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What are the Methods to avoid ABSD and Own Multiple Properties in 2021

Updated: Feb 23


The Additional Buyers Stamp Duty (ABSD) is the bogeyman facing property investors.


Even if you can afford to pay it, the hefty stamp duty gobbles up a huge chunk of your eventual returns.


But is there a “loophole“ or a way around it?

Here are some legal ways to save on ABSD and get started on owning your second or subsequent property:

First, a quick summary of ABSD rates in Singapore to jolt your memory.

Source: Ministry of National Development


The ABSD is a tax applied to residential property purchases in Singapore. The ABSD is a percentage of your property price or valuation, whichever is higher.


Singapore citizens pay ABSD of 12 per cent on their second property purchase, and 15 per cent on the third or subsequent property purchase.

Singapore Permanent Residents pay ABSD of 5 per cent on their first property purchase, and 15 per cent on all subsequent purchases.

Foreigners* pay 20 per cent ABSD on property purchases.


Entities pay 25 per cent ABSD on property purchases (this is relevant if you intend to buy the property through your company. Although this is seldom the approach this days.).


*United States citizens pay the same ABSD rates as Singapore citizens; citizens and Permanent Residents of Iceland, Lichtenstein, Norway, and Switzerland can apply for ABSD remission. This is under FTAs that are in effect at the time of writing. Foreigners should check with their respective authorities on whether their home country’s taxes will also apply on top of the ABSD.


How do you save on ABSD and own multiple properties then?

There are only a few ways to legally save on ABSD:


1. Buying under only 1 owner for a property so that the spouse can buy another under their own name

2. Decoupling an owner from a current property to free up one name

3. "Unofficially" buying under a child more than 21 years old

4. Buying Under A Property Trust under a child below 21 years old

Or as a “left field” alternative, you can consider investing in commercial real estate instead (more on this below)


1. Buying under only 1 owner for a property so that the spouse can buy another under their own name


This is the most straightforward way to have two properties in the family.

When purchasing your first home, such as a flat or condominium, just make sure that you or your spouse is not listed as the co-owner. In the case of a HDB flat, just list them as an occupier.

Take note: Not being listed as an owner means a party's CPF cannot be utilised and incomes cannot be considered upon for loan applications.

This also means that only the listed owner is obliged by law to pay the mortgage (You would have to work out between yourselves how to split the monthly bills.)

Later on, when your spouse purchases a private property, they can do so as a first-time home buyer and not pay ABSD (or only pay five per cent ABSD if they are a Permanent Resident).

The considerations for this method are:

- Only the CPF Ordinary Account funds of the sole owner can be used.


- The sole owner must meet the income requirements to qualify for the home loan.

For brand new executive condominiums and HDB flats, the loan repayments cannot exceed 30 per cent of the sole borrower’s gross monthly income (This is known as Mortgage Servicing Ratio).

For private properties and resale executive condominiums, the home loan – plus all existing debt obligations – cannot exceed 60 per cent of the sole borrower’s gross monthly income. (This is known as Total Debt Servicing Ratio).

There must be acceptance between all parties that, legally speaking, the sole owner is the one who holds the deed to the property; even if in reality their partner contributes as much or more to the mortgage.

Typically, I would recommend that the higher income owner would hold the higher value property.

Apart from qualifying for the loan, this would support future portfolio growth plans when you gear up a property and free up equity when it appreciates in value.

2. Decoupling an owner from a current property to free up one name

This is when one co-owner transfers their share of ownership of the property to the other co-owner(s).