ABSD)

ABSD was introduced as a measure to cool the rapid escalation in property prices. It is levied on top of the existing Buyer’s Stamp Duty (BSD) and applies to individuals buying their second or subsequent property. The rates vary based on the buyer’s residency status and the number of properties they already own.

Who is Subject to ABSD?

    Read more about How to avoid ABSD here.

  • Singapore Citizens (SC) buying their second property.
  • Permanent Residents (PR) purchasing their first property.
  • Foreigners (FR) acquiring any property.

Strategies to Avoid ABSD

1. Purchase Under a Trust

One viable strategy is to purchase the property under a trust for your child. This can effectively keep the property count under your name lower, thereby avoiding ABSD Singapore.

2. Decoupling Ownership

Decoupling involves one spouse selling their share of a jointly-owned property to the other. This makes one of the spouses a first-time buyer again, thus how to buy second property in Singapore without ABSD.

3. Utilizing an Entity

Consider purchasing the property through a company or a Special Purpose Vehicle (SPV). Although this method comes with its own set of complexities and costs, it can be a viable route for certain types of investors.

4. Permanent Residency or Citizenship

For foreign nationals, obtaining permanent residency or citizenship could significantly reduce ABSD rates. This is a more long-term strategy but could be beneficial for frequent or high-value investments.

Commonly Asked Questions

What is the current ABSD rate for Singapore Citizens buying a second property?

The current ABSD rate for Singapore Citizens purchasing their second property is 17%.

Can decoupling ownership really help in avoiding ABSD?

Yes, decoupling can help as it effectively reduces the property count under each individual’s name.

Are there any risks involved in buying under a trust?

While it can be a useful strategy, buying under a trust has its own legal and tax implications which must be thoroughly assessed.

Is purchasing through a company a common practice?

This is less common due to additional costs and regulatory requirements, but it can be a suitable option for experienced investors.

Conclusion

Navigating the complex landscape of Singapore’s property market requires well-thought-out strategies. Understanding how to avoid ABSD and the benefits of doing so can make a significant difference in your investment returns. Whether you opt for purchasing under a trust, decoupling, or using an entity, there are various methods available to assist in your goal of how to buy second property in Singapore without ABSD. Comprehensive planning and professional guidance are essential to ensure compliance with all legal requirements and to optimize your real estate investments.

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