On Thursday (Apr 27), the extra buyer’s stamp duty (ABSD) for non-Singaporeans purchasing a residential property in Singapore was raised from 30% to 60%.
The government made announced this sharp hike along with other cooling measures late Wednesday night.
The ABSD rate for Singaporeans purchasing their second home will rise to 20% from the previous rate of 17%, while the rate for Singaporeans purchasing their third or subsequent homes will climb to 30% from the previous rate of 25%.
Permanent residents purchasing a second home pay the same 30 percent charge. The ABSD for PRs purchasing a third or subsequent home increases from 30% to 35%.
Since December 2021, this is the third set of cooling measures to be implemented.
The Ministry of Finance (MOF), the Ministry of National Development (MND), and the Monetary Authority of Singapore (MAS) released a joint statement on Wednesday night explaining that the hikes in ABSD are intended to “promote a long-term viable property economy and prioritise homes for owner buying for own stay.”
They mentioned the “moderating effect” the previous actions in December 2021 and September 2022 had. But there were “renewed signs of increase amid robust demand” in the 1st quarter of 2023 for real estate prices.
Authorities have noted a “particularly strong demand from locals purchasing homes for owner-occupation,” as well as “renewed interest” from both domestic and international investors in the country’s residential property market.
A prolonged rise in prices relative to incomes is possible if price increases are allowed to outpace the growth of the economy.
According to projections for 2022, the ABSD hikes will impact around 10% of home sales.
Based on statistics from 2022, the ABSD rates will not change for Singapore citizens and permanent residents buying their first residential property, which accounts for over 90% of residential property transactions.
Synopsis of the updated ABSD percentages.
It was announced by the Ministry of Finance, Ministry of National Development, and the Ministry of Finance of Malaysia that the highest applicable ABSD rate would be applied to purchases done jointly by two or more companies with distinct profiles.
Until further notice, ABSD refunds will still be available to married couples with at least one Singaporean spouse who jointly acquire a second residential property.
The first home must be sold within six months of the date of purchase of the second home, if the second home is already built, or the date of issue of the second home’s Temporary Occupation Permit (TOP) or Certificate of Statutory Completion (CSC), whichever is earlier, if construction on the second home has not yet been completed.
If one of the joint acquirers or buyers is a Singaporean, the ABSD does not apply to the purchase of a HDB apartment or executive condominium unit from a housing developer with an upfront remission. This policy will remain unchanged.
Temporary Measures
All residential properties bought on or after April 27, 2023 will be subject to the new ABSD tariffs.
For situations that match all of the following criteria, there will be an interim provision where the ABSD rates in force on or before April 26, 2023 will apply.
- Sellers extended the OTP to prospective purchasers with a purchase date on or before April 26, 2023.
- There has been no change to this OTP after April 27, 2023.
- This OTP must be used by May 17, 2023; else, it will expire unused.
This is because the maximum rate of additional conveyance duties for buyers (ACDB) will increase from 46% to 71% for qualified purchases of equity interest in PHEs.
At least half of the PHE’s total physical assets must be located in Singapore in order for it to be considered a PHE.
