Iras to claw back S$60 million from buyers who used ‘99-to-1’ loophole to avoid ABSD
About 0.5% of private residential properties transacted from 2018 to 2021 involved this arrangement or similar deals
THE Inland Revenue Authority of Singapore (Iras) has discovered 166 cases of private property purchases that involved tax avoidance as at April 2024, and about S$60 million in Additional Buyer’s Stamp Duty (ABSD) and surcharges will be clawed back.
On Tuesday (May 7), Deputy Prime Minister and Minister for Finance Lawrence Wong said the “99-to-1” arrangement is a tax avoidance arrangement used by some property buyers to reduce the rightful ABSD payable on the purchase of residential property.
In a written reply to a parliamentary question, Wong said: “When such property purchase arrangements are made to reduce the tax payable, the Commissioner of Stamp Duties is empowered... to disregard the individual transactions and assess them as a single joint purchase, and to recover the rightful amount of ABSD due, along with a 50 per cent surcharge.”
As at April, Iras has completed the review of 187 such 99-to-1 cases, of which 166 cases were found to have involved tax avoidance.
Wong said: “Out of the 166 cases found to have involved tax avoidance, about 10 cases with evidence of potential involvement by property agents are currently under review by the Council for Estate Agencies.”
About 0.5 per cent of private residential properties transacted in the period from 2018 to 2021 involved 99-to-1 or similar purchase arrangements, where the owners sold a partial interest in the home to another buyer within a short period of time, then Senior Minister of State for Finance Chee Hong Tat said in Parliament last year.
Depending on the severity of the breach, agents may face financial penalties or suspension of their registrations, Chee said.
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