Singapore Doubles Tax for Foreigners’ Home Purchases
On Thursday, April 27, Singapore increased taxes on private property purchases, doubling stamp duties for foreigners to an eye-watering 60% from the previous 30%.
Authorities are closely monitoring the value of properties in Singapore, where real estate is a haven for wealthy foreign investors. This is to make sure housing remains affordable for locals and to keep pace with the economy’s fundamentals.
For Singaporeans and permanent residents, there will also be increases to the Additional Buyer’s Stamp Duty (ABSD), but they will be much smaller and only apply to their second and later properties.
In this Pacific Prime Singapore article, we will go through the details of Singapore’s doubling tax for foreigners’ home purchases.
Stamp Duties in Singapore
If you’re planning to buy a property in Singapore, whether you’re going to live there yourself or if it’s for investment purposes, there are many factors to consider. One of the factors is the Buyer’s Stamp Duty, also known as BSD. This applies to all real estate transactions.
Below, whichever is priced higher determines how much BSD you’re required to pay:
The asking price of the property (specified in the sale and purchase agreement)
The property’s market value (determined by valuations for the property)
For example, the Buyer’s Stamp Duty rate will be determined using the higher of the two amounts, even if you are able to bring an apartment priced at $2 million down to $1.8 million.
You have two weeks, or fourteen days, starting on the day the sale was completed, to pay for the BSD. However, if you’re outside of Singapore, you have a maximum of 30 days to pay for BSD once you get the required documents.
It’s very important to have enough money to pay in full since you cannot pay in installments.
Additional Buyer’s Stamp Duty (ABSD) is another type of stamp duty that you as a buyer might have to pay. The amount of ABSD you must pay depends on a number of factors, including your residency status and the number of properties you are buying.
The rate of Additional Buyer’s Stamp Duty (ABSD) applicable to Singaporeans for purchasing their second residential property has been raised from the previous rate of 17% to 20%. Those buying their third or more homes will be subjected to an increased rate of 30%, which is higher than the prior rate of 25%.
What is the Double Tax?
The demand for real estate is driving Singapore to raise tax rates. As the COVID-19 pandemic subsides and border restrictions are lifted, more buyers are buying properties and driving up prices.
With limited properties on the market, slower construction rates for new properties, and many expats moving to Singapore post-pandemic, this caused rentals to spike in price. That said, officials believe that once construction projects are completed, the situation will likely improve.
Additional Buyer’s Stamp Duty
Rates from December 16, 2021 to
April 25, 2023
New Rates
on/after
April 27, 2023
Singapore Citizens
1st Residential Property
0%
0% – No change
2nd Residential Property
17%
20%
3rd Residential Property
25%
30%
Permanent Citizens
1st Residential Property
5%
5% – No Change
2nd Residential Property
25%
30%
3rd Residential Property
30%
35%
Foreigners
Any Residential Property
30%
60%
High-Net Worth People Moving to Singapore
Wealthy people across Asia have become interested in Singapore’s real estates because they view it as an investment opportunity. In 2022, a Chinese citizen purchased 20 apartments at CanningHill Piers, an apartment complex on the Singapore River, for more than SGB 85 million.
Over the years, the number of family offices—companies created to oversee the wealth of Asia’s wealthy families—has slowly increased. The Monetary Authority of Singapore’s recent predictions point out that there were around 400 family offices at the end of 2020, and that number rose to about 700 by the end of 2021.
According to Sharon Yam, regional head of Asia-Pacific at fund administration outfit Ocorian, around 1,000 family offices are estimated to be found in Singapore this year. Locals are charged at a lower rate for new properties unlike the wealthy group who have to pay higher taxes.
About Pacific Prime Singapore
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So, get in touch with Pacific Prime Singapore today for a FREE quote or unbiased advice.
Natchapol Meelarbsuk is a Content Creator at Pacific Prime. With 3+ years of experience in content writing in different industries, he is a well-rounded person ready to tackle any piece. Writing is something that he enjoys and is confident in.
He’s a third culture kid who left Thailand when he was 5 before returning at 17. He attended an American school in New Delhi, India before moving to a private school in London, England. Pete has a bachelor’s degree in Communication Arts from Bangkok University International College. In his free time, he enjoys playing video games, watching movies
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