We just listed an exclusive unit for sale that can help you save up to $357,500 on ABSD! You may ask HOW and WHY? Well, ABSD is exempted from commercial properties in Singapore and this unit is registered as a commercial unit BUT you can choose to use it for residential purposes too! It is a duplex unit located in Tiong Bahru, freehold and they offer the same facilities as a condo – pool, gym, etc. Reach out to us if you are interested and read on to understand more about the BSD and ABSD!
What is BSD and ABSD?
Buyer’s Stamp Duty (BSD) and Additional Buyer’s Stamp Duty (ABSD) are property tax payable to the government when you purchase a property in Singapore. The amount to be paid varies, depending on:
- Value of the property
- Property type – Residential / Commercial
- Citizenship status of buyer(s) – Singaporean / Permanent Resident / Foreigner
- Number of properties owned by the buyer(s)
BSD
BSD is the tax payable by the buyer upon signing of documents on the purchase of a property. The amount is based on the purchase price or market value of the property, whichever is higher.
Based on the value of the property, BSD goes up to 4% for a residential unit and up to 3% for a commercial unit. The rates for BSD apply to everyone, regardless of their citizenship status and the number of properties owned.
For instance, a buyer is looking to buy a property at $2 million dollars.
| Residential | Commercial | |
| First $180,000 |
1% $180,000 x 1% = $1,800 |
1% $180,000 x 1% = $1,800 |
| Next $180,000 |
2% $180,000 x 2% = $3,600 |
2% $180,000 x 2% = $3,600 |
| Next $640,000 |
3% $640,000 x 3% = $19,200 |
NA |
| Remaining amount |
4% ($2,000,000 – ($180,000 + $180,000 + $640,000)) x 4% = $40,000 |
3% ($2,000,000 – ($180,000 + $180,000)) x 3% = $49,200 |
| BSD Payable | $1,800 + $3,600 + $19,200 + $40,000 = $64,600 | $1,800 + $3,600 + $49,200 = $54,600 |
ABSD
ABSD is the tax levied on top of the BSD, payable by the buyer. The amount is based on the purchase price or market value of the property, whichever is higher. This only applies for residential properties as purchase of commercial properties does not require ABSD.
The percentage of ABSD payable for residential units varies according to the number of properties you’ve owned and your citizenship status – Singaporean, Permanent Resident or Foreigner.
Singaporean
Singaporeans do not have to pay for ABSD on the purchase of their first residential property. However, the ABSD rate jumps up to 12% for their 2nd property purchase and 15% for their 3rd and subsequent properties.
For instance, a Singaporean buyer is looking to buy a residential property at $2 million dollars.
|
1st Property |
2nd Property |
3rd Property |
4th Property |
|
No payable ABSD |
$2,000,000 x 12% = $240,000 |
$2,000,000 x 15% = $300,000 |
$2,000,000 x 15% = $300,000 |
|
Total Payable Property Tax (BSD + ABSD): |
|||
|
$64,600 (only BSD) |
$64,600 + $240,000 = $304,600 |
$64,600 + $300,000 = $364,600 |
$64,600 + $300,000 = $364,600 |
Permanent Resident
Permanent Residents pay 5% of ABSD on their first property purchase in Singapore and it jumps to 15% on their 2nd and subsequent purchases.
For instance, a Permanent Resident buyer is looking to buy a residential property at $2 million dollars.
|
1st Property |
2nd Property |
3rd Property |
4th Property |
|
$2,000,000 x 5% = $100,000 |
$2,000,000 x 15% = $300,000 |
$2,000,000 x 15% = $300,000 |
$2,000,000 x 15% = $300,000 |
|
Total Payable Property Tax (BSD + ABSD): |
|||
|
$64,600 + $100,000 = $164,600 |
$64,600 + $300,000 = $364,600 |
$64,600 + $300,000 = $364,600 |
$64,600 + $300,000 = $364,600 |
Foreigner
Foreigners pay 20% of ABSD on all property purchases in Singapore.
For instance, a foreigner is looking buy a residential property at $2 million dollars.
|
1st Property |
2nd Property |
3rd Property |
4th Property |
|
$2,000,000 x 20% = $400,000 |
$2,000,000 x 20% = $400,000 |
$2,000,000 x 20% = $400,000 |
$2,000,000 x 20% = $400,000 |
|
Total Payable Property Tax (BSD + ABSD): |
|||
|
$64,600 + $400,000 = $464,600 |
$64,600 + $400,000 = $464,600 |
$64,600 + $400,000 = $464,600 |
$64,600 + $400,000 = $464,600 |
However, there are some exceptions. Under the Free Trade Agreement (FTA), the nationalities listed below are able to enjoy the same stamp duty as Singaporeans:
- Nationals and Permanent Residents of Iceland, Liechtenstein, Norway and Switzerland
- Nationals of the United States of America
Should I invest in a commercial or residential property?
Investment on commercial properties usually have higher returns than residential properties. However, there are many factors to consider like how much capital you have, how much of a risk-taker you are, the type of tenants you are looking for, what you are planning to get out of it, etc. For example, investing in a commercial property often requires more on-site maintenance and efficiency is key as compared to property for residential use. It is important to set your intentions right and do enough research before you make your decision.