ABSD Rate in Singapore Increases, Foreign Buyers Must Now Pay Double

Heads up, property buyers. Singapore has recently implemented a rate hike on the Additional Buyer’s Stamp Duty (ABSD), effective April 27, to promote a sustainable property market and prioritise housing for owner-occupation.

In a press release on April 26, the Ministry of National Development (MND) said the government is raising the rates further to “pre-emptively manage investment demand.” Here is the breakdown:

The most significant increase was the rates for foreigners purchasing any residential property (from 30% to 60%) and entities or trusts purchasing any residential property (from 35% to 65%), with the latter excluding housing developers.

Meanwhile, Singapore citizens (SCs) and permanent residents (PRs) who plan to purchase their first residential property will remain at 0% and 5% respectively. According to 2022 data, they comprise 90% of residential property transactions.

As the first quarter of 2023 showed renewed interest from local and foreign investors, the government aims to moderate housing demand and provide sufficient housing supply with this hike. “If left unchecked, prices could run ahead of economic fundamentals, with the risk of a sustained increase in prices relative to incomes.”

Additional Buyer’s Stamp Duty (ABSD) was introduced in December 2011 as a property cooling measure to limit foreigners and entities from buying multiple residential properties in Singapore. From the name itself, it’s a type of tax buyers have to pay on top of their Buyer’s Stamp Duty (BSD). It depends on certain criteria, like the number of owned properties and residency status, and is computed based on the selling price or valuation of the property (whichever is higher) a buyer is planning to get.