What is ABSD (Additional Buyer Stamp Duty)
ABSD, Additional Buyer Stamp Duty, was introduced in December 2011 as a measure to regulate the demand of residential property in Singapore. On top of the normal BSD, Buyer Stamp Duty, liable property buyers will be required to pay this additional tax computed from the purchase price or valuation, whichever is higher. You will be liable for ABSD if you fall into one of the below category:
- Singaporean purchase a 2nd or subsequent property
- SPR, Singapore Permanent Resident buying 1st or subsequent property
- Foreigner buying any property
ABSD Rates In Singapore
ABSD rate is calculated on basis on the profile of the buyer(s). The table below indicates the percentage of ABSD liable for different buyer(s) profile. If you are buying the property with another buyer of a different profile, the higher ABSD rate will be used.
|Profile of Buyer||ABSD Rates on / after 8 Dec 2011||ABSD Rates on/after 12 Jan 2013||ABSD Rates on/after 6 Jul 2018||ABSD Rates on/after 16 Dec 2021|
|SC 1st property*||NA||NA||NA||NA|
|SC 2nd property*||NA||7%||12%||17%|
|SC 3rd & more property*||3%||10%||15%||25%|
|SPR 1st property*||NA||5%||5%||5%|
|SPR 2nd property*||3%||10%||15%||25%|
|SPR 3rd & more property*||3%||10%||15%||30%|
|FR any property*||10%||15%||20%||30%|
*Residential Property – Whether owned wholly, partially or jointly with others.
NA – Not Applicable SC – Singapore Citizen
SPR – Singapore Permanent Resident FR – Foreigner
When do I need to pay ABSD?
ABSD is payable within 14 days from the date of purchase/acquisition. The date of purchase refers to the document executed as at the point of purchase:
- Date of execution of the Acceptance to the Option to Purchase or
- Date of Sale & Purchase Agreement or
- Date of transfer where (1) and (2) are not applicable
Can I use my CPF For ABSD?
Yes, you may use your CPF to pay for the ABSD.
Then again, there a few things to take note when using CPF to pay for either BSD or ABSD.
- If you are purchasing a completed / resale property, the ABSD (and BSD) amount have to be paid in cash first and after which reimbursed from your CPF Ordinary Account at a later date (usually 2 to 3 weeks after).
- If you are purchasing a property that is still under construction, ie New Launches Condominiums, ABSD (and BSD) can be paid directly from CPF Ordinary Account.
- ONLY funds from CPF Ordinary Account can be utilised.
- If the purchased property is a 2nd property using CPF, you will have to set aside the Basic Retirement Sum (BRS) amount and only able to utilise the amount in excess of the BRS amount.
You may apply for ABSD Remission if the conditions are met as follows:
- Property is joint purchase by a married couple with both names comprising of at least 1 Singapore Citizen where both the spouse do not own any residential property at the point of purchase.
- Property is purchased by a foreigner, who is a National or Permanent resident under respective Free Trade Agreements (FTA) as follows:
- Nationals and Permanent Residents of Iceland, Liechtenstein, Norway or Switzerland
- Nationals of the United States of America
To apply for ABSD Refund, the Property must be jointly purchased by a married couple with both husband’s and wife’s names and at the same time comprise of at least a Singapore Citizen. Conditions have to be met to be eligible for the refund. For more information on the conditions, you may refer to this here.
ABSD Refunds are usually applicable when purchasers intend to sell off their current house but chose to purchase the next private residential property first. However, there will be a time constraint factor for this procedure i.e to sell of the current house within a stipulated time.
For a Singapore Citizen or Singapore Permanent Resident property investors looking to purchase a 2nd or subsequent property, Additional Buyer Stamp Duty (ABSD) is a hefty sum to pay, in addition to the essential Buyer Stamp Duty (BSD). You will be paying between a range of 17% to 25% additional to the purchase price. In such instance, the rental yield and your capital gain margin (upon selling the investment property) will be affected drastically with the higher purchase price, the rental yield and your capital gain margin (upon selling the investment property) will be affected drastically.
On the positive side, we are glad that there are still many ways to avoid ABSD together with means of restructuring of your property portfolio. In such instances, we would like to highlight that not everyone is suitable for these approaches. Be sure to make detailed planning and assessment before jumping into any action on the opportunity.