Singapore introduces new stamp duty for buyers and sellers of property-holding entities

THERE will be a new stamp duty levied on the purchase and sale of equity interest in property holding entities (PHE) with effect from March 11.

Termed the Additional Conveyance Duty (ACD), it is aimed at significant owners of equities interest in PHEs that can include partnerships, trusts and companies.

This means that those entities whose residential properties in Singapore form at least 50 per cent of its total tangible assets will be captured in this new requirement.

At the same time, the current holding period of the Seller's Stamp Duty for direct sale of residential property will be shortened from four to three years.

These changes were announced by Second Minister for Finance Lawrence Wong in parliament today.

With the ACD, if a buyer who is currently a minority owner acquires interest in a PHE on or after March 11 such that his holding in the PHE is at least or more than 50 per cent, he will be levied the new stamp duty on a pro-rated basis on the equity, on top of the share duty of 0.2 per cent.

If a buyer is already a significant owner before March 11, any additional equity interest acquired by him on or after March 11 will be subject to the ACD.

The buyers' ACD includes 1-3 per cent on value of underlying residential properties, and also a flat 15 per cent on the value of these properties, irrespective of whether he is a Singaporean, permanent resident, foreigner, or non-individual entity.

For sellers who are already significant owners, if the equity interest which is disposed is acquired on or after March 11 and within three years of acquisition, a flat rate of 12 per cent will be levied.