Proposal for Flexibility on Additional Buyer's Stamp Duty for Divorcees Buying Another Property before Final Court Ruling
Ministry of FinanceSpeakers
Summary
This question concerns a proposal by Mr Kwek Hian Chuan Henry for IRAS to allow divorcees to buy property without Additional Buyer’s Stamp Duty (ABSD) before a final court ruling, contingent on subsequent property disposal. Deputy Prime Minister and Minister Heng Swee Keat stated that ABSD moderates demand to ensure market stability and applies to all second and subsequent property purchases by Singaporeans. He noted that an ABSD refund concession is currently restricted to Singaporean married couples who sell their first home within six months of buying another to meet family needs. This flexibility is not extended to other groups because purchasing a second property increases residential demand at the time of purchase, regardless of whether a prior property is eventually sold. The Minister advised that buyers wishing to avoid higher ABSD rates should consider selling their first property before purchasing a second residential property.
Transcript
38 Mr Kwek Hian Chuan Henry asked the Deputy Prime Minister and Minister for Finance whether IRAS can consider allowing more flexibility for a divorcee to purchase a property without the Additional Buyer’s Stamp Duty before the final Court ruling on the divorce with a condition that the existing property needs to be disposed of within the timeframe according to the Court ruling.
Mr Heng Swee Keat: The policy intent of the Additional Buyer’s Stamp Duty (ABSD) is to moderate demand and to ensure a stable and sustainable residential property market.
For Singaporeans, ABSD is applicable on the purchase of a second and subsequent residential property. This applies regardless of whether they dispose of their first property subsequently. This is because even if the first property is eventually disposed of, the purchase of the second property adds to the demand for residential properties at the time of purchase.
Only one exception is made, namely for Singaporean married couples. A Singaporean married couple may need to change home due to changing family needs, such as when they have more children or when their children are growing up, or when the couple needs to right-size in their senior years. It is in this context that we have an ABSD concession for Singaporean married couples buying a second property. Under this concession, a Singaporean married couple is required to pay ABSD upon buying their second property, then claim a refund of the ABSD paid on their second property, provided that they sell their first property within six months1 after the purchase of a completed property or the Temporary Occupation Permit date of an uncomplete property.
This ABSD concession is not available to other groups of property buyers, as our overall key objective remains to moderate the demand for residential properties, including that for second residential property of Singaporeans.
Buyers who do not wish to incur the higher ABSD on second residential properties may wish to consider selling their first property before purchasing their second property.