Singapore: Taxes


Tax on acquisitions and disposals

Types of taxes

Buyer’s Stamp Duty (BSD)
BSD is payable on the acquisition of immovable properties, based on the higher of the purchase consideration or market value.

Additional Buyer’s Stamp Duty (ABSD)
A person who purchases or acquires residential properties may have to pay ABSD in addition to the prevailing BSD. Similar to BSD, ABSD is payable based on the higher of the purchase consideration or market value.

The ABSD liability will depend on the profile of the buyer as at the date of purchase or acquisition of the residential property, taking into account one or more of the following factors:

  • Whether the buyer is an individual or an entity;
  • The residency status of the buyer; and
  • The count of residential properties owned by the buyer.

Seller’s Stamp Duty (SSD)
While ABSD is only applicable to residential properties, SSD targets both residential and industrial properties. SSD is payable on all residential properties bought on or after 20 February 2010, and all industrial properties that are bought on or after 12 January 2013 sold within the respective holding period.

Additional Conveyance Duty (ACD)
Broadly, ACD would apply if the purchaser acquires shares in a property-holding entity (PHE) and is either:

  • already a significant owner of the PHE before the acquisition; or
  • becomes a significant owner of the PHE thereafter.

Property-holding entity (PHE)
For a target entity to be considered as a PHE, at least 50% of its total tangible assets must comprise of prescribed immovable properties in Singapore – such properties include property that is zoned or situated on land that is zoned “Residential”, or that is permitted to be used for solely residential purposes or for mixed purposes one of which is residential.

Significant owner
A significant owner of a PHE refers to a person or entity who beneficially owns at least 50% equity interest or voting power in a PHE either on its own or with its associates.

Associates
Where the buyer/seller is an individual, his/her associates include:

  • Family members such as grandparent, parent, child, grandchild, sibling or spouse;
  • Partners in a partnership, limited partnership or limited liability partnership;
  • The entities which the buyer/seller beneficially owns 75% or more voting capital and more than 50% voting power in; or
  • Parties to an agreement acting together to acquire the shares in the target entity.

Where the buyer/seller is an entity, its associates include:

  • Subsidiaries which it beneficially owns 75% or more voting capital and more than 50% voting power in;
  • Individuals who or holding entities that beneficially owns 75% or more voting capital and more than 50% voting power in it;
  • Other entities in the group that is an associated entity to a common holding entity or individual which meets condition (ii) above;
  • Partners in a partnership, limited partnership or limited liability partnership; or
  • Parties to an agreement acting together to acquire the shares in the target entity.

The ACD payable is calculated by applying the relevant ACD rates on the percentage of equity interest that is subject to the ACD, and the market value of the underlying residential property owned directly/indirectly by the PHE.

In addition to existing stamp duty on shares, the applicable ACD rates are as follows:-

Additional Conveyance Duties for Buyers (ACD):

  • Existing BSD at 1% to 4%; and
  • ABSD at 30% (flat rate).

Additional Conveyance Duties for Sellers (ACDS):

  • Seller’s Stamp Duty at 12% (flat rate).

Other taxes

Property Tax
Property tax is payable by the landowner regardless of whether the property is owner-occupied, rented out or left vacant. The amount payable is calculated by multiplying the Annual Value of the property with the applicable property tax rate.

Goods and Services Tax (GST) – While sales of residential properties are exempted from GST, a purchaser of non-residential property may be liable for payment of the GST.

Capital Gains Tax – Generally, the gains derived from the sale of a property in Singapore are deemed as a capital gain which is not taxable.

However, such gains may be taxable if the property is sold with a profit-seeking motive, or if the vendor is deemed to be trading in properties. Whether a person is deemed to be trading in properties will depend on individual circumstances. Some criteria used to assess if one is trading in properties are as follows:

  • Frequency of transactions (buying and selling of properties);
  • Reasons for acquiring and selling of property;
  • Financial means to hold the property for long term; and
  • Holding period.

Tax treaties

Singapore has Free Trade Agreements (FTA) under which nationals or permanent residents of our FTA partner countries are eligible for ABSD remission.

In addition, Singapore has comprehensive Double Taxation Agreement/Arrangement (DTA) with several jurisdictions. Double taxation arises when two or more tax jurisdictions overlap, such that the same item of income or profit is subject to tax in each, and DTA prevents double taxation and fiscal evasion and encourages cooperation between Singapore and other international tax administrations.

To view in full, please click here. – Commercial Real Estate Guide.pdf

Updated on 1 February 2019.

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