What is the 99-1 ABSD loophole and how is it different from decoupling ?


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The recent barrage of news over IRAS investigation into “artificial schemes” contrived to avoid taxes has shed lots of limelight on the term “99-1 ABSD loophole”.

For those that are slightly more informed, you would know that the term “decoupling” has been tangled into the conversation as well.

The fact that you are here, grinding through long form articles about 99-1 ABSD loopholes, instead of gallivanting over news flashes on facebook. I reckon you fall into the following 2 categories of reader.

You are either making plans to own your second investment property and have been introduced to the terms “99-1”, “decoupling”, or you have already implemented some form of 99-1 arrangement previously and is looking for directions on what to do next.

In both cases, we got you covered.

Focus of this article

In this article, we will dive into the legality of the whole 99-1 ABSD avoidance scheme and explore the difference between decoupling and the infamous 99-1 ABSD loophole.

A little bit about ourselves

If this is the first time you read our articles, allow us to introduce ourselves.

We are a team of real estate investors turned full time realtors. We specialise in decoupling properties, helping like minded property owners find the optimal way to own their second property without ABSD.

Our articles were written based on knowledge we have accumulated working on our own property portfolio and also our experience in helping over 89 fellow property owners own their second property till date.

If reading is not your thing, feel free to drop us a text and we will be happy to clarify any doubts you have with regards to property decoupling.

How does the 99-1 ABSD loophole work ?

To properly understand the inner works of the 99-1 ABSD loophole. We must first understand the factor that motivates its use, ABSD.

Additional buyer stamp duty, also known as ABSD is a stamp duty levied on property owners by IRAS. Its main objective is to discourage Singaporeans from owning more than one property. A Singaporean citizen looking to purchase his 2nd investment property will have to pay his due of 20% on the purchase price of property to IRAS, that is a hefty $200,000 on a $1 million property.

For complete ABSD rates refer IRAS rate table

That’s when the 99-1 strategy was birthed, to exploit a loophole that could result in significant savings from ABSD.

Understanding the 99-1 ABSD loophole and how it is being exploited

The best way to understand the 99-1 ABSD loophole, is to see it in action.

Imagine. You have got some early success in your job and currently own a private condo solely under your name.

You met your spouse and now aspire to own a 2nd property together with your spouse, but you are unwilling to pay the 20% ABSD levied on your 2nd property.

Adopting the 99-1 strategy, you would first get your spouse to front the purchase of the property. As she currently does not own any property, no ABSD will be levied on her purchase.

Side note. For this to work, the ownership structure has to be structured under a tenancy in common structure that allows the splitting of shares in different proportions, instead of the usual 50/50 joint tenancy structure.

Shortly, after the purchase, she would sell 1% of her ownership share to you.

And you would only need to pay ABSD on that 1% share instead ABSD on the full purchase price of property.

This is how the numbers works out

The usual route – without exploiting the 99-1 ABSD loophole

  • Assuming the purchase of a $1 million property.
  • ABSB will be 20% on $1 million, coming up to $200,000.

The 99-1 share split strategy

  • ABSD will be 20% on $100,000 (1% value of property)
  • ABSD amounting to only $20,000.

Cost saving from exploiting this ABSD loophole adds up to $180,000.

The other motivating factor behind the exploitation of the 99-1 ABSD loophole

Why have your spouse sell 1% share to you ? Wouldn’t it be simpler if she maintains 100% ownership?

Aside from savings on ABSD, the desire to be eligible for a higher quantum bank loan is the other important factor that comes with the 99-1 strategy.

Given the purchase was solely fronted by your spouse. The TDSR (total debt servicing ratio) which stipulates that the total monthly debt obligation of an individual to not cross 55% of his/her earnings, will be evaluated only on the basis of your spouse’s salary.

Roping you into the mix via the 1% sale of share, will all you to include your salary into the base for evaluation, enhancing the eligibility to take a bigger bank loan.

If you are interested to understand more about the challenges associated with 2nd property loan to value limits and how much CPF you can use for your second property, check out article inline.

Is legal to adopt a 99-1 share split ownership structure for your next property purchase ?

Addressing the elephant in the room. Is it legal to adopt a 99-1 share split ownership structure for your next property purchase ?

The answer is no and yes.

Adopting a share splitting structure of any permutation to purchase a property is not illegal.

In fact we have written extensively on the inner works of the 99-1 tenancy in common shareholding structure and how it can help you when decoupling.

But what’s illegal are schemes engineered to intentionally avoid tax.

In the words of Singapore’s tax authority, “contrived or artificial” setups that home buyers used to avoid tax is deemed as tax avoidance. Refer to recent Channel News Asia publication 

And this will go beyond 99 to 1 percent share split into share split of any permutations. From the news flow, it seems that IRAS is specifically identifying cases with the following characteristics.

Buyers who have entered into a 99-1 scheme, when the 1% stake was sold immediately after the purchase option is exercised and buyer of the 1% share was owning another property at the point in time.

So to rehash what’s illegal and what’s not

Not illegal

  • Purchasing a property using a 99-1, 90-10 or any other permutation of shareholding structure
  • It is perfectly legitimate and reasonable for investors or couples to adopt this shareholding structure, to account for clear allocation of financial contribution and the freedom to make autonomous decision on their share holding.

Legal disclaimer – please do not take this as legal advice, please consult qualified legal counsel for confirmation of case based on your personal circumstances

Signs of Illegality (taking reference from case undergoing investigation)

  • Initially purchasing the property under one name without incurring any ABSD
  • “Immediately” selling 1% share to another joint owner
  • And that joint owner owns an existing property at the point of purchase
  • Resulting in significant cost saving from ABSD

The confusion between 99-1 loophole and decoupling

Now let’s talk about the 99-1 loophole strategy’s distant cousin, decoupling.

If you have not been acquainted with term decoupling, you will definitely come across it in your quest to purchase a second property.

Decoupling is a method often used to “free up” one party’s name from a property jointly owned by a couple, via the sale of shares from one party to the other.

Allowing one party whose name has been relinquished from the ownership of the current property, to purchase the 2nd property free of ABSD.

How is decoupling normally implemented

Let’s take a closer look at how decoupling is normally implemented to understand how the confusion arises.

Referencing the same example of you and your house purchasing a property.

This time round both you and your spouse do not own any existing property.

But with a plan to purchase a 2nd property in the future, you and your spouse entered your first property purchase using a 99-1 tenancy in common structure. With you owning 99% stake in the property and your spouse owning 1% stake.

Couple of years down the road, when both you and your spouse earning power increased. Your spouse will sell her 1% stake to you, freeing up her name. When she purchases the 2nd property under her name, no ABSD will be levied as IRAS deem this as the only property under her ownership.

The difference between decoupling and 99-1 share scheme

Now you should be able to understand how the similar adoption of the 99-1 shareholding structure caused decoupling to be associated with the controversial 99-1 ABSD loophole strategy.

That aside, there are significant differences between decoupling and the 99-1 scheme used to exploit the ABSD loophole.

For decoupling, both parties purchase the property together, unlike 99-1, one party “fronts” the purchase first then sells 1% share to another party.

For decoupling, at the point of purchase of the 1st property, both parties do not own any property. Whereas for 99-1, the purchaser of the 1% share owns a property and is supposed to pay the full ABSD, had the normal route been taken.

For more insights on a decoupling 99-1 strategy refer to our dedicated article that provide a in depth discuss on the benefit of combining decoupling and the 99-1 tenancy in common ownership structure.

Is decoupling illegal ?

Referencing our earlier point on IRAS statement.

It is legal to adopt a share split ownership structure and selling of ownership stakes between owners remains above board. As long as there is no artificial setup engineered to avoid tax.

In any case, do not take anyone’s word for it.

Make sure to seek proper legal advice from a experience decoupling lawyer before proceeding.

And this is the point when it is important to avoid being penny wise pound foolish. Sometimes, paying a bit more decoupling lawyer fees, for a quality decoupling lawyer can help you sleep soundly at night.

More factors to be considered before decoupling.

Ready to decouple ? Not yet.

As there are costs such as buyer stamp duty, seller stamp duty, legal fees and early loan redemption penalty, involved in decoupling. The first line of thought is to consider if the cost savings from ABSD supersedes the cost of decoupling.

As a side note use the following calculator to easily calculate the cost of ABSD and cost of decoupling

Next, with two properties comes greater financial liabilities, it will be important to plan ahead and cater for unforeseen fluctuations in interest rate or employment circumstances.

Check the following for more in depth coverage on decoupling .

How is IRAS clamping down on the 99-1 loophole?

IRAS is currently investigating suspicious looking transactions involving 99-1 schemes and will also cover cases with shareholding greater than 1.

It has been reported that prior to this, IRAS has sent letters to some first time buyers asking for justification for the rationale on selling 1% of the property to relatives within a short time frame after exercising the purchase option.

A bounty program rewarding whistleblower rewards up to $100,000 for calling out private buyers who have used the 99-1 scheme has also been implemented.

The current penalty for convicted tax avoidance stands at a bill for unpaid ABSD and a 50% surcharge on the ABSD payable.

What can you do if you have committed 99-1 or are planning to do so ?

It is worth noting that IRAS has mentioned that there is no time bar for stamp duties, meaning they can conduct audits on any past stamp duty cases and transactions.

If you have previously engaged in a 99-1 share split arrangement, there is an option to make a voluntary disclosure and IRAS will look at the case more favourably 

In any case, it is best to consult the advice of an experienced lawyer before taking any actions.

List of lawyer for consideration

To help our readers out with next steps, we have done some research and came up with a list of experienced conveyancing lawyers for consideration.

By no means this list is exhaustive, but it will prove to be a good starting ground to work from.

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.