Investing in real estate is a popular wealth-building strategy in Singapore. However, the Additional Buyer’s Stamp Duty (ABSD) can be a significant financial hurdle. Discover effective methods on How to avoid ABSD, explore ways on How to buy second property in Singapore without ABSD, and gain insights on Avoiding ABSD Singapore.
Understanding ABSD
Before delving into strategies, it’s crucial to comprehend what ABSD is. ABSD is a tax imposed on property buyers, particularly those purchasing their second or subsequent properties. The rates can range significantly based on nationality and residency status.
Ways to Navigate ABSD
- Decoupling
- Buying Under Trust
- Foreigners Buying Under Their Spouse’s Name
- Relinquishing Ownership
This method involves transferring the ownership share of an existing property to one party. By doing so, the other party becomes eligible to purchase another property without incurring ABSD. Note that this approach works best for couples and joint owners.
Purchasing a property under a trust for your children can help bypass ABSD as long as the beneficiary is under 21 and doesn’t hold any other properties.
For foreign buyers married to Singapore Citizens or Permanent Residents, registering the property under the spouse’s name may help in avoiding ABSD Singapore. This method requires careful legal and financial consideration.
An individual may transfer or sell the ownership of their first property, making them eligible to purchase a second property without ABSD. However, this method involves legal and financial complexities.
Detailed Steps: Decoupling
- Consult a property lawyer to understand the legal implications.
- Calculate costs including legal fees and stamp duties.
- Proceed with the transfer of ownership through legal documentation and submission to the Singapore Land Authority.
- Once completed, the non-owner can now purchase a new property with no ABSD for a first-time buyer.
FAQs
Is it legal to avoid ABSD using these methods?
These methods are lawful but involve various legal and financial intricacies. It’s advisable to consult legal and financial advisors to understand implications thoroughly.
Can foreigners completely avoid ABSD?
For foreigners, avoiding ABSD is challenging. However, strategies such as buying under a spouse’s name can offer relief.
What is the risk of buying property under trust?
Read more about How to avoid ABSD here.
While effective, this method requires adherence to strict legal guidelines. Missteps can lead to significant financial and legal repercussions.
By understanding How to avoid ABSD and implementing these strategies, investors can make informed decisions and maximize their property investments in Singapore. Always seek professional advice to ensure compliance with all legal requirements.
