How to avoid ABSD in Singapore ? – 11 Ways

9 Ways To Avoid ABSD Legally In Singapore

Table of Contents


Additional buyer stamp duty also known as ABSD is a common hurdle faced by property buyers from all walks of life. It was introduced by the Singapore government in Dec 2011 with the main intention of curbing property speculation in Singapore.

Till date, it has gone through 13 rounds of revision and the latest round of revision in April 2023 took ABSD to a new high.

To put things in perspective, if you are a Singapore citizen looking to purchase a $1.4 million private condo as a second property. You will be looking at a 20% ABSD, amounting to $280,000, and this excludes a buyer stamp duty of $40,600, which totals to a hefty $320,600.

Focus of this article – how to avoid ABSD

In this article, we will seek to cover all the available methods to avoid ABSD. For each of these methods, we will highlight its specific advantages, disadvantages and who it is most suited for.

A little bit about ourselves

Before we proceed further, we thought it would be helpful to first qualify ourselves. This will help assure you that you are not reading a bunch of generic information plugged from the internet.

At Stayvesting, we are a team of real estate investors that decided to become full time realtors. We started off as corporate workers working the 9-5 grind and experienced first hand the benefits of making wise choices when it comes to real estate investing.

Our mission is to help more people get out of the 9-5 grind by leveraging on making smart choices in real estate.

Till date, we have helped over 107 property owners acquire their second property without ABSD.

ABSD challenges faced by different profile of property buyers

Even though the main intent of ABSD is to curb property speculation specifically targeting property buyers that are looking to acquire their second property. Due to its rigid implementation its impact extends beyond targeting property investors, into different segments of buyers with no intention on owning multiple properties.

Let’s first establish the different profile of buyers facing the challenges with ABSD and organise our solution in accordance to the different buyer profiles.

Property Investors looking to purchase their second property

This would be the main segment that ABSD seeks to target.

For property investors looking to purchase their second property as an investment, ABSD presents itself as a transactional cost that eats into your potential returns.

As a side note, for property investors looking to calculate the additional buyer stamp duty to be incurred when purchasing your second property, head over to the 2nd property buyer stamp duty calculator.

Property upgraders purchasing their property before selling their current property

If you fall within this segment of customers, you have no intention of owning multiple properties, you are simply looking to upgrade from your current property to a better one.

Unfortunately, if you have not sold your existing property but went on to purchase your new property. You will have to pay ABSD upfront and can only claim for a refund if you dispose of your existing property within 6 months of your new purchase.

In this case, ABSD poses more as a cashflow challenge, as you would have to pay for it upfront in cash of CPF first, then claim for a refund later.

In later sections, we will discuss methods you can take to avoid ABSD specifically for this segment of buyers.

Foreigner and PR looking to purchase property in Singapore

For our final segment of buyers we will be looking at Foreigners and PR looking to purchase property in Singapore. We will discuss methods and situations in which ABSD can be avoided specifically for non Singapore citizens.

Methods to avoid ABSD – Property Investors looking to purchase their second property

Method #1 – Decoupling

Decoupling is a method that is commonly used by property owners to avoid ABSD when purchasing their second property.

When you and your spouse purchase your current property, you most probably adopted a 50-50 joint ownership structure. Decoupling works by initiating an internal transfer of share of ownership from one spouse to the other via a formal buy and sell process, executed with the help of a conveyancing lawyer.

The goal of decoupling is to free up one owner’s name from the current property. In the event this happens, the owner is deemed not to have any property under his ownership and is able to purchase the second property without ABSD.

Benefits of decoupling

Aside from avoiding ABSD, decoupling can help improve financing circumstances for the second property. Under MAS loan to valuation limit, one can only loan up to 45% for his second property and there is a mandatory cash requirement of 25%.

As part of the decoupling process, the existing property mortgage will be restructured to be held solely under one spouse’s name. This frees the other spouse from the existing loan obligation and allows the other spouse to be eligible for the full 75% loan with a smaller cash requirement of only 5% on the second property.

Cost of decoupling

There are costs involved with decoupling property in Singapore, you should always weigh it against the cost of ABSD to make sure it is more worthwhile to decouple than to pay ABSD.

The cost of decoupling includes the following

  • Buyer stamp duty – levied on the ownership share that is being transferred
  • Seller stamp duty – if decoupling is executed within 3 years of property ownership
  • Legal fee – $3500 to $6000
  • Early loan redemption penalty

For a more in depth discussion on decoupling refer to the article link inline.

Challenges and risk associated with decoupling

Ability to support two mortgage

One of the key risks with decoupling is the financial obligation that comes with supporting two mortgages. Previously, both you and your spouse are jointly supporting the mortgage of one property, this provides some breathing room for any unforeseen loss income or financial challenges.

With two mortgages and a higher monthly loan obligation, there is less room for error.

Legal ownership

After decoupling, the marital property is to be held solely under the legal ownership of one spouse. This may bring about some concern in the event of an unfortunate divorce, especially if the spouse has made significant financial contributions to the property.

Who is this method suitable for

This method is suitable for dual income couples that are looking to purchase a second property, while retaining their current one.

However, HDB decoupling is not permitted for HDB flat owners due to a tightening of homeownership share transfer policy in 2016.

Method #2 – Sell one buy two

The sell one buy two approach would require you to sell off your current property and redeploy the proceeds from sale into two private condominiums, each purchased under the sole ownership of you and your spouse.

Example of how Sell One Buy Two works

Assuming John and Sally first purchased a 4 bedroom BTO flat in Punggol for $300,000. After fulfilling its 5 year minimum occupation period, the property has since appreciated to $650,000.

Adopting the sell one buy two approach, John and Sally would sell off their current property at $650,000, realising the $350,000 profit.

Together, with the initial cash and cpf outlay, they would then redeploy this enlarged pool of capital into 2 private properties. A 3 bedroom private condo valued at $1.4 million for their own stay and a smaller 2 bedroom condo valued at $1.1 million as their second investment property.

Benefits of Sell One Buy Two

Ability to unlock profit from current property

One key benefit of the sell one buy two approach is that it allows you to unlock the paper capital gain that you are sitting on for your current property.

Assuming you put in the due diligence in your property selection, you would be able to deploy your capital into another two properties that can have higher capital appreciation potential.

Avoid ABSD

As you are purchasing each property under one name, you would not be required to pay any ABSD in the process.

Enhanced financing

Similar to decoupling, the sell one buy two approach allows you to take the full 75% bank loan for each property.

Challenges and risk associated with Sell one buy two

Greater use of leverage

One of the key risks associated with sell one buy two is the greater use of leverage. As you are purchasing two higher value private condominiums, using two larger quantum mortgages. You and your spouse will be subjected to a heavier burden of maintaining these two loans.

Fluctuating interest rates

Inline with the discussion above, greater use of leverage will expose both of you and your spouse to interest rate fluctuation. A small hike in interest could see your monthly debt servicing obligation go up significantly.

Who is this method suitable for

This approach is suitable for property owners that current property has appreciated significantly and is sitting on significant capital gain.

As added criteria, the couple has to have a strong and stable dual income to be eligible for mortgage and to ensure the ability to service the monthly mortgage for each property.

Method #3 – Investing in commercial / Industrial property

If you are willing to venture outside the comfort zone of residential property, commercial real estate is a category of real estate that is not subjected to ABSD.

This meant that you can assemble a portfolio with multiple commercial real estate, alongside your current residential property without incurring any ABSD.

But note that, it is a whole different ball game altogether. Hence it is important to get yourselves accustomed to it before purchasing one.

Different types of commercial real estate

Commercial real estate includes different sub category of properties that serves different commercial purposes

Types of commercial real estate

  • Retail property
  • Office
  • Shophouse
  • B1 – Light Industrial
  • B2 – Heavy Industrial

To make a wise investment in commercial real estate you will need to develop an in-depth understanding of the tenant’s business and industry, for the subcategory that you are interested in. The growth of your tenant’s business and industry would mean greater rental demand for your property and a healthier capital appreciation.

Key difference between commercial property and residential property

Shorter lease life

Residential property comes with at least 99 years of lease life. But commercial real estate’s lease life tends to be shorter, with the majority of leases falling within 30 or 60 years. There are some commercial real estate with freehold leases, but they are often located in less ideal locations.

In fact the government have formalised plan to only permit Industrial development of not more than 30 years of lease

More volatile pricing

The price of commercial property tends to be more volatile in comparison to residential property. Its prices fluctuate with the health of the economy and outlook of the tenant’s industry.

As compared to residential property, most owners and buyers purchase the property for their own stay purposes. Owners tend to hold on to their property during economic downturn and buyers continue buying for their own stay purpose, resulting in a more stable price trend.

Different financing terms

For commercial properties, you will be looking at a lower loan to value ratio, banks will only be willing to loan within the range of 60% – 70%. As compared to residential property, you will be able to fund the purchase with up to 75% bank loan.

Interest rate also tends to be higher by 1-2% for commercial property loans

Key benefits of commercial property

Lower price per square feet

Due to the shorter lease life of commercial property, the price per square feet tends to be lower than that of residential property. As a result, the overall quantum of purchase tends to be lower as well.

Using Midview city, a 60 year leasehold industrial property as an example. You will be able to purchase a 1400 sqft unit at below $900,000.

Higher rental yield

Commercial properties have an average rental yield of 5%, while residential properties rental yield ranges between 2% to 3%.

For a comprehensive write up on commercial real estate, refer to the article in line

Who is this method suitable for

This method tends to be more suited for investors with the following attributes

  • Have already utilise both you and your spouse name to purchase two residential property
  • Have in-depth industry knowledge for tenants / user of a particular sub category of industrial property
  • Investors that are keen on building a source of passive rental income

Method #4 – HDB Essential Occupier Scheme

This method can only be effected when you first purchase your HDB flat. Hence, it is suitable for you if you are planning for the purchase of your next HDB flat and would like to make advance preparations for owning another private property alongside your HDB flat at the same time.

When purchasing your HDB flat you will be given the option to select your manner of holding. Manner of holding refers to the structure of your property ownership, you will be given three options, joint tenancy, tenancy in common and lastly the often overlooked owner and essential occupier option.

By selecting the owner occupier option, you will be listing either you or your spouse as the legal owner of the property, while the other half will be listed as an occupier.

The crux to this is that, after fulfilling a 5 year MOP period, the essential HDB occupier is able to purchase another private property without ABSD, as he or she is not deemed the legal owner of the HDB flat.

Key challenges to be noted for this method

Financing the HDB flat

You will not be able to use the essential occupier’s CPF to fund both the downpayment and monthly mortgage of the HDB flat.

And the essential occupier’s income will not be considered for the assessment of loan eligibility, the bank or HDB will only be assessing the main occupier’s income to determine maximum eligible loan quantum.

This meant that either you or your that is listed as the main owner must have the financing capability to be eligible for the mortgage and support the monthly recurring mortgage payment.

Ownership concerns

Assuming both you and your spouse have contributed financially to the property, only one party’s name will be listed as the legal owner of the property. There may be concern raised by the party listed as the essential occupier, in the event of divorce or similar relationship conflict takes place.

Loss of housing grant

By using this method, you would not be able to claim the full housing that a couple will be eligible to. The amount of housing grant you can take will only be subjected to the eligibility of the main owner.

Subjected to HDB policy change

It is important to note that this method is subject to HDB policy change. Given that HDB decides to tighten its policy, this method may no longer be feasible.

Who is this method suitable for

This method is ideal for those of you that are planning ahead, with a goal to own both a HDB and a private property in the future.

Method #5 – Purchasing property by creating a trust

If you have a child that is under 21 years of age, you can consider purchasing a property using a trust to avoid ABSD. Technically, you will be required to pay ABSD upfront, but with a trust you will be able to file a claim for ABSD refund.

A trust is a legal arrangement that allows you to purchase a property on behalf of your child, but manage it as a trustee while he is still not of legal age to formally own the property.

Under this arrangement, you will need to first pay a 65% ABSD upfront and claim for a refund later by satisfying the following conditions.

  • The residential property is held on trust for identifiable individual beneficiaries only
  • ABSD (Trust) of 65% has been paid
  • The application is made within 6 months after the date of execution of the instrument

Key Advantages of purchasing a property under a trust includes the following

  • Asset protection – creditors will not be able to access the property held under trust in the event of bankruptcy
  • Succession planning
  • Tax efficiency – the rental income generated by the property held under trust will be assessed based on your child’s income bracket, reducing your overall taxable income.

Key Challenges of purchasing a property under a trust includes the following

65% ABSD to be paid upfront

There are two big hurdles when it comes to purchasing a property under a trust. The first being the requirement to pay 65% ABSD upfront first, this hefty cash flow requirement renders this option out of reach for most average earning Singaporeans.

To put things into perspective, a 65% ABSD on a property valued at $1.0 million would amount to $650k. You would have to first fork out $650k in ABSD first before claiming for a refund within 6 months after purchase.

No bank loan eligible

The next big hurdle would be the fact that the entire property purchase has to be fully funded in cash. Banks will not be willing to offer financing for property that are held under trust.

Potential for ABSD clawback

It is also important to note that, there is a potential for IRAS to claw back the 65% ABSD retrospectively. Under section 33A of the stamp duty act, IRAS reserves the right to claw back any ABSD. If there is any suspect of foul play whereby the trust was created solely with the intent of avoiding ABSD.

Who is this method suitable for

This method is suitable for high net worth individuals with succession planning as the main intent. We do not recommend using this method solely as a means of avoiding ABSD.

Method #6 – Purchasing property using your child name

Assuming both you and your spouse names are all “fully utilised” and are tagged to the ownership of a property. One way to go about owning another property without ABSD is to utilise the name of your child.

For this to work, your child has to be above 21 years of age and is of a legal age to enter a contract for property ownership.

Challenges faced when purchasing a property using your child’s name

While the method may seem straightforward, it is important to note the challenges that come with it.

The property is not legally under your control

Given that your child is the legal owner of the property, he will have the final say on what to do with the property. This may not be of immediate concern, but assuming conflict or misalignment in interest arises down the road. You may not have the final say on what to do with the property.

Your child will get to decide when to sell the property or who to rent it out to and even pledge the property to take a loan.

Your child will become a private property owner

When you purchase a private property under your child name, he or she will be deemed as a private property owner. In the event your child plans to get married and purchase his own marital property, he will not be able to purchase a HDB flat, BTO or EC.

He will have to dispose of the private property and fulfil a wait out period of 15 months to be eligible for a resale HDB purchase and fulfil a wait out period of 30 months to be eligible for EC and BTO purchase.

Loan will be assess base on your child’s income

The amount of loan you can take to fund the property could be limited if your child’s income is not significant.

Who is this method suitable for

This method would be suited for property owners with children above 21 years of age, but it would be important to plan ahead on when to sell the property such that your child’s plan of purchasing his own property would not be jeopardised.

Method #7 – Purchasing a dual key condo

Technically, this method does not facilitate you in purchasing your second property, but it does help you create an additional stream of rental income.

A dual key condominium is a unit developed with two segregated self contained living spaces. It normally comes with a main unit that is larger in size and a smaller studio apartment as a sub unit.

Advantages of purchasing a dual key condo

  • No ABSD involved in purchasing a dual key condo
  • Opportunity to create secondary stream of passive income by renting out the sub unit
  • Less financial burden as compared to owning two properties
  • Tax savings as compared to having a second property, as you would be paying owner occupied property tax as compared non owner occupied property tax

Disadvantage of purchasing a dual key condo

  • Higher entry price – dual key units comes with a 3% to 12% premium
  • Harder to exit – dual key has a smaller buying audience and will not be as liquid as normal unit
  • Suboptimal profitability of dual key unit – not all dual key units have performed well it is important to ensure a good layout and entry price when purchasing dual key units

Who is this method suitable for

This method is suitable for you if you are not ready to purchase two properties, but yet want to create a secondary source of rental income.

It is also suitable for you if you have plans for multi generational living in the future.

Methods to avoid ABSD – Property upgraders purchasing their property before selling their current property

Methods #8 – Sell existing property first before buying next

This is a commonly applied method when it comes to avoiding ABSD, for homeowners looking to upgrade from one property to another.

It hinges on effective timeline management between selling your current property and purchasing your next property. The rule of thumb is to ensure that you enter a contractual agreement to sell or dispose of your current property first, before entering another agreement to purchase your next property.

As an example, John and Sally are looking to upgrade from their current BTO flat to a private condo. They should first issue an option to purchase to their buyer and have their buyer exercise the option to purchase first, before exercising the option to purchase for their new private condo.

Challenge with realising best selling or buying price

From our experience, time constraint is the key challenge that comes with this method. You would be looking to simultaneously market your current property for sale, while looking for the right property to upgrade into.

In the event that you spotted something that you fancy at an attractive entry price, you would not have time to wait for the best selling price for your current property.

Vice versa, if you found a buyer offering to purchase your current property at an attractive price, you would have to speed up your property purchase process to ensure that you have got a place to live in after you sell your current property.

Tactics to mitigate challenges

Setting realistic selling price and marketing your property in advance

One way to mitigate the challenges above is to establish a realistic benchmark selling price for your property by reviewing past transaction prices for similar properties and engaging a competent realtor to market your property in advance.

With offers coming in from prospective buyers, you will get a good sense of the optimal selling price for your property, which will allow you to execute the sale of your property with confidence when you spot something you like for your next property.

Finding a temporary place of residence

If you are intent on finding a steal for your next property, then you could prolong the duration for your search by first selling your current property and making arrangements for temporary residences for you and your family, while you search for your next property.

Temporary residence could include the following

  • Parent’s or parent in law’s home
  • Short term rental with coliving spaces
  • ervice residences

The downside to this method is that you will be incurring some additional cost in rental, temporary storage for your furniture and logistical cost of moving furniture from place to place.

Methods #9 – Upgrade to an EC

EC is a category of property that comes with special privileges. When you upgrade from your current property to an executive condo, you do not need to pay an ABSD upfront.

ABSD remission for EC purchase

You will be able to first secure your EC and continue living in your current property for the next 3 years, while your EC is being constructed.

Unlike private properties, there will be no requirement to pay ABSD upfront. You will only be required to sell your existing property within 6 months after your EC achieves its TOP status.

Other benefits of an EC

ECs are sold at a subsidised price

Similar to BTOs, EC is a form of subsidised housing offered by HDB. It comes with all the features of a private condo, but is sold at a subsidised price.

The land in which a EC is built on is sold by the government at a discounted price to the EC developer. In return, the selling price of an EC is priced lower than that of a comparable private condo in the same area.

ECs offers opportunity for capital gain upon MOP

EC owners are allowed to resell their EC to Singapore citizens and PRs after a 5 year minimum occupation period and will be able resell it to an even broader buying audience to include foreigners after the 10 year occupation period.

Given that ECs are purchased at a subsidised price, but marketed at similar selling price as comparable private condo in the area. This presents an opportunity for EC owners to make significant capital gain.

Housing grants for ECs

When purchasing an EC, owners can further tap on HDB housing grants to fund the EC purchase. The grants available are HDB family grant and half housing grant.

Family grants are applicable for first time EC applicants, and the amount of grants eligible correlates with the family combined income. The highest grant amount of $30,000 is applicable for a family with combined income of $10,000 or less.

Half housing grants as the name suggests, caters to applicants that comprise both first time applicants and second time applicants. The grant is half that of the family grant and similarly, grant amount is related to the combined income of the family.

Challenges with purchasing an EC

Meeting EC eligibility criteria

The first challenge that owners interested in purchasing an EC has to overcome is to fulfil the eligibility criteria of an EC.

At a high level, the key criterias to fulfil are as follow

  • Combine household income not exceeding $16,000
  • Formation of a family nucleus, applying as fiancee/fiance, family or joint singles
  • You have not bought more than one subsidised flat from HDB or receive more than one HDB grant for flat purchase thus far.
  • Property ownership, you do not currently own a private property and have not disposed of a private property within 30 months.

Funding an EC purchase

Given that you have yet to sell your existing property when purchasing your EC, you will not be able to use the proceeds from sale to fund your downpayment for your EC.

You will have to fund the 25% down payment with the cash and CPF you have on hand. Assuming a purchase price of $1.3 mil EC purchasing, you will be looking at forking out a $325,000 worth of cash and CPF upfront.

EC deferred payment scheme is a potential solution to elevate this challenge, we will explore this as a separate topic on its own.

Similar to purchasing an EC, ABSD is not levied when you upgrade from one HDB flat to another HDB flat. The only requirement will be for you to sell or dispose of your current HDB flat within 6 months from the key collection for your new flat.

Challenge with financing a new HDB purchase without selling current HDB

Similar financing challenges arise when you purchase another HDB before selling your current. As you have not sold your existing HDB flat, you would have to fund the new flat purchase with cash and CPF you have on hand first.

Methods to avoid ABSD – Foreigner and PR looking to purchase property in Singapore

Methods #10 – If you are a citizen of a country with Free Trade Agreement with Singapore

If you are foreigner and have got citizenship status in the following countries

  • Iceland
  • Liechtenstein
  • Norway
  • Switzerland
  • United States of America

Then you will enjoy the same tax treatment similar to that of a Singapore citizen, and will be exempted from paying ABSD on your first property.

Methods #11 – Marry a Singaporean

If you are a foreigner or PR that marries a Singapore citizen, you will be eligible for ABSD remission when both of you purchase a property together.

Note condition for ABSD remission comprising of Singaporean and Non Singaporean Spouse is as follow

  • The couple must include a Singaporean Citizen (SC) spouse
  • The property must be purchased under both names of the couple
  • And both spouse must not own any residential property

ABSD remission is the first step you can take to minimise ABSD for a household comprising of a Singapore citizen and a foreigner spouse. We have gone the extra mile to written a seperate article on how you can take the next step to decouple your first property and purchase a second property with minimal ABSD.

Refer to our article on decoupling property for foreigner in Singapore for more insights.

Final Words

In the spirit of all click baity titles here’s a wrap to 11 methods of avoiding ABSD in Singapore.

If you like to find which is the best method you should adopt to avoid ABSD on your second property purchase feel free to contact by clicking on the link below.

Singaporean citizens and citizens or PR from Iceland, Liechtenstein, Norway, Switzerland and the United States of America are exempted from ABSD for their first property purchase. And if you are a foreigner or PR that is married to a Singaporean citizen, you can apply for a ABSD refund.

No you do not have to pay ABSD when you own a HDB. If you are planning to purchase a private condo, you simply have to dispose of your HDB within 6 months of key collection for your private condo.

Yes you can use CPF to pay for all stamp duties including ABSD. But note, if you are purchasing a HDB or a completed private property, due to completion timeline constraints you would have to pay for your stamp duties in cash first and the cash amount will be reimbursed to you later upon legal completion.

No, all residential properties located outside Singapore are excluded from your ABSD count.

More reads, more gains ?

Kudos on making it this far. The fact that you have invested the last 5 mins reading this article. We believe you are a like minded real estate investor looking to beat the rat race by getting more out of your real estate investment.

If so, do check out the following articles.


  • Jue Wen

    Jue Wen is the content marketing lead. This means he spend his waking hours researching and writing all things real estate. He believes life is a hustle and there is no joy in grinding away daily in our little rat races. He believes making wise moves in real estate investment can be a game changer. Aside from writing all things real estate, you can find him in your nearest bouldering gym.

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Jue Wen


Jue Wen is the property analyst and content marketing lead at decoupling expertise.
He specialises in helping clients overcome the complexities involved in owning their second private property in Singapore.
He had over 10 years of experience in real estate investing and have written over 40 detail guides on decoupling and minimising ABSD. He is a licensed real estate consultant and holds a Bachelor degree in Business Management from the Nanyang Technological University.



Kenji is the Group Division Director of ERA Realty Network.
He have got over 20 years of experience in real estate and have successfully helped over 50 couples purchased their second property. He specialises in helping client achieve the best approach towards acquiring their ideal investment properties while minimising ABSD.