Additional buyer stamp duty also known as ABSD. It was conceived with the intent to ensure residential prices remain attainable for most Singaporeans, discouraging property investors from driving prices up by owning multiple properties.
Unfortunately, the rigid implementation of the tax policy brings about collateral damages, penalising property owners with no intention to own a second property. You could have landed on this article because you and your spouse are facing the same predicament.
In this article, we will run through all the possible recourse for you to remit or refund any ABSD payable.
Difference between ABSD remission and ABSD refund
Setting the context, let’s establish the difference between ABSD remission and ABSD refunds.
- ABSD remission refers to instances whereby ABSD payment is waived, with no ABSD payable upfront.
- ABSD refund refers to instances whereby ABSD payment is to be made upfront and to be claimed back later
Situation in which ABSD is remiss – couples do not have to pay ABSD upfront
First off, let’s consider the ideal situations when there is no need to pay ABSD upfront
Purchasing an EC
There are situations when a married couple is looking to upgrade. They purchased a new private property, but have yet to sell their current property. Under such situations, they would have to first pay ABSD upon and claim for a refund after the sale of their current property.
Unique to the purchase of an executive condominium, this ABSD charge is not required. Couples simply need to fulfil the eligibility criteria to apply for an EC and dispose of the current property within 6 months from the date of issuance of the Temporary Occupation permit.
This privilege is also applicable to singles who are currently holding on to a property and makes an application for an EC under the joint singles scheme.
Side note this privilege is mainly applicable to couples currently holding on to a HDB flat and is looking to upgrade to an EC.
For couples currently holding on to a private property, this privilege will not be applicable to you. As one of the criteria for EC application is for you to dispose of any private property 30 months prior to application.
Upgrading from your current HDB flat to another HDB flat
The same ABSD remission described above is available to couples looking to upgrade to a bigger HDB flat or a new HDB in a better location. If you choose to purchase your new HDB before selling your current property, no ABSD is payable.
But aligning with HDB rule, you would still have to sell your existing flat within six months when you receive the keys to your new flat.
When a couple consisting of a Singapore Citizen and a non Singapore Citizen purchase their first property.
Typically when a property buyer is not a Singaporean citizen, they will be required to pay ABSD even if this is their first property purchased.
| Profile of Buyer | ABSD Rates on or after 27 Apr 2023 |
|---|---|
| SC buying first residential property | 0% |
| SPR buying first residential property | 5% |
| FR buying any residential property | 60% |
However, if the purchase was to be made together with a Singaporean citizen, as a married couple. The respective ABSD charges will qualify for a full remission, given the following conditions are met.
As a side note, for given that you are a household comprising of a Singapore citizen and foreigner spouse. Refer to our article on decoupling for foreigner in Singapore for insights on how you can decouple your first property to purchase a second property while minimising ABSD.
Conditions for remission of ABSD for couple consisting of Singaporean and Non Singaporean spouse
In the words of IRAS
- 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
Note, the couple must consist of at least one Singaporean citizen spouse. A couple consisting of a Singaporean PR and foreigner will not qualify for remission and will have to pay the higher applicable ABSD rate of 60% for their first property purchase.
| Nationality of couple | No of properties currently owned by each spouse | No of property owned after purchase | ABSD Payable for SC Spouse after 27 Apr 2023 | ABSD Payable for Non Citizen Spouse after 27 Apr 2023 | Full Remission (no ABSD payable upfront) |
|---|---|---|---|---|---|
| SC + SPR | 0 | 1 | 0% | 5% | Applicable when criteria is met with one spouse being a citizen |
| SC + Foreigner | 0 | 1 | 0% | 60% | Applicable when criteria is met with one spouse being a citizen |
| SPR + Foreigner | 0 | 1 | 5% | 60% | 60% – higher ABSD rate applicable |
Situation in which couples are required to pay ABSD upfront and claim for refund later
Now let’s consider the less ideal situations in which ABSD is to be paid first and claims have to be made for a refund later. Note, these are situations in which there is no intent to own 2 properties, couples are merely purchasing their new property first before selling their current property.
When couples purchase a resale private condo and have yet to sell their current property.
In the ideal sequence of events, when you and your spouse are looking to upgrade to a private condo. You would want to sell your existing property first before entering a contract to purchase a new property. In such a situation no ABSD will have to be paid.
On the other hand, if you found a new home that you and your spouse loved and would like to commit to a purchase first before selling your current home. You would have to foot the 20% ABSD bill upfront within 14 days of signing the sale and purchase document and make subsequent claims for a refund.
When couples purchase a new launch condo first, before selling their current property
For most married couples having their own place of dwelling remains a priority and when bunking in at parents’ place is not an option. Couples will face the predicament of having to hold on to their current property when purchasing a new launch condominium that will only be fully constructed in three to four years time.
Under such a situation, the married couple will have to pay ABSD upfront first and claim for a refund three to four years later. Within the following timeline, with the issuance of temporary occupancy permit for the new property and after they sell their existing property within 6 months from TOP.
Conditions for ABSD Refund
Having explored the situations in which ABSD is payable upfront and a claim for refund is to be made later. Let’s look into the details of the criterias and conditions required for making a claim.
Eligibility criteria
- The couple must consist of at least one Singaporean citizen spouse
- The current property must be sold within 6 months after the date of purchase or issuance of temporary occupation permit (TOP) or issuance of certificate of statutory completion (CSC), whichever is applicable
- The property must be purchased under both the names of couple only
Note
- ABSD refunds are only granted to couples consisting of at least one Singaporean citizen. Couples consisting of SPR and foreigner will not be eligible for claim
- Singles, parent and child, siblings making joint purchases, are not eligible for ABSD refunds. It is a privilege only granted for Singapore married couples, facilitating their need to upgrade their properties for their own stay purposes.
Additional condition for refund
At the date of purchase of the second residential property, the married couple must only be holding interest in one property.
- While making the purchase for the second property, it is permissible for a couple to own the current property under one name, with the other couple not owning any property.
- But a couple cannot be making a refund with each of them owning one property at the time of purchase, this applies to situation whereby couple each own one property under one name
To qualify for a refund, ABSD must has been paid upfront upon purchase of the second residential property
The first residential property (co-owned or separately owned) has to be sold within 6 months after the *date of purchase of the second residential property.
*Date of purchase refers to
- Date of acceptance of the option to purchase or
- Date of signing the sale and purchase agreement or
- Date of transfer when the first two document is not available or not applicable
If the 2nd property is a new launch and is uncompleted at the time of purchase. The first residential property has to be sold within 6 months after the issuance date of the Temporary Occupation Permit (TOP) or Certificate of Statutory Completion (CSC), whichever is earlier.
The married couple must remain married and there must be no change of ownership in the second property at the time of sale of the first property
The married couple must not purchase any additional residential property after the purchase of their 2nd residential property.
Lastly the application for refund of ABSD must be made within 6 months after the *sale of their first property
*Date of sale refer to
- Date of signing and accepting the option to purchase by the buyer or
- Date in which sale and purchase agreement is signed by the buyer
- Date of transfer when the first two document is not available or not applicable
| Nationality of couples | No of properties currently owned by each spouse | No of property owned after purchase | ABSD Payable upfront after 27 Apr 2023 | Refund of ABSD paid on second property |
|---|---|---|---|---|
| SC + SC | Co-owned 1 | 2 | 20% | Applicable when condition and criteria stated above is met |
| SC + SPR | Co-owned 1 | 2 | 30% | Applicable when condition and criteria stated above is met |
| SC + Foreigner | Co-owned 1 | 2 | 60% | Applicable when condition and criteria stated above is met |
How to apply for ABSD remission or refund
Your conveyancing law firm will assist with the remission or claiming of refund for ABSD. It will be helpful to notify the lawyer beforehand that ABSD refund or remission is required to ensure everything proceeds according to timeline.
How ABSD can be funded and how will refund be made
To fund ABSD upfront payment, married couples can choose to use a combination of cash and CPF. Upon a successful claim for refund, the CPF amount utilised will be refunded back into your OA account while the cash amount will be refunded via cheque.
Situation in which couples are not entitled to a refund
As we develop a clear understanding of what it takes to make a ABSD refund, it is equally important to consider situations that might jeopardise our claim.
Married couples who purchase the second residential property but fail to sell their current property within six months
There could be situations when the market condition is not conducive for the sale of the current property, but note that it is important to keep within the 6 months time frame to sell your property after the purchase of your second property.
IRAS have made it clear in their policy that the timeline cannot be compromised and no extension is allowed.
It will be important to work out your selling timeline properly to avoid a costly mistake
Married couples purchasing their third property, while selling their second property
Addressing the possible loop hole for couples looking to claim ABSD refund on the purchase of their 3rd property.
One of the qualifying conditions states that a couple must not be holding more than one property when the second property is purchased. This meant that the couple will not be eligible for a ABSD refund on their 3rd property purchase.
As a side note, if you are looking at purchasing a second property for investment, you may be interested to do some quick calculation on what is the additional buyer stamp duty that will be incurred. Head over to the 2nd property stamp duty calculator for some quick calculations.
Married couples who is purchasing the second property with only one name
This is particularly applicable to couples who have decoupled their names from the current property or are looking to sell the current property to purchase two properties.
One of the criteria for refund states that the property needs to be purchased with both married couples’ names. A refund will not be permitted when either one of the spouses tries to purchase a second property first while holding on to the current property.
Final words
From a perspective of a homeowner with no intent on owning a second property, it would be most ideal to first sell your current property before purchasing the second property.
This will not only save you from the hassle of claiming for a refund. But most importantly it helps you avoid the need to fork out a hefty amount of cash or cpf for paying ABSD, on top of the usual buyer stamp duties and cash deposit.
If it is inevitable that a purchase needs to be made first, then at least you got a good grasp of the condition required for you to make a claim for refund
For apsiring property investors looking to figure out how to avoid paying ABSD while owning your second property check out the following article.
Frequently asked questions regarding ABSD remission and refund
Both me and my husband are Singapore citizens, we are currently living in a private condo and are looking to purchase a HDB flat while still holding on to our current property. Do we have to pay ABSD ?
ABSD remission will be given to HDB flat purchasers. As long as the current private property is disposed of within 6 months from the completion date of HDB flat, there will be no ABSD payable.
My wife is a foreigner and I am a Singapore Citizen. We are looking to purchase our first private condo, jointly under both our names. Do we have to pay ABSD ?
No, is this case when a couple consists of at least one Singaporean Citizen and given that both couples currently do not own any property. ABSD will be remitted, no ABSD will be payable.
My fiance inherited a private condo from her parents, and we are looking to get married and purchase a new launch condo for our matrimonial home. Are we eligible for an ABSD refund ?
Yes, you will be eligible for a refund, as long as your finance sells the inherited property within 6 months of the issuance of TOP or CSC for the new condo. In addition to that the new launch condo will have to be purchased under both your names.
