Liability of Investors for Additional Buyer's Stamp Duty and Other Taxes for Owning Multiple Properties
Ministry of FinanceSpeakers
Summary
This question concerns the tax treatment of fractional ownership investment products in residential properties, as raised by Ms He Ting Ru regarding investor liability for stamp duties. Deputy Prime Minister and Minister for Finance Lawrence Wong stated that direct property acquisitions attract Buyer’s Stamp Duty (BSD) up to 6% and Additional Buyer’s Stamp Duty (ABSD) up to 65%. For share acquisitions in Property Holding Entities, Share Duty and Additional Conveyance Duties apply if thresholds are met, including a flat 65% ABSD rate. Liability depends on the investment structure; investors are not subject to stamp duty if they do not receive beneficial interest or ownership of the underlying property. Deputy Prime Minister and Minister for Finance Lawrence Wong added that the Government will continue monitoring the market to ensure stability and sustainability.
Transcript
5 Ms He Ting Ru asked the Deputy Prime Minister and Minister for Finance with regard to investment products purporting to offer fractional ownership of Singapore residential properties (a) what is the Additional Buyer’s Stamp Duty (ABSD) treatment of the investment vehicle; and (b) whether the investors are liable for ABSD and other taxes associated with owning more than one property.
Mr Lawrence Wong: Stamp duty is a tax on documents that effect a transfer of interest in immovable property and unlisted stocks or shares in Singapore.
Buyers directly acquiring residential property in Singapore will have to pay Buyer’s Stamp Duty (BSD) of up to 6% and Additional Buyer’s Stamp Duty (ABSD) of up to 65%, based on their ABSD profile.
On the other hand, those who acquire shares in a Property Holding Entity (PHE)1, pay Share Duty and Additional Conveyance Duties (ACD), if the relevant thresholds are met for the latter. ACD for acquisitions comprises BSD of up to 6% and ABSD at a flat rate of 65%.
Whether property-related investment products are subject to stamp duty ultimately depends on how the specific product and transaction are structured. If an investor does not receive any beneficial interest or ownership of the underlying property, such as when the investment only entitles the investor to a part of the income generated by the property but not ownership of the property itself, then the investor will not be liable for stamp duty. Investors should consider both tax and non-tax consequences when making their investment decisions.
The Government will continue to monitor the property market closely and adjust our policies as necessary to promote a stable and sustainable property market.