Agility's Guidelines: Learn about Buyer's Stamp Duty (BSD) in Singapore Property Management

Agility's Guidelines: Learn about Buyer's Stamp Duty (BSD) in Singapore Property Management

According to a summary of Agility's previously shared Property Tax & Property Cooling Measures in 2021, we mentioned the concept of Buyer's Stamp Duty (BSD) - which can be seen as a form of property tax for customers with private residential properties. In fact, real estate in Singapore cannot use the word "cheap" to describe it as some people have said. These are large financial transactions and the buyer will need to factor in many additional payments, such as buyer stamp duty.

As Agility knows that as a buyer, you don't just count on the cost of the property itself. You will also need to calculate how much the associated taxes will cost. These taxes are known as buyer stamp duty and are payable to the Inland Revenue Authority of Singapore (IRAS). Stamp duty is a tax levied on documents relating to the purchase or lease of real estate. If you are purchasing residential property in Singapore, these properties are almost always subject to stamp duty, which is occasionally waived.

Agility's Guidelines: Learn about Buyer's Stamp Duty (BSD) in Singapore Property Management

Agility's Guidelines: Learn about Buyer's Stamp Duty (BSD) in Singapore Property Management

If you are interested in investment, and have questions related to Singapore real estate. Perhaps you should take a look at Agility's activities and direction in the Singapore property management market, where we have provided diverse property management solutions to our clients. Next, check out the AAA Multi-Strategy Real Estate VCC - a fund that creates multiple separate sub-funds to help clients invest in a range of other investments that interest them. At the same time, we have also consulted on issues related to property tax to help customers minimize unnecessary risks.

Agility explains to you what Buyer's Stamp Duty is in Singapore Property Management

To the extent of Agility's knowledge, we will explain this concept to you in the easiest way. Buyer's Stamp Duty, or BSD for short, is a tax levied on all purchases of real estate, even HDB apartments, within Singapore property management. This tax only applies to the buyer. Of which, the amount of BSD you have to pay depends on which of the following amounts is higher:

▶ Purchase price of the property (recorded in the signed sales contract)

▶ Market value of the property (based on property valuation reports)

Even if you try to negotiate an apartment unit worth $2 million to $1.9 million, your BSD rate will still be calculated based on the original $2 million, because it's high than in two amounts. It is a violation to use unpaid documents with a stamp, and if you are to appear in court over any property dispute, only documents that have been filed will be accepted as evidence.

According to Agility, buying a property doesn't mean just having enough for the property itself, as you need to take into account Buyer's Stamp Duty in Singapore property management

According to Agility, buying a property doesn't mean just having enough for the property itself, as you need to take into account Buyer's Stamp Duty in Singapore property management.

Agility explains how much buyers have to pay for Buyer's Stamp Duty in Singapore Property Management

Buyer Stamp Duty (BSD) is a tax payable upon acceptance of Option to Purchase/ Sale and Purchase Agreements. It is a hierarchical system and is always based on the asset price or higher valuation of your property. Buyer stamp duty is always charged on the property's bank-specified value or purchase price, whichever is higher.

To make this clear, let's say you buy a property with a selling price of $2,500,000. The property has a market value (valuation) of $2,700,500. Since the valuation amount is higher than the actual purchase price, BSD will be calculated on the valuation figure of $2,700,500.

For properties purchased on or after February 20, 2018, the BSD has been revised and is taxed differently for residential and non-residential real estate. The top tier BSD rate for residential properties in Singapore has been increased to 4% from 3%. BSD is also rounded down to the nearest dollar.

For example, if you are a Singapore Citizen buying a $2 million condominium, your BSD calculation would then look like this

▶1% of the first S$180,000
$180,000 x 1% = S$1,800

▶2% of the next S$180,000
$180,000 x 2% = $3,600

▶3% of the next S$640,000
640,000 USD x 3% = 19,200 USD

▶Remaining amount 1,000,000 Singapore dollars
$1,000,000 x 4% = $40,000

So the amount of BSD to be paid would be a total of $64,600.

For example, a $500,000 HDB flat will incur (3% x $500,000) - $5,400 = $9,600 in Buyer Tax. If the property you're buying is on sale or is worth less than $1 million, here's an alternate formula you can use to quickly calculate BSD: (3% x purchase price or market value) - $5,400 = BSD you pay

Agility: Buyer Stamp Duty (BSD) rates after 20th Feb 2018

Agility: Buyer Stamp Duty (BSD) rates after 20th Feb 2018

Prior to February 20, 2018, the BSD rate was up to 3% and it was widely applied, whether residential or non-residential real estate. As part of the property cooling measures introduced on February 20, 2018, the BSD was revised to add an additional 4% rate for amounts over $1 million, for real estate only House. Buyer Stamp tax rates for residential properties under $1 million and for all non-residential properties, remain the same.

The 1% increase for Buyer Stamp Duty is aimed at larger purchases, such as private condominiums, bungalows, and developers' purchases of land or real estate. For those buying HDB condos below or close to the $1 million mark, there will be little impact on your purchase.

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As a buyer, another stamp duty you may be paid is called Additional Buyer's Stamp Duty (ABSD), which is one of the property cooling measures introduced by the government to stem property prices. soaring high. ABSD depends on several criteria such as your residency status and the amount of property you are purchasing. The core difference between ABSD and BSD is that although BSD is charged when purchasing real estate, ABSD only applies to you if you are a foreigner or permanent resident. If you are a Singapore citizen, ABSD only applies to you when you purchase multiple properties. Detailed information about ABSD will be updated in the next section. Keep discovering more guides and latest news on the Singapore brokerage market and the information we have put together, you may find something that interests you.

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