Is it worth paying ABSD for your second property ?

Is it worth paying ABSD for your second property ?

Table of Contents


Singapore is a country with one of the highest property ownership. It is a common affair for every Singaporean to own a property for our own stay purposes. But for some of us, it is our aspiration to go beyond that and own our second and third property.

If you fall into the latter category, you would be faced with the question of whether it is worthwhile paying ABSD on your second property or should you put in effort to make alternative plans to avoid ABSD legally.

Should one simply pay ABSD ?

To be fair there is no perfect answer to this question, the answer will defer according to who is asking the question.

A cash strapped aspiring property investor looking to make budget to purchase his second property, should definitely not pay ABSD. Where else, the consideration would be very different for a seasoned investor who has already maxed out both his and his spouse name, owning two properties and is looking to purchase their third property.

Free consultation on purchasing 2nd property without ABSD ?

Exploring the purchase of a 2nd property ?

We specialise in helping Singaporean property owners find the best way to purchase their second property without ABSD.

Drop us a text, share with us your unique circumstances and we will try to help you figure the best strategy to purchase your 2nd property.

Quantifying the cost of ABSD

Before we begin, let’s set the context by quantifying the cost of ABSD. Based the revised ABSD 2023 rates below, a Singaporean citizen will be looking at 20 percent ABSD on the purchase price of their second property

Assuming you were to purchase a 1.5mil property you would be looking at a ABSD of $300,000, adding on a buyer stamp duty (BSD) of $44,600. You would be looking at a total transaction cost of $344,600, excluding any interest expense.

As a side note, if you are looking to do some quick calculation for the additional stamp duties that you will need to pay for your second property purchase, head over to the 2nd property stamp duty calculator.

This would be the hurdle for your investment property to cross in order to breakeven.

While $344,600 seems like a significant cost hurdle, it is not impossible for a property to provide a capital appreciation of above $500,000. One would have to select a property with very strong fundamentals and apply a longer than usual holding period of 8 to 10 years.

Profile of BuyerABSD Rates on or after 27 Apr 2023
Singapore Citizen (SC) 
SC buying first residential property0%
SC buying second residential property20%
SC buying third and subsequent residential property30%
Singapore Permanent Residents (SPR) 
SPR buying first residential property5%
SPR buying second residential property30%
SPR buying third and subsequent residential property35%
Foreigner (FR) 
FR buying any residential property60%
Entities buying any residential property65%
Housing Developers buying any residential property35%
Trustee buying any residential property65%

Edit Table

Here are some development with sizable return after 8 to 10 years

Example – Amaranda Gardens

Amaranda Gardens is a freehold development located in the Lorong Chuan area, it attain its TOP status in 2004.

Buyers of Amaranda Gardens, purchasing a 990 sqft, 2 bedroom unit in 2017 would have enjoyed at 49% price appreciation.

Purchasing the property at $1,318 psf in 2017 and exiting the property at a sale price of $1,970 in 2023, making an average profit of $645,480.

Example – Sunglade

Sunglade is a condo situated next to the Serangoon MRT station, it was completed in 2003. Buyer who purchased a 1518 sqft, 3 bedroom unit in 2017 and held it for 6 years till 2023, will see a capital gain of 36%, amounting to $579,876 profit.

Situations in which it is not worthwhile paying ABSD

With context set let’s move forward to consider situation in which it is not worth paying ABSD

#1 – When you can decouple and the cost of decoupling is lower than the cost of ABSD

What is decoupling

Decoupling is a common method used by couples to legally avoid paying ABSD. It works by having one party sell his or her share internally to the other co-owner of the property.

This essentially facilitates the “freeing up” of one name to purchase the second property free from ABSD, as IRAS view the party decoupled from the existing property as a first time property owner.

When it is more worthwhile decoupling than paying ABSD

Decoupling comes with its own set if cost which comprise of buyer stamp duty and seller stamp duty on the share value sold internally, legal fee and potentially early loan redemption penalty

But it makes sense to decouple when the cost saving from ABSD is significant compared to the cost of decoupling.


Consider the following example when you are looking to decouple a property valued at 1.2mil, held on a 50/50 joint ownership.

Cost incurred will be as follow

  • Legal Fee – $5,000
  • Buyer stamp duty on 50 percent share – $12,600
  • Admin and valuation fee – $1,000
  • Seller stamp duty – 0 assuming decouple after 3 years from purchase
  • Early loan redemption penalty – 0 assuming decouple after 2 year loan lock in period

This will add up to a cost of $18,600. Comparing this to the cost of paying ABSD on the second property, assuming it cost $1.0 million, the cost of paying 20% ABSD will come up to $200,000.

By decoupling you would enjoy a saving of $181,400.

Restriction in loan quantum when you pay ABSD

Another key benefit of decoupling is that you would enjoy enhanced financing options for your second property. Assuming you were to bite the bullet and proceed with paying ABSD for your property. Beyond the ABSD incurred, you would only be limited to a loan quantum of 45% and would require to pay the remaining 55% with at least 25% cash.

This would significantly increase that amount of cash you will need to finance the second property.

Given that you adopt the decoupling option, you or your spouse will be viewed as a first time property owner and will be allowed to loan up to 75% and for the remaining 25%, only 5% needs to be paid in cash.

#2 – When you can “sell one buy two”

What is “sell one buy two”

Sell one buy two is a method to avoid paying ABSD on your second property. It works best for couples currently co-owning a property that has made significant capital appreciation.

To execute the sell one buy two strategy, couples would first need to sell their existing property, unlocking its capital gain and redeploy the funds from the current property into two other properties, each purchase under the sole ownership of each couple’s name.

It is not worth paying ABSD on your second property if this option is available to you

Similar to the pointers above, by adopting this approach, you will not only enjoy significant cost saving from ABSD but also enjoy enhanced financing for your second property.

The difference between sell one buy two and decoupling

The key difference between sell one buy two and decoupling lies in the fact that decoupling allows you to retain your current property, while sell one buy two would require you to liquidate your current property.

#3 – When you have a short investment horizon

Referring back to the example shared in the earlier section above, by choosing to pay ABSD on your next property purchase will set you back at least $300,000 in transaction cost if you were to purchase a $1.5 mil property.

To ensure you breakeven for this investment, you would have to not only select the right property but you would also need to have a longer time frame investment horizon.

If your goal is to make an investment return within a relatively short time frame of 3-4 years, then paying ABSD would not make sense for you.

In the event that you would need the capital infused into this property purchase for other purposes, then a premature sale of the property will result in a losses due to the high upfront transaction cost incurred due to ABSD.
When it is worth paying ABSD

Having explored the situations in which it is not worth paying ABSD, let’s consider the situation in which you would be better off paying ABSD.

#1 – When you want to keep your HDB flat, while purchasing your 2nd property

As Singapore government policies tightens, only allowing private property owners to purchase resale HDB 15 months after disposal and BTO or EC 30 months after disposal of private property.

This makes HDB flats a prized asset to some. A HDB flats brings with it several benefits

Firstly, it allows an affordable entry price point for a couple to purchase a property in a mature estate. With a $1.0 million budget, one can still afford to purchase a 4 bedder HDB in a central area like Bishan. On the contrary, a 3 bedroom private condo in Bishan would easily cost you $2.2 million.

Next, due to HDB flat’s lower quantum, it remains relatively manageable for property owners to completely paydown its mortgage and become debt free.

Lastly, due to its lower price point, HDB serves as an excellent rental property with rental yield averaging 4% to 5%. Where else a private condo average rental yield hovers around the 3% range.

Decoupling is not allowed for HDB

Unlike private properties, the option of decoupling HDB is not available for HDB property owners. In 2016, the government tighten HDB share transfer policy to only allow transfer of share between co-owners under 6 special circumstances

Paying ABSD the only option for HDB owners to own both a HDB and a condo at the same time

Hence for many HDB owners that have got aspiration to acquire their second property, it may make sense to bite the bullet and simply pay ABSD for it. This allow them to retain their current HDB property while purchasing their second property.

But note, this option is only available to HDB owners that are Singaporean Citizens and have fulfilled their 5 year minimum occupancy period.

#2 – When you have got a significant pool of cash and is looking to acquire your third property

Given that you are an entrepreneur or a savvy investor, your business or investment have done well and you are able to exit with a significant sum of cash.

In the absence of any other new opportunities, you would be looking at purchasing another real estate as a store of wealth.

Assuming you are already owning two properties using both you and your spouse name, paying ABSD to purchase the third residential property could make sense for you.

#3 – It more worthwhile to pay ABSD on your second property than to purchase it using your child’s name

For those of you who are considering purchasing your second property using your child’s name, assuming he or she is above 21 years old.

It could be simpler and more beneficial in the long run to simply pay ABSD due to the following reasons.

Your child will not be able to purchase a HDB

By purchasing a property under your child name, you could deprive them of their opportunity to purchase a HDB or BTO. As they will be deemed as a private property owner and will need to clear a 15 month wait out period before becoming eligible to make a resale HDB purchase.

This could create potential complications for your child as he looks to settle down with his or her spouse in the future. He will not be able to purchase a HDB flat and may not have enough financial resources to purchase another private property to settle down in.

You may lose control of your property

Next, you could potentially lose control of your property as your child is the legal owner of the property. This could be challenging in the event of any disagreement on how the property should be managed between you and your child.
As the legal owner of the property, your child could override your decision and decide who he or she could rent the property to. And in a worst case scenario, sell the property at his or her own will without your agreement.

Your child may not be eligible to the best financing options

Lastly, from a financing standpoint, if your child is still pursuing university education and does not have a stable income. The amount of financing that you would be eligible for the second property could be even more limited than the 45% loan eligibility for a second property, you are eligible to if you were to purchase the property under your name.

Final Words

This marks the end of our article. While we presented both sides of the argument on whether it is worthwhile paying ABSD on your second property. The general idea still trends toward the idea of exhausting all options of minimising ABSD legally first before considering paying ABSD.

And given ABSD is a hefty sum to be incurred, it is critical that due diligence is done in both financial planning and property selection to ensure that the gain on the second property investment supersedes the cost of ABSD.

If paying ABSD is not your thing, check out our article, 2 most practical way on how to buy second property in singapore without absd.

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.

Looking to purchase your second property?

Just fulfilled your MOP status for your executive or BTO or Looking to decouple from your current condomium? Or simple looking to purchase your 2nd investment property? Having assisted over 50 clients on their journey towards purchasing their second property, we have got the expertise to help you avoid unnecessary ABSD, optimise legal cost and clarify your doubts.

Drop us quick Whatsapp message for non obligator questions and answers.

Drop us a text on Whatsapp for non obligatory question and answer.

Get your questions answered by experienced consultants and legal partners

error: Oops - writing original content is fun, give it a shot !

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.