Singapore introduces the Additional Buyer's Stamp Duty

On 7 December 2011, the Government announced the Additional Buyer's Stamp Duty, effective the following day: a new duty imposed on top of the existing Buyer's Stamp Duty on defined categories of residential property purchases, calculated on the higher of the purchase price or market value. The original rates: 10% for foreigners and non-individuals buying any residential property; 3% for Permanent Residents owning one residential property and buying a second or subsequent; 3% for Singapore citizens owning two and buying a third or subsequent. Citizens' first and second purchases and PRs' first purchases were not subject to the duty. The Government's stated objective was to moderate investment demand and promote a sustainable market, with foreign demand highlighted specifically: foreign purchases accounted for 19% of all private residential purchases in the second half of 2011, up from 7% in the first half of 2009. Prices at announcement stood 13% above the 2Q1996 peak and 16% above the 2Q2008 peak, and had continued rising, albeit more slowly in the two quarters before the announcement. The announcement was not demand-side alone. It paired the new duty with supply assurances: a pipeline of 41,000 unsold private units, a 1H2012 Government Land Sales programme sized to potentially yield 14,100 units, calibrated, in the release's words, with regard to the ample pipeline supply and the dampening effect of the ABSD, and an expanded Executive Condominium programme following the income-ceiling raise to $12,000. The market response: price growth slowed to near-zero around the introduction and turned marginally negative in Q1 2012, before resuming from Q2 2012. Developers sold a record 22,197 private residential units in 2012, and the private residential Property Price Index rose 2.8% over the year. Thirteen months after introduction, the January 2013 package raised every existing rate and extended the duty to PR first purchases and citizen second purchases.

An introduction event, so there is no before-and-after table. The rates from 8 December 2011: citizens not subject on a first or second residential property and 3% on a third or subsequent; Permanent Residents not subject on a first and 3% on a second or subsequent; foreigners and non-individuals 10% on any residential property. Non-individuals included corporates, trusts and collective investment schemes.

Application basis: the duty applied where the option to purchase was exercised, or the agreement for transfer executed, whichever was earlier, on or after 8 December 2011; where no option was granted and only an agreement for transfer was executed, the agreement's execution date governed. Remission was available for options granted on or before 7 December 2011 and exercised within three weeks, on or before 28 December 2011, or within the option validity period, whichever was earlier.

Joint purchases attracted the highest applicable rate on the whole purchase: a citizen buying jointly with a foreigner paid 10%, and citizens buying jointly paid 3% if any purchaser already owned two properties. A person was regarded as owning a property if they owned any part of it; overseas properties were excluded from the count. HDB purchases were unaffected, and existing residential property owners buying an HDB flat or a new DBSS or EC unit were not subject to the duty, since disposal of the existing property was already a condition of those purchases.

ABSD applied in addition to Buyer's Stamp Duty, then 1% on the first $180,000, 2% on the next $180,000 and 3% on the remainder, on the higher of price or market value. The release's annex illustrates the effect: on a $1 million purchase a citizen first-time buyer paid $24,600 in total stamp duty, while a foreigner paid $124,600.

Reliefs and remissions were given in outline, with details administered by IRAS. Relief for Singaporean-foreigner and Singaporean-PR married couples buying their homes, so the measure would not impact home-occupation demand by residents; eligibility depended on the applicable remission rules and was not an automatic exemption for every mixed-nationality couple. Remission for qualifying housing developers acquiring residential development sites, subject to statutory conditions, which mattered because entity purchases of development land otherwise fell within the 10% non-individual rate; conditions as at 2011 should not be back-projected from current remission rules. Remission for purchases within the scope of Singapore's international trade agreements: nationals of the United States, and nationals and Permanent Residents of Switzerland, Norway, Liechtenstein and Iceland, received the same treatment as Singapore citizens under free trade agreement obligations, applying to qualifying individuals, with foreign entities not generally receiving FTA-based remission. The Government subsequently reported 138 residential transactions receiving FTA-related ABSD remission between 8 December 2011 and 11 January 2013; that figure is carried here as context rather than as a claim, because the parliamentary reply it comes from has not been independently retrieved. See open item 3.