Following the recent news on the temporary relief measures for property buyers and developers, you might be interested to know how you can apply for the Additional Buyer’s Stamp Duty (ABSD) remission if you’re a property buyer.
Here’s an essential guide to help you.
First off, what’s the relief measures about?
As you know, the COVID-19 pandemic has impacted the economy severely. While the Singapore government has deployed economic support for the tourism, aviation and hospitality industries, such relief wasn’t available for the real estate sector, until now that is.
In a press release made by the government on 6 May, married Singaporean couples who bought a second property will now have a year instead of six months previously to sell their first property in order to get the 12% ABSD remission for the second property.
Under the ABSD rule, a Singaporean married couple will need to sell their first property before buying the second home to get the remission:
1. Six months after the date of purchase of the second home, if it is a completed property; or
2. Six months after the issue date of the Temporary Occupation Permit (TOP) or Certificate of Statutory Completion (CSC), whichever is the earlier, if the second property was not completed at the time of purchase
In addition to the ABSD remission for married couples, the government is giving another six-month extension to private property developers who saw their construction projects and sales affected by COVID-19. These include:
1. Extension of the Project Completion Period (PCP) by 6 months for residential, commercial and industrial development projects
2. Extension of time by 6 months for the commencement and completion of residential development, and sale of housing units in residential development projects in relation to the remission of the Additional Buyer’s Stamp Duty (ABSD) for housing developers; and
3. Extension of the PCP and/or disposal period by up to a total of 6 months for residential development projects under the Qualifying Certificate (QC) regime for foreign housing developers.
Criteria for ABSD remission
As mentioned, the ABSD relief measure is only for Singaporean married couples who jointly purchase a property together.
To qualify for the temporary relief measures, these conditions will need to be met:
1. The couple’s second home was jointly purchased on or before 1 Jun 2020; and
2. The schedule for the sale of the first property expired on or after 1 Feb 2020
How married couples can apply for the ABSD extension:
If you qualify for the above conditions and other conditions under the ABSD spouses remission, you can apply for the refund by sending an email to estamp@iras.gov.sg with the subject “Temporary Relief Measures for ABSD Spouses Remission – Insert Property Address”, containing the following declaration/documents:
a. Declaration that:
i. On the date of purchase of the second residential property, each of the purchasers (i.e. the married couple) did not own interest in more than 2 residential properties,
ii. As at the date of sale of the first residential property,
• The couple remains married,
• There is no change of ownership in the second residential property at the time of sale of the first residential property, and
• The couple has not purchased or acquired any other residential property since the purchase of the second residential property;
i. On the date of purchase of the second residential property, each of the purchasers (i.e. the married couple) did not own interest in more than 2 residential properties,
ii. As at the date of sale of the first residential property,
• The couple remains married,
• There is no change of ownership in the second residential property at the time of sale of the first residential property, and
• The couple has not purchased or acquired any other residential property since the purchase of the second residential property;
b) Confirmation if the second residential property is a completed or uncompleted property at the time of purchase. If it is an uncompleted property, please confirm the date of TOP or CSC (whichever is earlier) of the second residential property;
c) A copy of the contract/agreement for the purchase of the second residential property; and
d) A copy of the contract/agreement for the sale of the first residential property.
The application for the refund of ABSD must be made within 6 months after the date of sale of the first residential property.
If you need more help, you can head to the IRAS website for more details.
How will this ABSD remission help buyers?
"The temporary relief is definitely good news for everyone from individual buyers and developers. However not everyone will qualify", says Lee Sze Teck, Head of Research at Huttons Asia.
"Qualifying individual buyers now have more time to dispose of their existing properties and apply for remission. This lifts the time pressure on buyers", he continued, adding that the extension should be 12 months considering that the pandemic might last until the end of 2020.
Meanwhile, Stuart Chng, Senior Associate Executive Director of OrangeTee & Tie says that this news provides a massive sigh of relief for both buyers and developers. But he doesn’t expect a huge fall in prices or discounts for now.
"On top of the mortgage loan deferments schemes which has helped ease liquidity concerns for property owners, these additional reliefs will see price elasticity stiffen once again, with better solidarity among developers and resale property owners to maintain prices as long as they can".
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