Tue. Feb 11th, 2025

In recent years, Singapore’s property market has seen a flurry of activity, drawing both local and foreign investors. One of the most significant considerations for these investors is the Additional Buyer’s Stamp Duty (ABSD). Understanding methods to avoid ABSD Singapore is crucial for those looking to maximize their returns.

Understanding ABSD

ABSD is an additional tax imposed by the Singapore government to moderate the property market and curb speculative buying. It applies to the second and subsequent property purchases and varies depending on the buyer’s residency status.

Methods to Avoid ABSD Singapore

Investors and homebuyers alike often seek ways to Avoiding ABSD Singapore. Here are several strategies:

Buying Under a Trust

Purchasing property under a trust for a child below 21 years may be a viable option. Since the property is under the child’s name, it is not considered a second property under the parents’ names. This method is subject to legal constraints and requires careful consideration.

Decoupling Ownership

Another method to avoid ABSD Singapore is decoupling ownership. This involves one spouse transferring their share of the property to the other, thereby freeing up one party to purchase a new property under their name without incurring ABSD. However, this strategy also comes with legal fees and other costs.

Buying Under Company Name

Purchasing a property under a company’s name may lead to different tax implications. While not free from taxing, this method can potentially reduce the overall financial burden when compared to individual purchases. Be sure to seek professional advice before opting for this route.

Read more about Avoiding ABSD Singapore here.

How to Buy Second Property in Singapore Without ABSD

Here are concrete steps to consider when aiming to buy a second property in Singapore without ABSD:

Utilize an Executive Condominium (EC)

Executive Condominiums (ECs) can be bought without incurring ABSD, provided they meet specific requirements and are within prescribed income ceilings. This is a popular choice among many young professionals and families.

Explore Properties with Longer Loan Tenures

The increase in loan tenure can reduce the monthly financial burden, making it easier to manage two properties simultaneously. While this does not avoid ABSD directly, it alleviates some of the fiscal pressure, thereby creating an avenue to consider more property investments.

Tapping into Foreign Loan Facilities

Foreign investors may look into offshore loan facilities, allowing them to bypass some of the stringent local regulations. Singapore has several banks offering these services, but clear understanding of their terms is essential.

Conclusion

Avoiding ABSD in Singapore requires strategic planning and legal understanding. Options like purchasing under a trust, decoupling ownership, or utilizing ECs are viable pathways. However, each method comes with its own set of regulations and financial implications that must be scrutinized. With the right approach, it’s possible to maximize property investments without incurring extra taxes.

Investors should always seek professional advice to ensure compliance with all legal requirements and to make informed decisions.

Related Post