Understanding How to avoid ABSD is crucial for property investors looking to maximize their returns in Singapore’s competitive real estate market. The Additional Buyer’s Stamp Duty (ABSD) is a hefty fee imposed to curb speculation and manage the housing market supply. However, there are ways to legally navigate this rule. This guide will explore strategies on how to buy second property in Singapore without ABSD and provide tips for avoiding ABSD Singapore.
What is ABSD?
The Additional Buyer’s Stamp Duty (ABSD) is a tax levied on property buyers in Singapore, in addition to the regular Buyer’s Stamp Duty (BSD). The rates vary based on the buyer’s residency status and the number of properties owned.
How to Avoid ABSD
There are several methods to consider:
1. Decoupling
This involves transferring ownership of an existing property solely to one spouse. This allows the other spouse to purchase a new property as a first-time buyer, thereby avoiding ABSD. Here’s how it works:
Read more about Avoiding ABSD Singapore here.
- Transfer the ownership of the first property fully to one spouse.
- The second spouse then buys the new property as a first-time purchaser.
2. Purchasing Under a Child’s Name
Another strategy is to purchase a property under the name of a child who is over 21 years old. This transaction is treated as the child’s first property purchase, thereby avoiding ABSD.
3. Buy Commercial Properties
Commercial properties, such as offices, retail spaces, and industrial buildings, are not subject to ABSD. This can be a viable alternative to purchasing additional residential properties.
How to Buy Second Property in Singapore Without ABSD
We have outlined some steps to follow:
- Understand the Regulations: Fully comprehend the legalities and tax implications before making a purchase.
- Explore Financing Options: Look into various mortgage solutions that can accommodate your financial status.
- Work with Experienced Agents: Engage property agents who are well-versed in Singapore’s property market and ABSD-related matters.
FAQs on Avoiding ABSD Singapore
Q1. Is ABSD applicable to all buyers?
A: No, ABSD rates depend on the buyer’s residency status and the number of properties owned.
Q2. Can foreigners avoid ABSD?
A: Generally, foreigners are subjected to the highest ABSD rates unless they are nationals from countries with free trade agreements with Singapore.
Q3. Is decoupling a legally approved method?
A: Yes, decoupling is a legal method to avoid ABSD, but it involves various legal and financial considerations, including legal fees and refinancing costs.
Understanding How to avoid ABSD, How to buy second property in Singapore without ABSD, and the various techniques for avoiding ABSD Singapore can significantly benefit property investors. By employing strategies such as decoupling, purchasing under a child’s name, or venturing into commercial properties, savvy investors can navigate the property market efficiently without incurring unnecessary costs.
