Additional Buyer Stamp Duty (ABSD) – 5 Shocking Secrets Revealed

Additional buyer stamp duty is the additional levy when purchasing your second residential property on top of the usual Buyer’s Stamp Duties.   

Yes, you read that right, BSD + ABSD! 

Before this dashes your moderate hope of becoming a real estate tycoon, it is important to understand that stamp duties, like any national policy, are a double-edged sword; to deter and protect. 

Additional Buyer Stamp Duty (ABSD) was first introduced in December 2011 as a cooling measure to discourage foreign buyers and entities from inflating the market. This is a housing restriction further imposed by the Singapore government due to rising property prices. ABSD rates were subsequently increased in 2013, and most notably in 2018 to include more buyer profiles such as Singapore Permanent Residents.

Additional Buyer Stamp Duty was used as a way to protect the buying interest of Singaporeans and keep the market accessible in the long run. 

ABSD rates were subsequently increased in 2013, then 2018, and most notably in 2023 to include more buyer profiles such as Singapore Permanent Residents (SPRs).  

The rise in ABSD in 2018 was to curb rocketing property prices as the private market rose by 8% in 2018 compared to 1.1% the year before. 

To stop speculation and slow the heat of en bloc fever, the ABSD revision kicked in, pacing the rate of demand. 

ABSD applies specifically to residential units and does not apply to commercial or industrial properties. 

Residential properties including public, private, and even shophouses with zoned residential space, will also be considered for additional buyer stamp duty. 

In the case of ABSD, the status of your residency is important. 

The following table shows the most up-to-date ABSD rates from 2023.  For data on previous ABSD rates, you may refer to the IRAS website. 

Status of Residency	1st Property Count	2nd Property Count	3rd Property Count
Singapore Citizen	0%	20%	30%
Permanent Resident	5%	30%	35%
Foreigner	60%	60%	60%
Entity	65%	65%	65%

Entities are defined by IRAS as the following:

1. Not an individual
2. An unincorporated association
3. A trustee for a collective investment scheme when acting in that capacity
4. A trustee manager for a business trust when acting in that capacity 
5. The partners of the partnership whether or not any of them is an individual, where the property conveyed, transferred, or assigned is to be held as partnership property

If a property is jointly purchased by buyers of different profiles, the profile with the highest ABSD rate will apply to the entire value purchased.

Let’s take a look at a few examples of various residency statuses to better understand the Additional buyer stamp duty taxation.

The husband & Wife are owners of an existing property and wish to purchase a second unit for investment, which is also under both of their names, yes in this case, ABSD for 2nd property comes into effect. (BSD 4% + ABSD of 20%) 

Do note that ABSD is levied on either the purchase price or the market value, whichever is higher. 

For example, if the couple has retained their HDB and purchased a $1.5 million property, which is also market valuation, the couple would have paid:

BSD: $44,600 + ABSD: $300,000= $344,600!

Let’s look at another example where each spouse is already an owner of existing properties.

Property Owned	Husband	Wife
Existing Property	HDB – Sole Owner	Condominium – Sole Owner
Existing Property	–	Condominium – Sole Owner
New Property	Terrace House – Joint Tenancy	Terrace House – Joint Tenancy
Payable ABSD	20%	30%

In this case, the husband’s ABSD rate is 20% as the New Property they wish to purchase together is considered his second.

While the wife would have accumulated three, therefore paying 30%, on top of the usual Buyer stamp duties.

If both husband and wife are Permanent Residents, the tax structure is the same with BSD + ABSD but the Additional buyer stamp duty for the 2nd property is 25% of the purchase price or valuation, whichever is higher.

BSD: $44,600 + ABSD: $375,000 = $419,600

This sounds like a lot of money flowing to IRAS but fret not, there are legal ways to overcome ABSD on your second residential purchase.

Yes, there are! Let’s refer to the first example of the Singaporean couple who owns their HDB under both names and purchased their second investment unit under both names. 

If the couple had sold their existing HDB flat before signing the Option to Purchase of their second property count, no ABSD is levied. 

ABSD may also be remitted if the couple sells their first property within 6 months of purchasing their second property, provided the second property is also under both spouses’ names.

ABSD does not apply to private property owners downsizing to HDB flats.  Neither is ABSD levied on HDB upgraders to Executive Condominiums (ECs).

As a Singaporean couple, you may consider selling the first property and purchasing the second under one spouse’s name, freeing up the other spouse’s name for a subsequent investment unit. 

On this note, do take note, that if any spouse had purchased the second property under one name before selling the first property, ABSD is applied and cannot be claimed back. 

You may also choose to decouple which involves changing the ownership of the property to tenancy in common and transferring shares to the other couple at a fee, subject to BSD as well. 

It can be an expensive process but cheaper than paying for ABSD on the second property. 

As a PR couple, one may consider taking up Singapore Citizenship to enjoy property tax privileges. 

If you are a foreigner marrying a Singapore Citizen, ABSD does not kick in on your first property if the property is under both names. 

Once again, this reflects the purpose of Additional buyer stamp duty in Singapore as a way to deter and protect Singapore citizens.

If you are also a citizen or permanent resident of the following countries:

• Nationals of USA
• Nationals & PRs of Iceland
• Nationals & PRs of Liechtenstein
• Nationals & PRs of Norway
• Nationals & PRs of Switzerland

Even though you are a foreigner, due to the Free Trade Agreements between the countries listed above and Singapore, you are accorded the same ABSD treatment when acquiring properties in Singapore instead of the foreigner ABSD rates.