Purchasing a second property in Singapore presents unique challenges due to the Additional Buyer’s Stamp Duty (*ABSD*). However, savvy buyers may discover strategies to avoid ABSD Singapore and secure their second home. This article explores several ways to achieve this goal strictly within the legal framework.

What is ABSD?

The government introduced the Additional Buyer’s Stamp Duty (ABSD) as a cooling measure for the property market. This tax aims to curb speculative investments and stabilize property prices. Different ABSD rates apply depending on the buyer’s residency status and the number of properties owned.

Ways to Avoid ABSD When Buying a Second Property

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1. Decoupling Property Ownership

Decoupling involves transferring ownership of an existing property from joint names to a single name. This way, a newly-decoupled spouse is classified as a first-time buyer for a new property purchase.

• Ensure clear and smooth transfer of ownership.
• Be prepared to shoulder legal and administrative fees.
• Evaluate the implication on mortgage loans and CPF usage.

2. Buy Under a Trust

A property purchase under a trust can help to avoid ABSD, despite recent regulatory adjustments. This arrangement is generally reserved for parents buying on behalf of their children under 21.

• Understand that the trust property cannot be sold until the beneficiary reaches legal age or as defined by the trust deed.
• Consultation with legal experts and financial advisors is necessary to ensure compliance.

3. Purchase a Commercial Property

Residential ABSD does not extend to commercial properties. This shift focuses on business rather than residential investment, an effective method to escape ABSD.

1. Research commercial property types: retail, office, or industrial.
2. Understand the different risks and yields associated with commercial properties.
3. Engage with property and financial advisors for strategic investment planning.

4. Leverage Expatriate Privileges

Foreigners and PRs married to Singaporean citizens can leverage their status to avoid ABSD. Typically, the Singaporean spouse purchases the property first.

• Ensure to register the property solely in the Singaporean spouse’s name.
• Understand the long-term impact on property ownership and family finances.

FAQs About Avoiding ABSD in Singapore

Q: Can foreigners avoid ABSD in Singapore?

A: Foreigners generally cannot avoid ABSD unless they qualify for specific schemes or privileges. Consulting with real estate experts and financial advisors is crucial for detailed guidance.

Q: Is it legal to avoid ABSD?

A: Yes, as long as it is done through legal avenues such as decoupling, trust purchases, and other government-compliant strategies.

Q: Why is ABSD implemented?

A: ABSD is a cooling measure designed to maintain a stable property market by discouraging speculative property investments and ensuring affordability for residents.

Conclusion

Strategically navigating the property landscape in Singapore can help avoid ABSD Singapore. Methods such as decoupling ownership, buying under a trust, investing in commercial properties, and leveraging expatriate privileges are effective mechanisms for astute investors. Always seek expert legal and financial counsel to ensure compliance and informed decision-making.