Singapore Government Increases Stamp Duty Rates: Foreign Buyers Face Hike from 30% to 60% Effective April 27, 2023

The Singapore government has announced a significant increase in the Additional Buyer’s Stamp Duty (ABSD) rates, aimed at managing investment demand and fostering a sustainable property market. This adjustment will take effect immediately from April 27, 2023, according to a joint press release issued by the Ministry of National Development (MND), the Ministry of Finance (MOF), and the Monetary Authority of Singapore (MAS) on the night of April 26.

In response to recent trends, the government noted that prior measures implemented in December 2021 and September 2022 had a moderating impact on the market. However, the first quarter of 2023 saw a renewed acceleration in property prices due to strong demand from both local homebuyers and foreign investors.

“If left unchecked, prices could outpace economic fundamentals, posing the risk of a sustained increase in prices relative to incomes,” the statement warned. This latest increase marks the third round of cooling measures since December 2021.

ABSD Rate Changes:
The new ABSD rates are as follows:

Singapore Citizens: Increased from 17% to 20% for those purchasing their second residential property.
Increased from 25% to 30% for citizens buying their third and subsequent properties, as well as for permanent residents (PRs) purchasing their second property.
Increased from 30% to 35% for PRs buying their third and subsequent properties.
Foreign Buyers: Increased from 30% to 60% for any residential property purchase.
Entities or Trusts: Increased from 35% to 65% for any residential property, excluding housing developers.
The ABSD rates for Singapore citizens and PRs purchasing their first residential property will remain at 0% and 5%, respectively, affecting about 90% of residential property transactions based on 2022 data. Overall, the new ABSD adjustments are expected to impact around 10% of residential property transactions.

Rules and Conditions:
For joint acquisitions involving parties with different profiles, the highest applicable ABSD rate will apply. Married couples with at least one Singapore citizen spouse who purchase a second residential property can continue to apply for a refund of ABSD under certain conditions, including the requirement to sell their first property within six months of purchasing the second.

The ABSD does not affect those purchasing HDB flats or executive condominiums from developers with an upfront remission if any joint acquirers are Singapore citizens, and this policy remains unchanged.

Cut-off Date:
The revised ABSD rates will apply to all residential properties acquired on or after April 27, 2023. However, a transitional provision allows the previous rates to apply for cases that meet specific criteria, including the issuance of the option to purchase (OTP) on or before April 26, 2023, and its exercise by May 17, 2023.

Additionally, the Additional Conveyance Duties for Buyers (ACDB), which applies to qualifying acquisitions of equity interest in property holding entities, will rise from up to 46% to up to 71%.