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Latest Singapore Additional Buyer Stamp Duty impact on Investors and Home buyers.

Apr 2

2 min read

What is ABSD?

ABSD is a property tax imposed on buyers purchasing residential properties in Singapore. It is an additional tax on top of the Buyer’s Stamp Duty (BSD) and is aimed at curbing speculative investment and ensuring affordability for Singaporeans.

The ABSD rates vary based on the buyer’s profile and the number of properties they own. The latest rates (as of 2024) are as follows:

Buyer Profile

ABSD on 1st Property

ABSD on 2nd Property

ABSD on 3rd & Subsequent Properties

Singapore Citizens

0%

20%

30%

Singapore PRs

5%

30%

35%

Foreigners

60%

60%

60%

Entities (Companies, Trusts)

65%

65%

65%

Impact of ABSD on Different Investors/Home buyers Groups

1. Singapore Citizens (SCs)

  • First-time homebuyers are exempt from ABSD, making homeownership more affordable.

  • Those buying a second property must pay 20% ABSD, which discourages excessive property speculation.

  • Buyers of third and subsequent properties face an even higher 30% ABSD, making it costly to accumulate multiple properties.

2. Singapore Permanent Residents (PRs)

  • PRs must pay 5% ABSD even on their first home, which makes homeownership slightly more expensive than for citizens.

  • The ABSD jumps to 30% for a second property and 35% for third and subsequent properties, making it significantly harder for PRs to own multiple properties.

3. Foreigners

  • Foreigners are subject to a 60% ABSD on any residential property purchase, which is a significant financial barrier.

  • This measure limits foreign investment in Singapore’s residential market, ensuring that locals have priority access to housing.

4. Entities (Companies and Trusts)

  • Companies buying residential properties must pay 65% ABSD, except for qualifying housing developers who may apply for exemptions under certain conditions.


Why Was ABSD Introduced?

The Singapore government introduced ABSD to:

  • Control property speculation – Discourages flipping and excessive property investment that drives up prices.

  • Ensure housing affordability – Gives Singaporeans better access to property by limiting demand from investors and foreigners.

  • Stabilize the market – Prevents rapid price surges that could lead to property bubbles.


How ABSD Affects Property Investment

  1. For Local Investors: The high ABSD on second and third properties makes it less attractive to accumulate multiple properties, encouraging alternative investments such as REITs or overseas properties.

  2. For Foreign Investors: The steep 60% ABSD discourages foreign speculation, pushing them to consider commercial properties or investments in other countries.

  3. For PRs: Since PRs face ABSD even on their first property, many choose to apply for Singapore citizenship to enjoy ABSD exemption on their first home.



Conclusion

Singapore’s ABSD plays a crucial role in maintaining a stable property market by preventing excessive speculation and ensuring housing affordability. While it creates challenges for multiple-property owners and foreign investors investing in Singapore residential property while protecting local homebuyers and stabilizes long-term appreciation of property values. Understanding these rules helps buyers make informed decisions when purchasing properties in Singapore.


For the latest updates on ABSD and property regulations, always refer to the official Inland Revenue Authority of Singapore (IRAS) website.

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