The Government has increased the Additional Buyer’s Stamp Duty (ABSD) rates to promote a sustainable property market, with effect from 27 April 2023.
Additional Buyer’s Stamp Duty (ABSD) Rates
The specific ABSD rates increases are as follows:
- Raise ABSD rate from 17% to 20% for Singapore Citizens (SCs) purchasing their 2nd residential property;
- Raise ABSD rate from 25% to 30% for SCs purchasing their 3rd and subsequent residential property, and Singapore Permanent Residents (SPRs) purchasing their 2nd residential property;
- Raise ABSD rate from 30% to 35% for SPRs purchasing their 3rd and subsequent residential property;
- Raise ABSD rate from 30% to 60% for foreigners purchasing any residential property; and
- Raise ABSD rate from 35% to 65% for entities or trusts purchasing any residential property, except for housing developers.
Based on 2022 data, the above ABSD rate increases will affect about 10% of residential property transactions.
The ABSD rates for SCs and SPRs purchasing their first residential property, which constitutes about 90% of residential property transactions based on 2022 data, will remain at 0% and 5%, respectively.
For acquisitions made jointly by two or more parties of different profiles, the highest applicable ABSD rate will apply.
Why is the government raising Additional Buyer’s Stamp Duty (ABSD)?
The implementation of the property market measures in December 2021 and September 2022 have had a moderating effect. However, in 1Q2023, property prices showed renewed signs of acceleration amid resilient demand.
Demand from locals purchasing homes for owner-occupation has been especially strong, and there has also been renewed interest from local and foreign investors in our residential property market.
If left unchecked, prices could run ahead of economic fundamentals, with the risk of a sustained increase in prices relative to incomes.
To promote a sustainable property market and prioritise housing for owner-occupation, the Government has raised the ABSD rates further to pre-emptively manage investment demand.