Additional Buyer’s Stamp Duty (ABSD) For Residential Properties Transferred Into A Living Trust

The Government announced today that Additional Buyer’s Stamp Duty (ABSD) of 35% will apply on any transfer of residential property into a living trust^[1] , where the transfer occurs on or after 9 May 2022. 

2. Today, when a residential property is transferred into a living trust, Buyer’s Stamp Duty (BSD) is payable. ABSD may also be payable, depending on the profile of the beneficial owner(s) of the residential property transferred into the trust. 

3. Where the living trust is structured such that there is no identifiable beneficial owner at the time when the residential property is transferred into the trust, ABSD currently does not apply. 

4. Arising from its periodic policy review, the Government will introduce ABSD (Trust) at 35%, to address and close this gap.  With this change, ABSD will be payable even if there is no identifiable beneficial owner at the time the residential property is transferred into a trust. ABSD aims to promote a stable and sustainable residential property market, and as such, it should apply to transfers of residential properties into all living trusts, irrespective of whether there are identifiable beneficial owners of the residential properties transferred into such trusts.

5. ABSD (Trust) is to be payable upfront, when the residential property is transferred into any living trust. As a concession, a trustee may apply to IRAS for a refund of ABSD (Trust), provided that the following conditions are met: 

a) All beneficial owners of the residential property are identifiable individuals;

b) Beneficial ownership of the residential property has vested in all of these beneficial owners at the time of property transfer into the trust; and

c) The beneficial ownership cannot be varied or revoked, or be subject to any condition subsequent, under the terms of the trust. 

The refund amount will be based on the difference between the ABSD (Trust) rate of 35% and the ABSD rate corresponding to the profile of the beneficial owner with the highest applicable ABSD rate. The application for the refund must be made to IRAS within six months after the instrument is executed. For more information, please visit www.iras.gov.sg.  

Issued by:

Ministry of Finance
Singapore 
8 May 2022

^[1] A living trust is one that is created by a person (the settlor) during his or her lifetime.

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ANNEX A 

The ABSD rates on or after 9 May 2022 are summarised at Table 1: 

¹Whether owned wholly, partially or jointly with others.

²As entities, Housing Developers will also be subject to the ABSD rate for entities. Housing Developers may apply for remission of this ABSD, subject to conditions.

³Housing Developers refer to entities in the business of housing development (i.e. construction and sale of housing units) with respect to the subject property acquired. These include trustees for housing developers, which will continue to be subject to an ABSD rate of 40% (i.e. 5% non-remittable; plus 35% remitted upfront subject to conditions). 

⁴This 5% ABSD for Housing Developers is in addition to the ABSD for all entities. This 5% will not be remitted, and is to be paid upfront upon purchase of residential property.

⁵ABSD (Trust) is payable by a trustee of any trust when acting in that capacity, but excludes the following: (a) trustee for a collective investment scheme when acting in that capacity; (b) trustee-manager for a business trust when acting in that capacity; and (c) trustee for a housing developer when acting in that capacity. (a)/(b) and (c) are already subject to ABSD (Entity) and ABSD for housing developers respectively, when they acquire residential property. 

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ANNEX B 

Frequently Asked Questions

1.         What is an identifiable individual beneficial owner?

 An identifiable beneficial owner of a trust residential property refers to an individual — 

a.         Identified in the trust deed or document as a beneficiary of the residential property; and

b.         Who, because of the trust, has beneficial ownership of the residential property that is not, under the terms of the trust, revocable, variable, or subject to any condition subsequent.

2.         Will ABSD (Trust) be retrospectively imposed for all Singapore residential properties that are held on trust before the date ABSD (Trust) comes into effect?

No. ABSD (Trust) is only applicable to any transfer or settlement of residential property into a trust (whether existing or new) that is executed on or after 9 May 2022.

Where there is more than one instrument effecting the transfer or settlement of residential property into a trust, ABSD (Trust) is payable based on the date of execution of the first instrument (e.g. ABSD (Trust) is payable within 14 days after the date of execution of the first instrument, if the instrument is executed in Singapore). The first instrument may be the Acceptance to the Option to Purchase, the Sale & Purchase Agreement, the declaration of trust, or the settlement agreement, where applicable.