Stamp duty is a tax on documents relating to immovable properties, stocks or shares. Stamp duty is computed based on the consideration or market value of the relevant asset, whichever is higher.
In recent years, stamp duty has been used as a property cooling measure in Singapore to moderate the investment demand for residential properties and industrial properties.
There are three types of stamp duties for immovable properties:
a) Buyer’s Stamp Duty;
b) Seller’s Stamp Duty; and
c) Additional Buyer’s Stamp Duty.
Buyer’s Stamp Duty (BSD)
BSD is levied on all purchases of property e.g. residential, commercial or industrial properties.
Seller’s Stamp Duty (SSD)
In February 2010, the Government imposed SSD on sellers who buy (or acquire) residential properties on or after 20 February 2010 and sell (or disposed of) them within one year of acquisition. SSD is applied on sale of residential property within the holding period, as part of the Government’s measures to ensure a stable and sustainable property market. The SSD was revised on 30 August 2010, 13 January 2011, and 10 March 2017.
SSD is also applicable on the sale of industrial properties bought on or after 12 January 2013.
Additional Buyer’s Stamp Duty (ABSD)
The ABSD was introduced on 8 December 2011. It aimed to moderate strong investment demand by local and foreign buyers of residential property. ABSD aims ensure that residential property remains affordable for Singaporeans and that the prices move in tandem with economic fundamentals. ABSD apply on top of BSD payable on the purchase of immovable residential properties in Singapore. The ABSD rates were raised on 12 January 2013 to stabilise the residential property market and avert the risk of a more drastic price correction in the future, which could have a destabilising effect on the economy.
The relevant SSD and ABSD rates can be found on IRAS website at www.iras.gov.sg.