So, you’re eyeing a property in Singapore, huh? Maybe you’ve fallen in love with the skyline, or perhaps you’re looking to capitalize on Singapore’s strong property market. Whatever the reason, there’s one little thing that can throw a wrench into your plans: ABSD (Additional Buyer’s Stamp Duty).
As a non-Singaporean, ABSD can be a pretty hefty cost—up to 30% of your property’s value in some cases! But before you start contemplating giving up on your dream property, let me stop you right there: you don’t have to pay ABSD if you play your cards right.
In this post, we’ll walk through the best ways non-Singaporeans can legally avoid ABSD while still investing in Singaporean real estate. Trust me, it’s totally possible with a little strategy and a whole lot of clever maneuvering.
1. Buy Property in Your Company’s Name
Here’s one nifty little trick: buying property in Singapore through a company. It might sound like a corporate power move, but it’s actually one of the most common ways non-Singaporeans avoid ABSD.
When a property is purchased under a company’s name, the property is not considered to be owned by a foreign individual. Instead, it’s owned by the corporation, and ABSD is not levied on the transaction. This can be a major win, especially if you’re planning to make a real estate investment in Singapore for business purposes.
But—and here’s the catch—it’s not quite as simple as buying a property for your company. You’ll need to meet certain criteria:
- The company must be registered in Singapore.
- The property must be used for business purposes (like a company office or headquarters).
This isn’t a shortcut for every buyer, though. You’ll need to prove the company is legitimate and operational in Singapore, and the property purchase must tie into the company’s activities. So, while it’s a great way to avoid ABSD, this route is best suited for those with legitimate business operations.
2. Purchase Property Through a Singapore Citizen or PR
If you’re not keen on going down the company route, you could explore a more personal approach by partnering up with a Singapore citizen or Permanent Resident (PR). Here’s the magic formula: If you purchase a property with a Singaporean or PR, they’ll be able to buy the property without incurring ABSD. This way, you can still get in on the property action, without paying those dreaded taxes.
This strategy works best in the form of a joint ownership arrangement. You and your local partner can split the costs and responsibilities of ownership, with them taking on the primary role for ABSD exemption.
Here’s the catch though: you’ll want to set up a proper legal agreement and be sure both parties agree on things like property management, profits, and potential exits (like if one of you wants to sell). While this method can avoid ABSD, it also introduces the need for clear communication and good legal backing.
3. Buy an Approved Residential Property (For Foreigners)
If you’re a non-Singaporean resident and you’re just after a place to live (as opposed to a property for investment), there’s another potential loophole to explore: approved residential properties.
Not every residential property in Singapore is subject to ABSD. Foreigners are allowed to buy condominiums and apartments in Singapore, but there are restrictions when it comes to land-based properties (think landed houses, bungalows, etc.). The good news is that if you buy an approved residential property, you might be exempt from ABSD.
So, how do you find out if a property is approved? You’ll need to check with the Urban Redevelopment Authority (URA), as they maintain a list of properties that foreigners are allowed to purchase. If you fall into the right category of buyer, and the property is approved, you won’t have to worry about the additional tax burden.
This one’s pretty straightforward, but just remember: foreigners cannot buy landed property in Singapore unless it’s been specifically approved by the government (which is rare). So, this trick works best for foreigners eyeing high-rise condos and apartments.
4. Apply for the Right Residential Property Scheme
Singapore also offers special schemes that could help you legally bypass ABSD. These programs are designed for specific types of property buyers—such as those planning to live in Singapore long-term or those with a business presence in the country.
One such scheme is the Singapore Economic Development Board (EDB) scheme, which provides ABSD exemptions for certain individuals who are employed in key industries or contribute to the nation’s economy. So, if you’re working for a qualifying company, you might just qualify for an exemption.
Additionally, certain foreign buyers who have been granted EntrePass, Global Investor Program, or S Pass may be eligible for ABSD exemptions when purchasing residential property. These exemptions are generally available for those planning to relocate to Singapore or start a business here.
It’s definitely a more niche avenue, but if you’re coming to Singapore for work or to contribute economically, these schemes are worth exploring. Be sure to check with the authorities for any eligibility requirements.
5. Wait for ABSD Reforms or Exemptions
As with all things tax-related, policies change, and ABSD rules are no exception. While this doesn’t offer an immediate solution, waiting for reforms or new exemptions could mean you can buy property without ABSD in the future.
The government has been known to tweak property taxes and regulations, especially if they’re trying to address affordability or market conditions. For example, if you’re eyeing a new government initiative or potential policy shift that could offer relief for non-Singaporeans, sitting tight and waiting it out could end up saving you a big chunk of change.
While it’s risky to simply bank on future policy changes, keeping an eye on the government’s announcements and changes to property tax laws could allow you to make a more informed decision on your purchase timing.
The Bottom Line: Is Avoiding ABSD Worth It?
At the end of the day, there are ways for non-Singaporeans to avoid ABSD legally—if you’re willing to play the game strategically. Whether it’s by purchasing property through a company, teaming up with a local partner, or finding the right type of property, it’s absolutely possible to navigate around those nasty stamp duties.
However, each of these methods comes with its own set of complexities and risks. The company ownership method may require extensive paperwork, while the joint ownership strategy depends heavily on trust and cooperation. And of course, taking advantage of government schemes may not be possible for everyone.
So, is it worth it? If you’re committed to investing in Singapore’s property market and you have a solid understanding of your options, avoiding ABSD could definitely help you save money and expand your property portfolio. But just remember: as with all things tax-related, getting professional advice (from a lawyer or real estate advisor) is always a good idea to make sure you’re covering all your bases.
Now, go ahead and grab that property in Singapore—you just might be able to avoid the ABSD headache and make your real estate dream a reality!