Tax Avoidance Cases Found and Amounts Clawed Back under "99-to-1" Arrangement for Property Purchases

Parliamentary Question by Ms He Ting Ru:

To ask the Deputy Prime Minister and Minister for Finance with regard to the "99-to-1" arrangement for payment of stamp duty in a property purchase (a) how many audits have been conducted to date; (b) how many tax avoidance cases has IRAS found; (c) what is the total amount of unpaid additional stamp duty that has been clawed back by IRAS so far; and (d) how many instances has IRAS levied the 50% surcharge on the additional duty payable.

Parliamentary Question by Ms He Ting Ru:

To ask the Deputy Prime Minister and Minister for Finance in relation to the IRAS investigations into a “99-to-1" arrangement for stamp duty payment for property purchases (a) to date, how many referrals has IRAS made to (i) the Council for Estate Agencies and (ii) the Law Society; (b) whether there are any findings that the Government has to share about the results of this referral; and (c) whether the Government will be looking to assist individuals who have been misadvised by estate agents and lawyers to obtain compensation.

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Parliamentary Reply by Deputy Prime Minister, and Minister for Finance, Mr Lawrence Wong:

The “99-to-1” arrangement is a tax avoidance arrangement used by some property buyers to reduce the rightful Additional Buyer’s Stamp Duty (ABSD) payable on the purchase of a residential property.

When such property purchase arrangements are made to reduce the tax payable, the Commissioner of Stamp Duties is empowered under Section 33A of the Stamp Duties Act to disregard the individual transactions and assess them as a single joint purchase, and to recover the rightful amount of ABSD due, along with a 50% surcharge.

As of April 2024, IRAS has completed the review of 187 such “99-to-1” cases, of which 166 cases were found to have involved tax avoidance, andabout $60 million in ABSD and surcharges will accordingly be clawed back.

Out of the 166 cases found to have involved tax avoidance, about 10 cases with evidence of potential involvement by property agents are currently under review by the Council for Estate Agencies (CEA).