Taxes have always been something that everyone in the world has to deal with. In Singapore, taxes are unavoidable in various aspects, and there are specific ones for the transactions of properties as well. One major and common tax is the Seller’s Stamp Duty (SSD), and due to its prominence, we will provide a coverage of what it entails in this article.
However, firstly, it is essential to to be clear about the definition of ‘stamp duty’ – a term commonly used for property transactions in Singapore. It basically means tax levied on documents relating to properties, stocks or shares, and is payable just like any other taxes, to the Inland Revenue Authority of Singapore (IRAS).
In terms of property transactions, there are 3 notable stamp duties: the BSD (Buyer’s Stamp Duty), SSD (Seller’s Stamp Duty), and ABSD (Additional Buyer’s Stamp Duty). Nevertheless, as mentioned earlier, the focus will be on SSD.
SSD can be defined as taxes payable on all residential properties levied on the selling price or valuation, whichever is higher, of the property when a seller sells it within the ‘minimum holding period’ to deter property flipping.
‘Minimum holding period’, applies only if the property in concern was purchased on or after 20 Feb 2010. Nevertheless, looking at time frames, the rates payable are as follows:
| Date of Purchase or Date of Change of Zoning / Use | Holding Period | SSD rate payable |
| Between 20 Feb 2010 and 29 Aug 2010 (all inclusive) | Up to 1 year | 1% on first $180,000 |
| 2% on next $180,000 | ||
| 3% on remainder | ||
| More than 1 year | No SSD payable | |
| Between 30 Aug 2010 and 13 Jan 2011 (all inclusive) | Up to 1 year | 1% on first $180,000 |
| 2% on next $180,000 | ||
| 3% on remainder | ||
| More than 1 year and up to 2 years | 0.67% on first $180,000 | |
| 1.33% on next $180,000 | ||
| 2% on remainder | ||
| More than 2 years and up to 3 years | 0.33% on first $180,000 | |
| 0.67% on next $180,000 | ||
| 1% on remainder | ||
| More than 3 years | No SSD payable | |
| Between 14 Jan 2010 and 10 Mar 2017 (all inclusive) | Up to 1 year | 16% |
| More than 1 year and up to 2 years | 12% | |
| More than 2 years and up to 3 years | 8% | |
| More than 3 years and up to 4 years | 4% | |
| More than 4 years | No SSD payable | |
| On and after 11 Mar 2017 (all inclusive) | Up to 1 year | 12% |
| More than 1 year and up to 2 years | 8% | |
| More than 2 years and up to 3 years | 4% | |
| More than 3 years | No SSD payable |
Keeping in mind the aforementioned rates, the total payable SSD is computed by applying the requisite SSD rate on the selling price or the current market value of the property as of the date of sale, whichever is higher.
Also, in the event that the sale comprises only a partial interest in the residential property (which means that you own a portion of the property only) , the payable SSD will also be based on the selling price or market value of the partial interest, whichever is higher. However, in order to provide you with a simple scenario of the calculations, an example would be as follows:
If John acquired his residential property on 25 February 2011 and sells it away on 11 January 2012 for $1,500,000, it is important to note that:
- It was sold between the period of 14 Jan 2010 and 10 Mar 2017
- The holding period is less than 1 year
As such, based on these 2 aforesaid factors, the SSD payable is 16%.
Henceforth, SSD payable = $1,500,000 x 16% = $240,000.
In computing the SSD, as you can see, you always have to take into consideration two main factors, which are the period of transaction and the holding period. From then on, identifying the percentage payable is relatively straightforward and easy to do!
Exemptions from SSD
Nevertheless, there are instances where there are exemptions for SSD payable. Sellers of residential properties are exempted under the following scenarios:
- Licensed housing developers who are governed under the Housing Developers (Control and Licensing) Act when selling residential properties developed by them.
- Public authorities (such as HDB or JTC) in exercising their functions and duties when selling residential properties,
- Residential property owners when their properties are acquired by the Government under the Land Acquisitions Act.
- Residential property owners when selling their residential properties due to bankruptcy or involuntary winding up.
- Foreigners when they have to sell their residential properties as required under the Residential Properties Act.
- HDB flat sellers or transferors who bought or acquired their flats on or after 30 Aug 2010 and their flats have been identified for Selective Enbloc Redevelopment Scheme (SERS) but sell their flats in the open market prior to HDB claiming them.
- HDB flat sellers or transferors who return their flats to HDB as a result of re-possession by HDB or under the SERS.
Overall, we hope we have given you a brief yet useful overview of what SSD is and how it works. Further elaborations and explanations are also given for other payable stamp duties such as ABSD and BSD on Redbrick’s blog. On that note, should you have any lingering enquiries or doubts that you wish to clarify, or need advice on mortgage financing issues, it is recommended that you contact an established mortgage advisory company such as Redbrick to assist you.
