Stamp duty payable on fractional property investment depends on specific circumstances: MOF

Samuel Oh

Published Wed, Oct 4, 2023 · 07:29 PM

INVESTORS who are buying into shares of properties under fractional ownership are not liable for the Additional Buyer’s Stamp Duty (ABSD) if they do not receive any beneficial interest or ownership of the underlying property, said the Ministry of Finance (MOF) on Wednesday (Oct 4).

The ministry was responding to questions raised by Sengkang GRC MP He Ting Ru on what the ABSD treatment is for such investment vehicles, as well as whether these investors are liable for ABSD and other taxes associated with owning more than one property.

Stamp duty is a tax on documents that effect a transfer of interest in immovable property, and unlisted stocks or shares in Singapore, said Deputy Prime Minister and Finance Minister Lawrence Wong. Those who buy residential property directly in Singapore are liable to pay Buyer’s Stamp Duty (BSD) of up to 6 per cent and ABSD of up to 65 per cent, based on the buyer’s ABSD profile.

On the other hand, property buyers who acquire shares in a property holding entity pay share duty and Additional Conveyance Duties (ACD) if the relevant thresholds are met for ACD, said MOF. The ACD comprises the BSD (up to 6 per cent) and the ABSD (at a flat rate of 65 per cent).

“If an investor does not receive any beneficial interest or ownership of the underlying property, such as when the investment only entitles the investor to a part of the income generated by the property but not ownership of the property itself, then the investor will not be liable for stamp duty,” added MOF.

The ministry said the government will continue to monitor the property market and adjust the policies as “necessary” to promote a stable and sustainable property market.