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The Singapore government will raise the Additional Buyer’s Stamp Duty (ABSD) rates further to pre-emptively manage investment demand and to promote a sustainable property market.

A joint press release by Ministry of National Development (MND), Ministry of Finance (MOF) and Monetary Authority of Singapore (MAS) on April 26 night said the revised rates will take effect immediately from April 27, 2023.

More cooling measures

The implementation of the property market measures in December 2021 and September 2022 have had a moderating effect, the press release said.

However, in the first quarter of 2023, property prices showed renewed signs of acceleration amid resilient demand.

Demand from locals purchasing homes for owner-occupation has been especially strong, and there has also been renewed interest from local and foreign investors in our residential property market, the statement also said.

"If left unchecked, prices could run ahead of economic fundamentals, with the risk of a sustained increase in prices relative to incomes," the statement added.

This is the third round of cooling measures since December 2021.

ABSD rates increase

The specific ABSD rates increases are as follows:

• Raise ABSD rate from 17 per cent to 20 per cent for Singapore citizens purchasing their second residential property
• Raise ABSD rate from 25 per cent to 30 per cent for Singapore citizens purchasing their third and subsequent residential property, and Singapore permanent residents purchasing their second residential property
• Raise ABSD rate from 30 per cent to 35 per cent for PRs purchasing their third and subsequent residential property
• Raise ABSD rate from 30 per cent to 60 per cent for foreigners purchasing any residential property
• Raise ABSD rate from 35 per cent to 65 per cent for entities or trusts purchasing any residential property, except for housing developers

0% ABSD for Singapore citizens buying 1st residential property

The ABSD rates for Singapore citizens and PRs purchasing their first residential property, which constitutes about 90 per cent of residential property transactions based on 2022 data, will remain at 0 per cent and 5 per cent respectively.

Based on 2022 data, the above ABSD rate increases will affect about 10 per cent of residential property transactions.

How will rules apply

For acquisitions made jointly by two or more parties of different profiles, the highest applicable ABSD rate will apply.

Married couples with at least one Singapore citizen spouse, who jointly purchase a second residential property, can continue to apply for a refund of ABSD, subject to conditions.

These conditions include selling their first residential property within six months after the date of purchase of the second residential property if this is a completed property, or the issue date of the temporary occupation permit (TOP) or certificate of statutory completion (CSC) of the second residential property, whichever is earlier, if the second property is not completed at the time of purchase.

The ABSD currently does not affect those buying an HDB flat or executive condominium unit from housing developers with an upfront remission, if any of the joint acquirers/ purchasers is a Singapore citizen.

There will be no change to this policy.

Cut-off date

The revised ABSD rates will apply to all residential properties acquired on or after April 27, 2023.

There will be a transitional provision, where the ABSD rates on or before April 26 will apply for cases that meet all the conditions below:

• The option to purchase (OTP) was granted by sellers to potential buyers on or before April 26, 2023
• This OTP is exercised on or before May 17, 2023, or within the OTP validity period, whichever is earlier; and This OTP has not been varied on or after April 27, 2023.

Correspondingly, the Additional Conveyance Duties for Buyers (ACDB), which applies to qualifying acquisitions of equity interest in property holding entities (PHEs) will be raised from up to 46 per cent to up to 71 per cent.

Top photo via Unsplash