Additional Buyer’s Stamp Duty (ABSD) can be a significant consideration when looking to purchase a second property in Singapore. In order to wise up to these potential costs, it’s important to know how to avoid ABSD legally and effectively. Below are some strategic tips on how to buy a second property in Singapore without ABSD.
Understand ABSD and Its Implications
The government imposes ABSD to cool the property market. Knowing the rates and who it applies to is the first step in your journey. For Singapore Citizens (SC) buying a second property, the rate is 12%, whereas Permanent Residents (PR) will face an ABSD of 15%. Foreigners and entities are subject to higher rates.
Strategies to Avoid or Mitigate ABSD
- Purchase under a Different Name: One common strategy is to purchase the second property under the name of a trusted family member or spouse who does not own any property.
- Decoupling: This involves transferring ownership of an existing property solely to one spouse. This allows the other spouse to purchase a new property without incurring ABSD.
- Buy Commercial Properties: Commercial properties are not subject to ABSD, making them a viable alternative.
- Setting Up a Company: Although more complex and costly, acquiring properties through a company can be another way to bypass ABSD regulations.
Read more about How to avoid ABSD here.
Steps on How to Buy a Second Property in Singapore Without ABSD
- Research: Gain a thorough understanding of property market trends and ABSD regulations.
- Financial Planning: Determine your budget and financing options, including mortgage clauses.
- Consultation: Seek professional advice from property agents and legal advisors who specialize in ABSD mitigation.
- Documentation: Ensure all necessary paperwork is in order, especially if opting for decoupling or purchasing under a different name.
- Final Acquisition: Follow through with the purchase process, including submitting the correct forms to IRAS to avoid future complications.
Frequently Asked Questions (FAQs)
Q: Can I avoid ABSD if I am a foreigner?
A: Avoiding ABSD Singapore regulations as a foreigner is more complex, but options include purchasing commercial properties or setting up a company for property acquisition.
Q: What are the risks involved in decoupling?
A: Decoupling can involve legal costs and may impact your mortgage. Always consult a legal advisor to understand the full implications.
Q: Is there a limit to the number of properties I can own without incurring ABSD?
A: For Singapore Citizens, ABSD applies from the second property onwards. Permanent Residents incur ABSD from their first property.
Leveraging these strategies can make your property acquisition process smoother and more cost-effective, allowing you to navigate Singapore’s complex property market with ease.
