The price of real estate and office spaces are an important indicator of a market’s business environment. Stamp duties are the Singapore government’s means of moderating those prices and utilizing the funds so collected toward development work.
This article will tell you what stamp duties are, current Singapore stamp duty rates, how they apply to real estate buyers of commercial and residential properties, and how to pay them.
In ordinary parlance, stamp duties are taxes that the State levies on documents accompanying the transfer of legal titles to property (whether self-owned or taken on rent), shares, or stock in a company.
Although the primary purpose of a stamp duty is to raise money for government activities, they can also temper the prices of the property market.
In Singapore, these tariffs are the responsibility of the Inland Revenue Authority of Singapore (IRAS). If you’re acquiring residential commodities in Singapore, whether as a tenant, a buyer, or a seller, you would be required to pay the following 3 Singapore stamp duties.
Residential Property Legal Definition
Abuilt-up property will be considered residential if it is so designated under its Permitted Use.
Unbuilt properties and lands will be classified as residential if zoning laws for the particular area have that designation.
Some built-up properties will have both commercial and residential parts. These mixed use properties will be considered residential till such parts which are exclusively meant for living purposes only.
Buyer’s Stamp Duty
Buyer’s Stamp Duty (BSD) is the tax that the IRAS levies when property is bought and its liability falls on the person buying the property in question.
BSD Applicability
Applicable BSD rates will be levied on the greater of the following amounts:
Price as mentioned in the agreement of sale
Market value of the property during valuation
For example, if you buy a mansion that is valued by the market at $2 mn. However, you bargain and buy at just $1.8 mn. Your Buyer’s Stamp Duty rate will, in any case, be computed on $2 million, since it’s the higher of the two sums.
Further, courts will only consider those documents for verification of titles that have had stamp duties paid against them.
Modes of Payment of Stamp Duties
LocationAccepted payment modese-Stamping Portal (online)eNETS, cheque, cashier’s orderIRAS Surf Centre e-TerminalseNET, NETS, cashcardSingPost Service Bureaus (at Chinatown, Novena, Raffles Place and Shenton Way)Cash, cheque, cashier’s order, NETS
BSD and ABSD are usually large amounts and you may need to save beforehand.
It is possible to borrow money from the Central Provident Fund (CPF) for stamp duty payments. However, because you earn considerably higher interest on your CPF, it is smarter to borrow and then recover the loan from your CPF.
