How to Own 2 Properties in Singapore for Couples Without ABSD
Updated: May 6
Couples always have a more advantageous position as compared to singles buying a condo in Singapore, due to the fact that there are 2 individuals and the capacity to own 2 properties in Singapore while at the same time co-sharing the costs involved.
Most couples would usually start with buying a condo together first either due to insufficient cash or CPF OA on hand, and therefore this results in the ABSD (Additional Buyer Stamp Duty) should they wish to purchase a 2nd property together.
So how then can couples own 2 properties in Singapore without ABSD? We will explore what the legally viable options are today.
But first, let us start with the basics and understand what BSD and ABSD are. There are basically 2 types of stamp duties in Singapore payable when you buy a condo in Singapore, the BSD (Buyer Stamp Duty) and the ABSD (Additional Buyer Stamp Duty).
What is Buyer Stamp Duty (BSD)?
The BSD is a tax that all buyers have to pay to IRAS when buying properties in Singapore. The BSD rates are as the table below:
Latest Buyer Stamp Duty update for properties purchased on or after 15 Feb 2023:
With the recent change on 14 Feb 2023 in Buyer’s Stamp Duty (BSD) Rates to be Raised for Higher-Value Properties, please refer to the above table for the latest Buyer Stamp Duty.
For residential properties, the first $180,000 of the purchase price will be charged a 1% tax, the next $180,000 of the purchase price will be charged a 2% tax rate, the next $640,000 will be charged a 3% tax rate, the next $500,000 4%, the next $1.5m 5%, and the remaining will be 6%.
Therefore, based on an example of $2,000,000 as the purchase price:
First $180,000 1% = $1800
Next $180,000 2% = $3600
Next $640,000 3% = $19,200
Next $500,000 4% = $20,000
Remaining $500,000 5% = $25,000
Total Purchase Price $2,000,000
Total Buyer Stamp Duty = $69,600
BSD is payable directly from your CPF OA should you be buying a new launch condo in Singapore.
But you will have to fork out cash first to pay the BSD should you be buying a resale condo in Singapore. You can then reimburse yourself from your CPF OA later on should you have used cash upfront when buying a resale condo in Singapore.
What is Additional Buyer Stamp Duty (ABSD)?
Additional Buyer Stamp Duty (ABSD) are additional taxes on top of the Buyer Stamp Duty that typically is chargeable on Singaporeans buying their 2nd property or for PRs and foreigners buying their 1st property in Singapore.
Interesting fact: Property developers are also subjected to ABSD when they buy land to build a new property. They have to now pay 40% on the total land price, in which they can get back 35% of it only if they manage to complete building and sell all the units of the project within a deadline of 5 years.
This is also why developers particularly those that are developing mega developments will tend to price their units properly to match market sentiments in order to move their stock.
There are also some rare times you would see developers throwing in huge discounts and fire sale units when the deadline is looming especially for properties that see slow demand.
So, back to the ABSD for buyers.
ABSD was first introduced in December of 2011 as a form of cooling measure to curb property speculation and ensure a stable and sustainable property market.
The introduction of ABSD would mean higher taxes payable, therefore reducing demand and tapering property prices, ensuring that property prices are kept healthy and will move in tandem with economic fundamentals in Singapore. ABSD rates were subsequently increased twice in Jan 2013 and July 2018, December 2021 and have now been raised again in 2023.
The previous Additional Buyer Stamp Duty (ABSD) for properties purchased on or after 16 Dec 2021:
The latest Additional Buyer Stamp Duty (ABSD) update for properties purchased on or after 27 April 2023:
You only need to look at this latest one for ABSD rates, for any purchases after the 27th of April 2023.
So, for Singapore Citizen couples that want to own 2 properties in Singapore, you will have to pay 20% taxes on the purchase price on top of the abovementioned BSD (Buyer Stamp Duty) for your 2nd property, and 30% on the purchase price for your 3rd and subsequent properties jointly owned together.
So, if both of you are looking to purchase a $1,000,000 property together as an investment unit, you will have to pay BSD of $24,600 and an ABSD amount of $200,000 on top of it.
PRs are also subjected to ABSD even on their 1st property, which comes up to 5% of their first property, 30% on their 2nd and 35% of ABSD for subsequent properties, on top of the Buyer Stamp Duty.
Foreigners are now subjected to an ABSD of 60% on the purchase price on top of the BSD.
But foreigners from these 5 countries will be exempted from the ABSD due to the Free Trade Agreements (FTAs) that we have with them:
- Nationals and Permanent Residents of Iceland, Liechtenstein, Norway or Switzerland as well as
- Nationals of USA
Therefore, with all these cooling measures and taxes in place, is it really possible then?
Here’s 8 ways how to own 2 properties in Singapore without ABSD:
1. Buy a condo in the capacity as an HDB essential occupier
For those that have not purchased any properties yet and are planning to buy a HDB together with your spouse, you both can actually choose to list only 1 person as an owner and the other as an essential occupier.
So, what is an essential occupier?
HDB states that an essential occupier is a family member who is required to be listed in the Application form in order to form a family nucleus and qualify under an eligibility scheme to purchase a flat.
Therefore, an essential occupier can include anyone from your spouse, your children, or your parents depending on which scheme are you purchasing under for your HDB purchase.
However, do take note that essential occupiers are not deemed as the owners of the HDB flat, meaning to say that you are not allowed to use your CPF OA on the purchase of the property, and all sales proceeds will only go back to the owner even if you have contributed cash to the property.
Secondly, as there is only 1 owner therefore only the owner is eligible to take on the loan in which this might cause the loan amount to be relatively low which might also affect the purchase price that you both intend to look at.
So then, what are the benefits of having a HDB essential occupier?
Firstly, as you or your spouse is not considered as the owner, as the essential occupier you can purchase a condo after fulfilling the 5 years MOP (Minimum Occupation Period) without having to sell off the HDB.
Also, as an essential occupier you will be able to get 75% mortgage loan on the purchase price from the banks when purchasing the condo. This way, both you and your spouse will be able to own 2 properties without ABSD.
2. Buy 1 condo each from the start
The second method is simply to buy 1 each right from the very start provided that both your CPF OA and cash, and loan amount eligible for suffices to be able to allow you both to own 1 property each.
Therefore, what I would recommend is to first run an IPA (In-Principal Approval) to check with a bank in Singapore how much mortgage loan both of you can qualify for individually.
Then add in all the cash requirements, and CPF OA to calculate your condo downpayment, monthly instalments and other expenses too such as stamp duties and condo maintenance fees etc.
For couples where one spouse is receiving a slightly higher salary than the other, can look into buying a bigger resale condo for own stay and family purposes, while the other spouse with a lower salary can look into buying a new launch condo for capital appreciation and rental yield purposes.
Click on this link to understand the benefits of investing in a new launch condo and the full list of new launch condos that we market in Singapore:
Full list of new launch condos
So, you both can have the best of both worlds and own 2 properties in Singapore without needing to pay ABSD.
3. Sell 1, buy 2 condos
For couples that already own a HDB or EC currently and have just passed their MOP (Minimum Occupation Period) of 5 years, the sale of your current property would mean freeing up of cash (provided that there is no negative sale) and your CPF OA monies returned to both of your CPF OA accounts respectively.
With this, you can then plan through your finances thoroughly with the profits of your current property, and the CPF OA & accrued interest accumulated returned back into your CPF OA accounts with the help of an experienced real estate agent in Singapore.
For those that have initially purchased a BTO or a new launch EC, you should be seeing substantial gains anywhere from S$300,000 to S$500,000 over the course of this 10 years while waiting for the property to be built plus the 5 years MOP period on top of it.
Therefore, there is a high chance that you might not even need to dig into your current cash or savings on hand to be able to upgrade to a condo. You might simply be able to upgrade from a hdb to a condo or upgrade from an ec to a condo with the cash proceeds from your current unit that you intend to sell.
So, this is definitely a good way to own 2 properties in Singapore without ABSD.
4. Buy 1 condo together first, and do decoupling later on
For first time condo buyers or HDB upgraders, if you have limited cash or CPF on your own to be able to afford a condo individually, you can always start with buying a condo together first.
Combining both your cash and CPF together will definitely allow you and your spouse to have more options and a bigger living space when it comes to buying a condo in Singapore, and it also helps to increase the loan amount that both of you will be eligible for jointly.
However, do take note that at this juncture of buying your first condo together, how you both allocate your manner of holding on this condo is very important as it sets the way for decoupling later on.
What is Manner of Holding?
The best part about buying a condo in Singapore is that you can actually dictate your manner of holding and be allowed to decouple, whereas for HDB owners you are not allowed to decouple.
We will explain the meaning of decoupling later on.
When you buy a condo in Singapore together as a couple, you can choose between two forms of co-ownership (manner of holding), namely “Joint-Tenancy” and “Tenancy-in-Common”.
What is Joint Tenancy?
Joint Tenancy means that all owners have an equal interest in the property and when 1 Joint Tenant passes away, his interest in the property automatically passes on to the other surviving Joint Tenant (rule of survivorship aka survivor takes all).
This means that you are not able to will your portion of the house to anyone else even if you pass on. A joint tenant may sever the joint tenancy and transform it into a Tenancy-in-Common whether unilaterally or by mutual agreement. Thereafter, he/she may leave his/her share in a Will.
What is Tenancy in Common?
Whereas for Tenancy-in-Common, each co-owner holds a separate & distinct share in the property and there is no right of survivorship. Therefore, each co-owner can leave his share of the property in his Will to someone else.
In Tenancy-in-Common, each co-owner can also hold the property in equal shares or unequal shares e.g., 50%-50%, 30%-70%, 90%-10% or 99%-1%.
Do take note that you can use any amount of cash or CPF on the condo even if you only have a 1% share in the property.
What is Decoupling?
So generally, couples that have plans to own a second condo in Singapore will usually opt for the manner of holding - Tenancy-in-Common on a 99%-1% share distribution on the first condo that they buy together jointly, as it allows them to sell their 1% share to the other party and free up 1 name to be able to buy another condo and avoid paying ABSD. This is what decoupling means.
So, after the 3 years Seller’s Stamp Duty timeline is up where you do not have to pay additional taxes to sell your property, should you be holding only 1% of shares on the property, you can then sell your 1% share back to your spouse at 1% of the property valuation at that point in time, whereby your spouse will only need to pay BSD on only 1% of the property value which helps you both to save on a lot more costs as compared to holding the property in a 50%-50% Tenancy-in-Common structure.
However, do take note that when you sell your shares to your spouse, you will be required to refund all the CPF OA you have used plus accrued interest accumulated over the last 3 years in cash. But you will be able to use these funds into your next property purchase.
Important Highlight - 99% & 1% might not necessarily suit everyone. In certain instances, 50%-50% might be a better idea. Or in some scenarios, 70%-30% or 60%-40%. The shareholding allocation is unique to each individual profile, and we will advise what is the most suitable on a case-to-case basis.
Decoupling legal fees will also cost about $5300 to $5500 in total to have 2 solicitors representing both buyer and seller in the Sales & Purchase agreement.
There are also some loan complications involved when it comes to decoupling. So, be sure to contact us directly if you need a 1-to-1 consultation on the process of decoupling as we will be able to advise and explain the entire process to you step b