ABSD on transfers of residential properties into living trust

The 35% additional buyer’s stamp duty (ABSD) would be applied upon the transfer of residential properties into a living trust, even if there is no identifiable beneficial owner at the time.

Announced by the Ministry of Finance on May 8, the move follows a fresh round of cooling measures last December, in “(promoting) a stable and sustainable residential property market”.

While the buyer’s stamp duty (BSD) has been applicable for the transfer of a residential property into a living trust, the profile of the beneficial owner of the residential property in question determined whether the ABSD is payable at the point of the transfer. Closing the “gap” in the housing policies, the new measure would underpin the ABSD in moderating the property market.

As a concession, a trustee may apply to the Inland Revenue Authority of Singapore (IRAS) for a refund of ABSD (Trust), provided that beneficial ownership of the property has vested in every beneficial owner, all of whom are identifiable individuals, at the time the property is transferred into the trust.

Additionally, the beneficial ownership cannot be varied, revoked, or subjected to any condition subsequent, under the terms stipulated in the trust.

The refund amount will be based on the difference between the ABSD (Trust) rate of 35% and the ABSD rate corresponding to the profile of the beneficial owner with the highest applicable ABSD rate.

The application for the refund must be made within six months of the execution of the instrument.

Not sure how this policy would affect your property investment journey? At Wonder Homes, we have helped many homeowners and investors effectively navigate the property market. Drop us a message today!