With its thriving real estate market, many individuals in Singapore seek opportunities to expand their property portfolio. However, the Additional Buyer’s Stamp Duty (ABSD) imposes a significant financial burden on these investments. This article outlines key strategies on how to avoid ABSD and facilitates your journey in buying a second property in Singapore without ABSD.
Understanding ABSD in Singapore
The government introduced ABSD as a regulatory measure to cool the property market. It applies to local and foreign property buyers purchasing their second or subsequent residential properties. Here’s a brief overview:
- 5% for Singapore Citizens buying their second property.
- 15% for Permanent Residents buying their first property.
- 20% for foreigners and entities.
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Strategies to Avoid ABSD Singapore
It is crucial to explore legitimate methods of avoiding ABSD Singapore to save a substantial amount of money. Here are some effective strategies:
1. Decoupling (Transfer of Ownership)
Decoupling involves transferring ownership of one property to one spouse, allowing the other to purchase a second property as a first-time buyer.
2. Buying Under a Trust
Another method to skirt around the ABSD is to buy the property under a trust for your children. Certain conditions apply, and it often requires seeking legal advice.
3. Foreign Purchase via Entities
For foreign investors, purchasing through entities such as companies or setting up a limited liability partnership (LLP) can help navigate ABSD regulations strategically.
4. Immigration Status
By becoming a Permanent Resident or Citizen, you can benefit from lower ABSD rates. It’s an investment in your status that can pay off significantly in the long run.
FAQs on Avoiding ABSD in Singapore
- Q: Can I buy a commercial property to avoid ABSD?
- Q: Is there any other tax applicable apart from ABSD?
- Q: Are there any risks associated with decoupling?
- Q: Does ABSD apply to inherited properties?
A: Yes, ABSD only applies to residential properties. Investing in commercial properties can help you avoid these additional costs.
A: Yes, the standard Buyer’s Stamp Duty (BSD) is still applicable to all property purchases.
A: Yes, decoupling can involve various legal complications and financial implications, such as refinancing challenges and potential divorce contingencies.
A: No, ABSD does not apply to properties received through inheritance.
The Final Word
Expanding your property ownership in Singapore requires a mindful approach to how to avoid ABSD. By applying these strategies carefully, you can successfully navigate through the process of buying a second property in Singapore without ABSD. Always consider professional advice to ensure compliance with legal and financial regulations.