Real estate in Singapore will become more expensive

05.05.2023 The Singapore government has doubled the rates of additional stamp duty on the purchase of real estate (additional buyer's stamp duty – "ABSD" - Approx.).

The increase is "a proactive measure to reduce the demand for residential real estate from local and foreign investors", and also gives Singapore citizens the opportunity to purchase housing for living.

The ABSD rate has been raised from 30% to 60% for any purchase of residential real estate by foreigners. The ABSD rate for trust owners purchasing residential real estate was increased from 35% to 65% in May 2022.
The duty was also increased by 3-5% for citizens and permanent residents of Singapore when they purchase second and third residential real estate.

The ABSD rate will be determined by a combination of the buyer's aspects at the date of purchase of the property. These include: whether the buyer is a natural or legal person and whether he is a citizen of Singapore, a permanent resident of the country or a foreigner. The amount of residential real estate owned by the buyer is also taken into account, including residential real estate that is in beneficial ownership and in trust management, but excluding all residential real estate located outside Singapore, as well as whether residential real estate will be in trust management.

There are transitional provisions for buyers who have signed options to purchase real estate before the new rates come into force. However, according to representatives of the Singapore Tax Authority, no more concessions will be made. Officials warned that the state has the right to counteract tax evasion measures in accordance with the Stamp Duty Act and impose a 50 percent surcharge on the additional duty payable. Recent reports indicate that the Office also tried to verify some real estate purchase agreements that were concluded with the possible intention of avoiding ABSD.

Thanks to Singapore's Free Trade Agreements with the European Free Trade Association and the United States, citizens and permanent residents of Iceland, Liechtenstein, Norway or Switzerland, as well as US citizens have the right to purchase Singapore residential real estate at the same stamp duty rate as Singapore citizens.

Link to source: https://www.mas.gov.sg/news/media-releases/2023/measures-for-a-sustainable-property-market
                          https://www.iras.gov.sg/docs/default-source/stamp-duty/absd-fact-sheet.pdf