[BUYING AND SELLING REAL ESTATE IN SINGAPORE]
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For Vendors A vendor may be liable for Selle r’s Stamp Duty (“SSD”) if the property is zoned as residential or industrial. (i) Residential Where a vendor had purchased the property concerned before 11 March 2017, he will be liable for SSD if he sells or disposes of the property before the expiry of four (4) years of the date of his purchase. The applicable SSD rate can go up to 16%, depending on the date on which the vendor had purchased the property and the holding period. Where the property was purchased on or after 11 March 2017, the vendor will only be liable for SSD if he sells or disposes of the property before the expiry of three (3) years from the date of his purchase. The applicable SSD rate ranges from 4% to 12%, depending on the holding period. (ii) Industrial Where a vendor had purchased the property concerned on or after 12 January 2013, he will be liable for SSD if he sells or disposes of the property before the expiry of three (3) years of the date of his purchase. The applicable SSD rate ranges from 5% to 15%, depending on the holding period. Additional Conveyance Duties (for companies owning primarily residential properties) Additional Conveyance Duties (“ACD”) was introduced on 11 March 2017 and is applicable on top of the existing stamp duty for share transfers to qualifying acquisitions or disposals of equity interests (e.g., shares or units) in property- holding entities (“PHEs”) that own primarily residential properties in Singapore effected by instruments executed on or after 11 March 2017.
An entity is considered a PHE if at least 50% of its total tangible assets comprise prescribed immovable property pursuant to the Stamp Duties Act, being primarily residential properties. A qualifying acquisition occurs when equity interest in a PHE is acquired and the buyer (together with any associates) already held 50% or more equity interest or voting power in the PHE before the acquisition, or following the acquisition, comes to hold 50% or more equity interest or voting power in the PHE. A qualifying disposal occurs when the seller (together with any associates) holds 50% or more equity interest or voting power in the PHE, the equity interest being disposed of was acquired on or after 11 March 2017 and is being disposed of within three (3) years of its acquisition on a first-in-first-out basis. Currently, the applicable ACD rate for buyers on instruments executed on or after 6 July 2018 is up to 34%, while the applicable ACD rate for sellers is 12%. ONGOING COSTS OF PROPERTY OWNERSHIP Property Tax Property tax on residential property is payable, whether owner-occupied or not, and at rates which follow a progressive scale. All other properties are taxed at 10% of the annual value of the property (i.e., the estimated gross annual rent of the property if it were to be rented out). Property tax reliefs may be available in certain scenarios such as where a residential property is being demolished and rebuilt for subsequent owner-occupation, or where a non-residential property is owned and being used by a registered charity for charitable, public religious worship or educational purposes.
ILN Real Estate Group – Buying and Selling Real Estate Series
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