Buyer’s Stamp Duty: a Simple Guide for Property Buyers

Man holding model house and a stacks of coins

Property in Singapore is not exactly what one would use the word “cheap” to describe. They are major financial transactions, and buyers will need to account for a variety of additional payments, such as stamp duties. 

As a buyer, you’re not just factoring in the cost of the property itself. You’ll also need to work out how much the associated taxes will cost.

These taxes are known as buyer stamp duties, and are payable to the Inland Revenue Authority of Singapore (IRAS). Stamp duties are taxes on documents related to either the purchase or lease of a property.

If you’re purchasing residential property in Singapore, these properties are almost always subject to stamp duties, with the occasional rare exemption.

Man holding model house and a stacks of coins

Buying property doesn’t mean having enough for just the property itself, since you need to account for Buyer’s Stamp Duty

 

What exactly is Buyer’s Stamp Duty?

Buyer’s Stamp Duty, or BSD for short, is a tax levied on all purchases of property, even HDB flats, within Singapore. This tax applies only to the buyer. 

The amount of BSD you have to pay depends on whichever is the higher of the following:

  • Purchase price of the property (as stated in the signed sale and purchase agreement)
  • Market value of the property (based on the property’s valuation reports)

Even if you manage to negotiate a condo unit valued at $2 million down to $1.8 million, your BSD rate will still be calculated based on the original $2 million, since it’s the higher of the two amounts.

It’s an offence to use a document that hasn’t had its stamp duties paid, and should you ever find yourself in court over any property disagreements, only documents that have had their stamp duties paid will be accepted as evidence.

Before 20th February 2018, the BSD rate was up to 3%. With effect from that date onwards, there are now different rates for BSD, which will depend on whether the property you are buying is residential, or non-residential.  

BSD Rates before 20th Feb 2018

Purchase Price/Market Value

Rates

First $180,000

1%

Next $180,000

2%

Next $640,000

3%

 

BSD Rates on or after 20th Feb 2018

Purchase Price/Market Value

Rates for residential properties

Rates for non-residential properties

First $180,000

1%

1%

Next $180,000

2%

2%

Next $640,000

3%

3%

Remainder

4%


BSD is also rounded down to the nearest dollar. 

For example, let’s say you, a Singaporean Citizen, decides to buy a condominium worth $2 million. Your BSD calculation would then go something like this:

    1. 1% of the first S$180,000
      • $180,000 x 1% = S$1,800
    2. 2% of the next S$180,000
      • $180,000 x 2% = $3,600
    3. 3% of the next S$640,000
      • $640,000 x 3% = $19,200
    4. Remaining Amount of S$1,000,000
      • S$1,000,000 x 4% = S$40,000

So, the BSD payable would be a total of S$64,600.

 

That seems like quite a lot - how will it affect my HDB purchases?

The 1% hike on the BSD will hit the hardest on big-ticket purchases - mostly on expensive private condominiums, bungalows, and land or en bloc property purchases by developers. 

Since the majority of residential property deals are below the $1.5 million dollar mark, this change is not really going to have a huge impact on demand. So, unless the HDB flat you’re eyeing is over $1.5 million, your purchases won’t be affected. For non-residential properties, there are no changes. 

 

Are there any other stamp duties I need to pay for?

As a buyer, another stamp duty that you may have to pay is called Additional Buyer’s Stamp Duty (ABSD), which is one of the property cooling measures introduced by the government to prevent property prices from going sky-high.

ABSD depends on several criteria such as your residency status and how many properties you’re buying. 

The core difference between ABSD and BSD is that while BSD is levied on every property purchase, ABSD only applies to you if you’re a foreigner or permanent resident. If you’re a Singapore Citizen, ABSD applies to you only when you buy more than one property. 

  • For Singaporean Citizens, ABSD will be levied on the second property purchased, and all subsequent properties you buy. 
  • Permanent Residents will have it levied on their second purchase onwards. 
  • Foreigners and corporate entities pay ABSD on all purchases, including their first one.

Also, an HDB flat or property counts towards your first property in ABSD computation.

Just like BSD, the amount of ABSD you need to pay is based on the same factors. It’s based on whichever is the higher of the two - the property’s purchase price or market value. 

One additional factor in the computation of ABSD is your residency status. The ABSD rate you will need to pay is factored on your nationality at the time of your property purchase.

 

Are there any exemptions where I don’t need to pay BSD?

There are some instances where BSD won’t be applicable:

  1. Aborted sale and purchase of properties
  2. Transfer of HDB flat within family
  3. Transfer of assets between associated permitted entities
  4. Transfer of assets upon reconstruction or amalgamation
  5. Acquisition of a residential property on, or before 19th February 2018
    1. The Option to Purchase is granted on or before 19th February 2018, and is exercised before 12th March 2018
  6.  Acquisition of residential land for non-residential development 

If your property purchase falls under any of these categories, you can write to the IRAS within 14 days of acquiring the property. You will need to send in a copy of the acquisition, the original letter of undertaking to comply with the remission conditions, and other documents or evidence necessary for the application.

 

How do I go about paying my BSD, and by when?

You have 14 days to pay your BSD, from the date of the execution of the sale. If the transaction happens overseas, the BSD will need to be paid within 30 days of the documents being received in Singapore. You can’t pay for the BSD in installments, so you’ll need to make sure you have enough to cover the full amount.

Information that you should prepare beforehand includes the personal particulars of both seller and buyer, the address of the property, and the value/price of the property. 

You can e-stamp and pay the duties using the corresponding e-form from the IRAS’s e-Stamping website, using eNets, cheque, or a cashier’s order. Other avenues to pay for your BSD include e-Terminals at the IRAS Surf Centre, and SingPost Service Bureaus. 

 

Can I pay my BSD with my CPF?

You might also be eligible to use your Central Provident Funds (CPF) to pay for the BSD. You’ll have to pay for your BSD first, and then apply for a one-time reimbursement from your CPF account together with your application to use your CPF savings to buy the property.

A man holding on to a few late payment notices

You should always ensure stamp duties are paid on time.

 

What happens if I forget my deadline or am late in paying?

If you don’t pay your stamp duty by the deadline, the IRAS will take action against you. A Demand Note will be sent to you as a reminder when the payment is not made by the due date.

If you’ve missed the deadline, but it’s been less than 3 months, you’ll have to pay a penalty of either $10 or an amount equal to the duty payable - whichever is higher. 

If your delay exceeds 3 months, then the penalty is whichever is the higher of the two: $25, or a whopping 4 times of the duty payable.

The IRAS may take legal action against you if you ignore the Demand Note and miss the stipulated deadline - they may also appoint your bank, employer, tenant or lawyer to pay it on your behalf.

 

Want to know more about Seller’s Stamp Duty instead? Check out our guide here!

Selling

Want to know more about Seller’s Stamp Duty instead? Check out our guide here!

 We also have a handy Stamp Duty Calculator if you need to work out duties payable.

Tools and Calculators

We also have a handy Stamp Duty Calculator if you need to work out duties payable.

To get more guides like this, check out PropertyGuru.

Property Guides

To get more guides like this, check out PropertyGuru.

Read Next