Welcome to the case study content series.
Real estate ownership and investing is a rewarding adventure, filled with unique learnings, pitfalls and breakthroughs. Yet, every year a new horde of Singaporean homeowners embark on this journey to navigate their way to the end goal of owning multiple properties with hope of freeing themselves from the mindless rat race.
The goal of this article seeks to highlight the real challenges, pitfalls and solutions that an actual Singaporean homeowner like yourself have experienced in the course of decoupling their property, to own their 2nd property. We hope this can serve as a useful recipe of success and inspire you to take the first step in your own journey.
Context
First off let’s introduce the home owners.
Note, the real names of homeowners have been replaced with fictitious names to protect their identity.
Today’s case study features a forward looking young couple who have achieved early success in their careers.
Introducing.
Alex, a quick thinking equity analyst in an investment bank.
Age – 35.
Income – $20,000 SGD per month.
Lindy, a detail oriented and methodical compliance manager in a bank.
Age – 35.
Income – $15,000 SGD per month.
Both of them currently own a 700 sq ft, 2 bedder private condominium in the Novena area.
It was purchased in 2015 at $1.3 million. The property was valued at $1.5 million at the point of decoupling in 2018.
The Aspiration
While both had successful careers, their jobs were also stressful and demanding. They were quick to realise that at some point they would like to have the option of getting out of this daily grind and focus more time on pursuing their other passions in life.
That quickly became a pet project that the couple worked on. The plan was to set aside a warchest to invest in a 2nd property, creating a secondary stream of rental income while enjoying capital appreciation.
Financial gains aside. Lindy has always wanted a bigger home, located nearer to her parents place in Bukit Timah area.
The Challenges
After doing some research, the couple quickly met their first roadblock. ABSD.
They realise that being co-owners of their current home, they would be taxed a hefty 17% (2018 rates, ABSD has been revised upwards to 20% in 2023) on their next property purchase. They estimated the price of their Bukit Timah dream property to be around $2.8 mil and a 17% ABSD on that would come up to $47,600.
This was the time when Alex realised they needed the advice of someone who has owned multiple properties themselves and has experience in the real estate scene. As an analyst himself, he is mindful to work with someone that is number oriented and can help him run the necessary calculations.
Alex was introduced to Kenji, a real estate consultant through a mutual friend.
Decoupling was proposed as the prime solution to the ABSD issue over other methods. As the current novena property has great rental demand and given its tenure, it still has room for capital appreciation. Hence retaining the current property and using decoupling to “free up” Alex’s name seems to be the best option.
What happens if the cost of decoupling is greater than the savings from ABSD ?
At this point, Lindy brought up a good question. Having been aware that there are cost involved in decoupling and a buyer stamp duty would be incurred as well, she was concerned if it even makes sense to decouple or would it be more straightforward to simply pay ABSD and purchase the 2nd property.
The Solution
Addressing both Alex and Lindy’s concerns the following calculations was ran
First port of call to find out if the savings from ABSD is greater than the cost of decoupling.
Potential cost saving from ABSD = 17% x $2.8mil = $47,600
ABSD rate of 17% is based on 2018 rate, year in which case study took place
Cost of decoupling.
- Legal fee – $5000
- Early loan redemption penalty – null, loan has passed its lock in period
- Buyer Stamp Duty – $17,100
- Seller Stamp Duty – null, as novena property has been held for more than 4 years
- Valuation Fee – $1000
The total cost of decoupling came up to $23,100.
Comparing this against the cost savings from avoiding ABSD, the couple will be better off by $24,500 if they have decoupled and not pay ABSD.
Consultant Notes
A note from our consultant. It does not always make financial sense to decouple, in Alex and Lindy’s case, the odds were tilted in their favour because of several reasons.
First, the purchase price of their 2nd property is high, hence resulting in greater cost savings from ABSD. If they were to purchase a much smaller $1.0 million property, the cost savings from ABSD would shrink to $17,000, which is lesser than the cost of decoupling at $23,100.
Next, the cost of decoupling remained manageable because they were not required to pay seller stamp duty. Had they decoupled earlier, seller stamp duty would have been incurred, bumping up the cost of decoupling.
*Article has been updated with the latest Seller Stamp Duty Rates as of 4 July 2025
Revised Seller’s Stamp Duty (SSD) rates effective from 4 July 2025:
- Sold within 1 year: 16%
- Sold within 2 years: 12%
- Sold within 3 years: 8%
- Sold within 4 years: 4%
- Sold after 4 years: No SSD payable
The pitfall to avoid
Throughout this process, both Alex and Lindy were so focused on how to avoid ABSD. They were unaware of a blind spot that they had overlooked.
Alex has not considered whether he had enough cash/cpf to purchase the 2nd property in Bukit Timah and whether he is eligible to take a bigger loan to finance the 2nd property himself.
Once again numbers were ran.
To finance a $2.8 million dollar property.
Alex would need the following.
- 5% cash deposit (mandatory) – $140,000
- 20% cash / CPF – $560,000
- 75% mortgage – $2.1 million
A sign of relief came, when Kenji worked through the numbers with Alex. Incorporating the CPF refunds from the proceeds that Alex received from Lindy via the decoupling process and taking the cash reserves that the couple had set aside into consideration, they were able to address the down payment requirements.
A mortgage consultant from OCBC was brought into the picture, assessing Alex income against the new monthly loan obligation (TDSR) and eventually granting a in-principal loan approval to Alex.
The Outcome
The couple eventually decoupled their Novena property, with Lindy becoming the sole owner.
And Alex eventually purchased a larger 3 bedroom private condo in Bukit Timah.
The 2 Bedroom Novena property was rented at $5,700 per month.
The couple now live in their new 3 bedroom condominium in Bukit Timah.
Credits
The law firm Wee Swee Teow LLP executed the decoupling procedure
Expert Contributor
Kenji
Kenji specialises in helping customers minimise ABSD when acquiring their 2nd investment property. Over 15 years of his career as a realtor, he has developed a specialised knowledge in property decoupling helping over 86 clients successful purchase their 2nd property via decoupling.
More Reads Regarding Legality of Decoupling Property in Singapore
- Decoupling Property FAQ Session – Circular Law
- Decoupling Private Condo Case Study (50–50 Joint Tenancy): How a Dual‑Income Couple Decoupled an Ageing $1.3M Unit to Buy a 4‑Bedroom New Launch Condo at Springleaf Residences as Their Second Property in Singapore
- Decoupling Case Study – How a couple cautiously upgraded from a humble HDB into 2 private condo in less than 5 years, via decoupling 99-1
- How Singapore citizen and PR couple minimise ABSD when purchasing 2nd property
- Can I secure a new launch condo first before decoupling my current property ?
- Understated financial advantages of a second investment property
