New ABSD rates for 2nd property onwards and foreigners
Latest measures for a sustainable property market
Singapore – The Singapore government announced an increase to the Additional Buyer Stamp Duty (ABSD) rates in the evening of 26th April 2023. Previous changes on absd rates were made in December 2021 and September 2022. It did little effect on the property market as shown in the 1st quarter of 2023. The property market showed signs of acceleration amid resilient demand.
There were increased demand from local Singaporeans mostly buying homes for owner-occupancies. There were also strong demand from local and foreign investors in our residential market. The concern will be when left unchecked, the property prices can be out of proportion in relative to income.
This new ABSD rates will not affect HDB and Executive condominium transactions. Efforts has been made to pump up supply of private housing. The 1st quarter of 2023 has seen 4100 units being released for sale in the Government Land Sales Programme from 3500 units in the second half of 2022
In the public housing the government they have launched more than 23,000 flats in 2022 and will also launch up to 23,000 new BTO flats in 2023. They are also prepared to launch up to 100,000 new flats between 2021 to 2025.
While Covid 19 did lead to severe delays in the private and public housing projects, the government and developers are now back on track. Almost 40,000 public and private housing were completed in 2023. There will be a projected 100,000 homes to be completed from 2023 to 2025.
New ABSD rates
The new changes will take effect on 27th April 2023. This changes is intended to control the investment demand in Singapore properties.
The new Additional Buyer Stamp Duty rates are as follows.
- Singaporeans purchasing their 2nd residential property – from 17% to 20%
- Singaporeans purchasing their 3rd residential property – from 25% to 30%
- Singapore Permanent Residents purchasing their 2nd property – from 25% to 30%
- Singapore Permanent Residents purchasing their 3rd property – from 30% to 35%
- Foreigners purchasing any residential properties – from 30% to 60%
- Entities or Trust purchasing Singapore residential properties (except developers) – from 35% to 65%
Data showed 10% of transaction affected by the increment.
According to 2022 data, 90% of the transactions made in that year were from first time property buyers. The raise in ABSD rates will affect 10% of residential transactions. The ABSD rates for 1st time Singaporean and Singapore Permanent Resident (SPR) remains unchanged at 0% and 5% respectively.
How is ABSD calculated?
- Purchases made jointly by 2 or more buyers of different profiles, the highest ABSD rates will be applied.
- Married couples of 1 Singapore Citizen buying a 2nd residential properties together can still apply for refund should they dispose of their 1st property within 6 months after A)date of purchase of the 2nd property if this is a completed property. B)the issue date of Temporary Occupation Period (TOP) or Certificate of Statutory Completion (CSC) of the 2nd property whichever is earlier if the 2nd property is not completed at the time of purchase.
The revised ABSD rates will take effect on all residential properties transacted or after 27th April 2023.
There will be a transitional provision for those properties acquired on or before 26th of April 2023. The previous ABSD rates will be applied for these properties and must meet all conditions as follows.
- Option to purchase (OTP) was granted on or before 26th April 2023
- This OTP is exercised on or before 17th May or within the OTP validity period whichever is earlier.
- This OTP has not been varied on or after 27th April 2023.