In Singapore, you are obligated to pay property taxes if you own real estate. Your income tax, rental tax, and stamp duty are not the same as these taxes. When you buy a property, you must pay stamp duty as well as income taxes and rental taxes, which are only relevant to specific property owners.
Property taxes, commonly referred to as wealth taxes, are levied against property owners. However, because the property tax singapore assessed varies each year, the majority of property owners are not aware of how these taxes are computed.
Additionally, after the release of Budget 2022, both owner-occupied and non-owner-occupied residential properties in Singapore would see an increase in property tax rates starting in 2023.
Owner occupiers Tax Rates
Non Occupier Tax Rates
When setting a budget for a home or investment property, a buyer takes more than just the property’s purchase price into account. You must also calculate the cost of the related taxes, which are due to Singapore’s Inland Revenue Authority (IRAS).
With a few rare exceptions, stamp duties are almost always required when buying residential property in Singapore.
What Exactly Is Singapore’s Buyer’s Stamp Duty?
Buyer Stamp Duty is a tax on paperwork associated with the sale or rental of real estate. BSD is a tax that Singapore imposes on all real estate purchases, including those of HDB apartments. Only the buyer is subject to the tax.
Whichever of the following is higher determines the amount of BSD you must pay:
- The cost of purchasing the property (as stated in the signed sale and purchase agreement)
- The property’s market worth, as determined by appraisal reports for the property.
In Singapore, when and how do you go about paying my buyer’s stamp duty?
When the sale is executed, you have 14 days to pay the buyer’s stamp duty. The BSD must be paid within 30 days of obtaining the paperwork in Singapore if the transaction takes place overseas. You must make sure you have enough money to pay the complete fee because you cannot pay for the BSD in installments.
The sellers and buyers personal information, the property’s address, and the property’s price are all details you should have ready in advance.
What If You Pay My Buyer’s Stamp Duty Lately?
IRAS will take legal action against you if you don’t pay your buyer’s stamp duty in Singapore by the due date. When the payment is not made by the deadline, a demand note will be delivered to you as a reminder.
If the time has passed but it hasn’t been more than three months, you must pay a penalty of $10 or the amount of duty due, whichever is higher.
The penalty is whichever is bigger of the two: $25, or a whopping four times the duty due, if your delay lasts longer than three months.
Additional Buyer’s Stamp Duty (ABSD): What Is It?
The Buyer’s Stamp Duty (BSD) is a tax that property buyers in Singapore must pay when they purchase a property. The ABSD is calculated based on the valuation or the selling price of the property, whichever is higher.
Who in Singapore Must Pay ABSD?
The following set of purchasers is subject to the property’s ABSD rates:
Singaporean nationals : The second (17%) and subsequent (25%) property purchases will be subject to an ABSD charge.
Permanent Residents (PRs) of Singapore : All purchases in PR will be subject to ABSD, with the initial purchase’s ABSD rate beginning at 5%. The price for the second purchase will be 25%, and the ABSD rate for the third and any additional purchases will be 30%.
Singapore ABSD Payment Procedure
You can use NETS, a check, or a cashier’s order to pay for your ABSD online using the e-Stamping Portal.
As an alternative, you can also pay at SingPost Service Bureaus or IRAS Surf Centre e-Terminals (located in Chinatown, Novena, Raffles Place, and Shenton Way). You cannot pay these stamp duties in installments; they must be paid in full.
To pay ABSD, you can utilize your CPF. Following payment of these fees, you may be eligible for a reimbursement from your CPF account.
Keep in mind that the sale and purchase agreement must be signed within 14 days of the ABSD becoming due.
Conclusion
To calm the property market, Singapore introduced a package of policies that included higher stamp fees and stricter lending restrictions.
The increased additional buyer stamp duty (ABSD) rates will also be a fiercely discussed subject among investors and buyers of real estate given the new property cooling policies. Unsurprisingly, not many people support the policy; after all, it is an additional tax designed to deter purchases by raising the cost of real estate in Singapore and penalizing foreigners and companies for speculating.
Because of this, many buyers of real estate search for exceptions and “loopholes” to avoid paying the additional tax. These may very well be effective, but there are times when it may be simpler and less expensive to just pay the ABSD.
