Singapore Slaps 35% ABSD On Residential Property Transfers Into Living Trust, Closing Loophole

May 9, 2022

An additional Buyer’s Stamp Duty (ABSD) of 35 per cent will be imposed on any transfer of residential property into a living trust, where the transfer occurs from May 9. Credit: Lim Yao Hui

An Additional Buyer’s Stamp Duty (ABSD) of 35 per cent will be imposed on any transfer of residential property into a living trust, where the transfer occurs from May 9, the Ministry of Finance announced late on Sunday night (May 8).

Under current regulations, ABSD may or may not be payable upon such a transfer, depending on the profile of the beneficial owner of the residential property transferred into the trust.

Specifically, if the living trust is structured such that there is no identifiable beneficial owner at the time of transfer, ABSD does not apply. To close this gap, the government is introducing the “ABSD (Trust)” at 35 per cent, MOF said in its press release.

“ABSD aims to promote a stable and sustainable residential property market, and as such, it should apply to transfers of residential properties into all living trusts, irrespective of whether there are identifiable beneficial owners of the residential properties transferred into such trusts,” the ministry said.

The ABSD (Trust) is to be paid upfront when the transfer is made. A trustee may apply for a refund of ABSD (Trust) if certain conditions are met, namely that all beneficial owners are identifiable, that the beneficial ownership has been vested in all of them and cannot be revoked, varied or subject to subsequent conditions.

The application for the refund must be made to the Inland Revenue Authority of Singapore within 6 months after the instrument is executed.

The robust response to recent property launches may have trained a spotlight on buyers circumventing market regulations by making purchases via trusts, where they would have, until now, be exempt from ABSD.

Under some of Singapore’s Free Trade Agreements, nationals or permanent residents of the following countries are accorded the same stamp duty treatment as Singapore citizens: nationals and PRs of Iceland, Liechtenstein, Norway or Switzerland and nationals of the US.

Credit: Business Times

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