What is Stamp Duty in Singapore?

Stamp Duty in Singapore is a tax levied by the Inland Revenue Authority of Singapore (IRAS) on the transfer of dutiable documents, including those related to property transactions. It's a one-time payment that contributes to the government's revenue stream. Understanding the different types of stamp duty and how they apply to your specific situation is essential for accurate financial planning.

Is Stamp Duty Compulsory in Singapore?

Yes, stamp duty is compulsory in Singapore for any property transaction involving a dutiable document. This includes buying, selling or renting of residential and non-residential properties. The specific type and amount of stamp duty payable depend on the type of transaction and the property's characteristics.

Types of Stamp Duty in Singapore

Understanding the different types of stamp duty applicable to your situation is crucial. Here's a breakdown of the key categories:

• Buyer's Stamp Duty (BSD): This is the most common type of stamp duty paid by property buyers in Singapore. The amount of BSD payable is calculated based on the purchase price of the property or market value of the property, whichever is higher and the buyer's profile.

• Additional Buyer's Stamp Duty (ABSD): This is an additional layer of tax levied on top of the BSD for certain property purchases. The additional tax imposed on certain groups of buyers, including Singaporeans purchasing their second and subsequent properties, permanent residents (PRs) buying their first and subsequent properties, and foreigners. The ABSD rate vary depending on the buyer's residency status and the number of residential properties they already own.

• Seller's Stamp Duty (SSD): This tax is payable by sellers of residential properties within a stipulated period after their purchase. The SSD rates and holding periods vary based on the type of property and the date of purchase. The SSD rate is tiered and decreases over time.

• Lease Duty: Lease duty is applicable to rental agreements and is usually paid by the tenant. It is calculated based on the annual rent and the lease term.

Understanding the nuances of each type of stamp duty is crucial for accurate financial planning. We'll delve deeper into each category in the following sections.

Understanding Buyer's Stamp Duty (BSD)

The Buyer's Stamp Duty (BSD) is the primary tax most property buyers encounter in Singapore. The amount payable is calculated based on a tiered structure, with different rates applying to various price brackets. Here's a breakdown of the BSD structure (as of May 30, 2024):

• First S$180,000: 1%

• Next S$180,000: 2%

• Next S$640,000: 3%

• Remaining Amount: 4% (for residential properties) or 3% (for non-residential properties)

Example: If you're purchasing a residential property for S$1,000,000, your BSD calculation would be as follows:

• BSD on first S$180,000: S$1,800 (1% x S$180,000)

• BSD on next S$180,000: S$3,600 (2% x S$180,000)

• BSD on next S$640,000: S$19,200 (3% x S$640,000)

• BSD on remaining S$180,000 (S$1,000,000 - S$800,000): S$7,200 (4% x S$180,000)

• Total BSD Payable: S$31,800

Important Considerations:

• The BSD is rounded down to the nearest dollar.

• A minimum duty of S$1 applies even for properties with a purchase price below S$180,000.

Understanding Additional Buyer's Stamp Duty (ABSD)

The Additional Buyer's Stamp Duty (ABSD) is an additional layer of tax levied on top of the BSD for specific property purchases. The ABSD rate depends on the buyer's residency status and the number of existing residential properties they own. Here's a breakdown of the ABSD rates (as of May 30, 2024):

Important Considerations:

• The ABSD applies to the total purchase price of the property.

• Exemptions and reliefs from ABSD may apply in certain situations, such as inheritance or purchase of an executive condominium (EC) by a Singapore Citizen couple. It's advisable to consult with a qualified tax advisor to determine if you're eligible for any exemptions.

Understanding Seller's Stamp Duty (SSD)

The Seller's Stamp Duty (SSD) is a tax payable by sellers of residential properties within a specific timeframe following their purchase. The purpose of the SSD is to discourage property speculation and promote a more stable housing market. The SSD rate is tiered and decreases over time, as shown below (as of May 30, 2024):

Important Considerations:

Example: If you purchased a residential property for S$800,000 and sell it within 2 years, your SSD would be S$96,000 (12% x S$800,000).

Important Considerations:

• The SSD is calculated on the original purchase price of the property, not the selling price.

• There are exemptions from the SSD for certain situations, such as selling your primary residence or selling due to unforeseen circumstances. It's recommended to consult with a qualified tax advisor to understand your eligibility for exemptions.

Is Stamp Duty Paid by Tenant or Landlord?

In Singapore, the responsibility of paying stamp duty depends on the type of transaction:

• For property purchases, the buyer is responsible for paying the stamp duty.

• For rental agreements, the tenant usually pays the lease duty.

How to Calculate Property Tax

While not directly related to stamp duty, property tax is another essential cost associated with property ownership in Singapore. Property tax is levied annually on the Annual Value (AV) of the property, which is an estimate of the annual rent the property could fetch on the open market. You can estimate your property tax using the IRAS property tax calculator (https://www.iras.gov.sg/taxes/property-tax).

1. Owner-Occupied Residential Properties

   For owner-occupied residential properties, the tax rates are progressive, starting at 0% for the first $8,000 of AV, and increasing in increments based on the AV.

2. Non-Owner-Occupied Residential Properties

   For non-owner-occupied residential properties, the tax rates start at 10% of the first $30,000 of AV, and increase progressively.

3. Commercial and Industrial Properties

   For commercial and industrial properties, a flat tax rate of 10% of the AV is applied.

How to Pay Stamp Duty in Singapore

Stamp duty can be paid electronically using various methods, including internet banking, AXS machines, and SingPost SAM kiosks. Detailed instructions on how to pay stamp duty can be found on the IRAS website (https://www.iras.gov.sg/taxes/stamp-duty/for-property).

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