How to avoid ABSD is a compelling question for many property investors in Singapore. Understanding the Additional Buyer’s Stamp Duty (ABSD) rules is crucial to make informed decisions. The following guide offers various strategies on how to buy a second property in Singapore without ABSD.
Read more about Avoiding ABSD Singapore here.
Understanding ABSD
The Additional Buyer’s Stamp Duty was introduced by the Singapore government to cool the property market and curb speculation. Applied on top of the existing Buyer’s Stamp Duty (BSD), it varies depending on the residency status and the amount of property owned.
Effective Strategies for Avoiding ABSD Singapore
There are legal avenues to explore when considering how to avoid ABSD. Here are some effective strategies:
- Decouple Ownership: This involves transferring ownership of the current property solely to one spouse. The other spouse can then purchase the second property under their name without incurring ABSD.
- Purchase Under a Child’s Name: For those with children of legal age, consider buying the second property under their name as they are regarded as first-time buyers.
- Use of Trust: Setting up a property trust for children under 21 can exempt one from ABSD, but it comes with its own set of regulations and costs.
- Foreign Investor Schemes: Some high-net-worth individuals may consider schemes like the Global Investor Programme (GIP), which grants permanent residency. PRs are entitled to lower ABSD rates.
FAQs on Purchasing Property Without ABSD
What is ABSD and why does it matter?
The Additional Buyer’s Stamp Duty (ABSD) is a tax levied on property purchasers in Singapore to control the real estate market. Knowing how to avoid ABSD can save significant costs.
Can permanent residents avoid ABSD?
Permanent Residents (PRs) have lower ABSD rates compared to non-residents, but they are still liable if they own more than one property.
Is decoupling ownership a legitimate method?
Yes, decoupling is a legitimate and commonly used method. However, it’s essential to consult legal advisors to navigate potential pitfalls.
How does purchasing under trust work?
By setting up a trust, a property can be bought for a beneficiary (e.g. a child), free from ABSD. Professional advice is crucial here due to complex legal frameworks.
Conclusion
Navigating Singapore’s property market requires understanding the intricacies of ABSD. With methods like decoupling, leveraging residency status, and trusts, savvy buyers can explore how to buy a second property in Singapore without ABSD. Always consult legal experts to ensure compliance and optimal financial planning.