Decoupling: is it worth losing right to that property just to save tax?
Just google the word 'decoupling' and you will see multiple listings from realtors and lawyers alike promoting their services to help property buyers avoid paying additional buyer's stamp duty (ABSD) with such a creative home ownership plan.
But those who have been peddling such services for years may want to hit the pause button for now so that they can study the recent High Court case which found that such transactions are not without pitfalls. Indeed, the court found that owners who decouple can run afoul of the tax law if they are not upfront with their arrangements.
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Business Times
an hour ago
- Business Times
Property stamp duty takings up 9.5% to S$6.4 billion in FY2024 after two years of declines
[SINGAPORE] Property stamp duty revenue collected in the government's financial year ended March 2025 rose 9.5 per cent to S$6.4 billion, increasing after two straight years of falling takings as transaction volume and value rose. The FY2024 total, based on revised unaudited estimates from the Accountant-General's Department, is 12 per cent higher than an earlier projection of S$5.7 billion for the period April 2024 to March 2025. It also comes close to the all-time high of S$6.76 billion collected in FY2021. The government's stamp duty takings include buyer's stamp duty (BSD) collected on all property purchases and leasing transactions, and additional buyer's stamp duty (ABSD) charged on residential property purchases by individuals and entities as well as developers' purchases of land for housing development. Data compiled by property agency Huttons for The Business Times indicate that overall property transactions rose 16.2 per cent to 59,766 units in FY2024, from 51,433 units in the previous year. The total includes private properties, executive condominiums (ECs), resale HDB flats as well as commercial and industrial units. Rental transactions, meanwhile, inched up 1.3 per cent to 166,246, from 164,124 in FY2023. Stamp duty revenue is on the rise after two years of shrinking takings. Transaction volume fell in FY2023 and FY2022 after higher ABSD rates were implemented in two rounds of market cooling measures – first in December 2021, then raised sharply in April 2023. The higher stamp duty takings in FY2024 may have been driven by robust new launch sales, said Wong Xian Yang, research head for Singapore and South-east Asia at Cushman & Wakefield. A NEWSLETTER FOR YOU Tuesday, 12 pm Property Insights Get an exclusive analysis of real estate and property news in Singapore and beyond. Sign Up Sign Up Christine Sun, chief researcher & strategist of the Realion Group, said that 8,680 new homes (excluding ECs) were sold in FY2024, a 37.1 per cent increase from the 6,329 sold in FY2023. More resale homes were also sold, with 14,929 units sold between April 2024 and March 2025, a 31 per cent increase from the year ago period. Overall, there were 24,981 private residential units sold in FY2024, a 30.4 per cent increase from 19,153 homes sold in FY2023, Lee Sze Teck, senior director of data analytics at real estate agency Huttons Asia said. 'A shift in market sentiment due to cuts in interest rates boosted sales in Q4 2024 and Q1 2025,' he added. Moreover, home prices continued to rise in 2024, and increasing transaction values would have resulted in higher stamp duties collected, Sun said. Data from the Urban Redevelopment Authority (URA) showed private home prices rose 3.9 per cent for the full year in 2024, after rising 6.8 per cent in 2023 and 8.6 per cent in 2022. Transaction values across the private residential market (including ECs) in 2024 amounted to S$54.7 billion, about 15 per cent higher than the S$47.2 billion recorded in 2023, said Chua Yang Liang, JLL's head of research and consultancy for South-east Asia. While steep hikes in ABSD rates applying to foreigners led to a plunge in foreign buying, more purchases by Singapore citizens and permanent residents (PRs) 'may have more than offset the decline in stamp duties collected from foreigners', said Huttons' Lee. Only 1 per cent of private homes (including ECs) purchased in FY2024 were bought by foreigners, down from 1.8 per cent in FY2023, Huttons data showed. PRs accounted for 13.8 per cent of the purchases were by permanent residents, a smaller share from the 15.2 per cent in the year before. 'The poor sales in the Central Business District and prime properties indicate that repeated increases in ABSD have led to structural shifts in the residential market, primarily the moderation in foreigner demand, and investment demand for properties that rely on rental yields,' said Tricia Song, CBRE's head of research for South-east Asia. However, the higher value of government land sales (GLS) transacted in FY2024 could have contributed to an increase in stamp duty collected for FY2024, she added. Developers pay an upfront non-remissable ABSD component of 5 per cent on land purchases. The value of GLS sites sold in the FY2024 period totalled around S$10.3 billion, 13.3 per cent higher than the S$9.1 billion sold in FY2023, according to CBRE Research. For the current financial year FY2025, the government has estimated that stamp duty collection will fall 7 per cent to S$5.9 billion. Stamp duty collection could be slightly lower this year, as the number of private resale transactions may fall, said Realion's Sun. She estimates that 12,000 to 14,000 resale homes could be sold in 2025, fewer than the 14,053 resale homes (excluding ECs) transacted in 2024. 'This is because fewer condos were completed over the past year, which may have resulted in fewer available units being listed for sale.' Realion anticipates that HDB resale volume may dip slightly as well, from 28,986 units in 2024 to an estimated 27,000 to 28,000 units this year. PropertyGuru's Lee noted that Singapore's economy is expected to grow at a slower pace amid evolving global uncertainties, leading to more cautious buyer sentiment. 'However, the strong take-up observed in recent new launches suggests that many buyers have begun to normalise the uncertainty and recalibrate their expectations accordingly,' added Lee. This year, the Core Central Region (CCR) will also see the largest number of units launched since 2021, said Huttons' Lee. The higher prices of prime location properties 'may pull up the overall quantum of transactions subject to stamp duties'. Property tax revenue rises Meanwhile, the government is estimated to have collected S$6.7 billion in property tax in FY2024, a 12.9 per cent increase from S$5.9 billion in FY2023. The tally is just a shade above the budgeted estimate of S$6.67 billion for the year. Property tax is charged based on the annual value (AV) of the property, which is assessed based on the estimated annual rent if the property was rented out. In January 2024, the property tax rate for owner-occupied homes with AVs in excess of S$30,000 was increased to between 6 per cent and 32 per cent. In 2023, the rates were between 5 per cent and 23 per cent. For non-owner-occupied properties, including investment properties, property tax was raised to between 12 per cent and 36 per cent in 2024 from 11 per cent to 27 per cent in 2023. The rise in property tax revenue could be attributed to the higher rates and rising valuations, said Dr Lee Nai Jia, head of real estate intelligence at PropertyGuru. The AVs of HDB flats have also been increased with effect from January 2024 to reflect a rise in market rents, said Realion's Sun. After surging 29.7 per cent in 2022 and rising another 8.7 per cent in 2023, private residential rents fell by 1.9 per cent in 2024. There were 89,355 private residential units rented in FY2024, a 6.3 per cent increase from the 84,037 units rented in FY2023, Cushman's Wong said. In the HDB market, the number of flats rented out dipped 5 per cent to 36,937 from 38,879 in the year before. Some 27,499 commercial units were leased, a slight decrease from 28,579 units before. There were 12,455 industrial units rented in FY2024, down 1.4 per cent from 12,629 in FY2023. For the current financial year (from April 2025 to March 2026), property tax collection is likely to remain stable or see a moderate increase, supported by a relatively resilient rental market that appears to have reached equilibrium, said PropertyGuru's Lee. Realion's Sun projects market rents in 2025 to rise modestly by up to 2 per cent for both the HDB and private home markets. The Ministry of Finance has set a budgeted estimate of S$6.9 billion for property tax revenue for FY2025, which is 3 per cent higher than FY2024's revised estimates. In total, the government is expected to collect S$104.7 billion in tax revenue for FY2024, 11 per cent higher than the S$94.3 billion collected in FY2023. Total tax revenue is estimated to reach S$110 billion in the current fiscal year.
Business Times
5 hours ago
- Business Times
Property stamp duty takings up 9.5% to S$6.4 billion in FY2024 after two years of decline
[SINGAPORE] Property stamp duty revenue collected in the government's financial year ended March 2025 rose 9.5 per cent to S$6.4 billion, increasing after two straight years of falling takings as transaction volume and value rose. The FY2024 total, based on revised unaudited estimates from the Accountant-General's Department, is 12 per cent higher than an earlier projection of S$5.7 billion for the period April 2024 to March 2025. It also comes close to the all-time high of S$6.76 billion collected in FY2021. The government's stamp duty takings include buyer's stamp duty (BSD) collected on all property purchases and leasing transactions, and additional buyer's stamp duty (ABSD) charged on residential property purchases by individuals and entities as well as developers' purchases of land for housing development. Data compiled by property agency Huttons for The Business Times indicate that overall property transactions rose 16.2 per cent to 59,766 units in FY2024, from 51,433 units in the previous year. The total includes private properties, executive condominiums (ECs), resale HDB flats as well as commercial and industrial units. Rental transactions, meanwhile, inched up 1.3 per cent to 166,246, from 164,124 in FY2023. Stamp duty revenue is on the rise after two years of shrinking takings. Transaction volume fell in FY2023 and FY2022 after higher ABSD rates were implemented in two rounds of market cooling measures – first in December 2021, then raised sharply in April 2023. The higher stamp duty takings in FY2024 may have been driven by robust new launch sales, said Wong Xian Yang, research head for Singapore and South-east Asia at Cushman & Wakefield. A NEWSLETTER FOR YOU Tuesday, 12 pm Property Insights Get an exclusive analysis of real estate and property news in Singapore and beyond. Sign Up Sign Up Christine Sun, chief researcher & strategist of the Realion Group, said 8,680 new homes (excluding ECs) were sold in FY2024, a 37.1 per cent increase from the 6,329 sold in FY2023. More resale homes were also sold, with 14,929 units sold between April 2024 and March 2025, a 31 per cent increase from the year ago period. Overall, there were 24,981 private residential units sold in FY2024, a 30.4 per cent increase from 19,153 homes sold in FY2023, Lee Sze Teck, senior director of data analytics at real estate agency Huttons Asia said. 'A shift in market sentiment due to cuts in interest rates boosted sales in Q4 2024 and Q1 2025,' he added. Moreover, home prices continued to rise in 2024, and increasing transaction values would have resulted in higher stamp duties collected, Sun said. Data from the Urban Redevelopment Authority (URA) showed private home prices rose 3.9 per cent for the full year in 2024, after rising 6.8 per cent in 2023 and 8.6 per cent in 2022. Transaction values across the private residential market (including ECs) in 2024 amounted to S$54.7 billion, about 15 per cent higher than the S$47.2 billion recorded in 2023, said Chua Yang Liang, JLL's head of research and consultancy for South-east Asia. While steep hikes in ABSD rates applying to foreigners led to a plunge in foreign buying, more purchases by Singapore citizens and permanent residents 'may have more than offset the decline in stamp duties collected from foreigners', said Huttons' Lee. Only 1 per cent of private homes (including ECs) purchased in FY2024 were bought by foreigners, down from 1.8 per cent in FY2023, Huttons data showed. PRs accounted for 13.8 per cent of the purchases were by permanent residents, a smaller share from the 15.2 per cent in the year before. 'The poor sales in the Central Business District and prime properties indicate that repeated increases in ABSD have led to structural shifts in the residential market, primarily the moderation in foreigner demand, and investment demand for properties that rely on rental yields,' said Tricia Song, CBRE's head of research for South-east Asia. However, the higher value of government land sales (GLS) transacted in FY2024 could have contributed to an increase in stamp duty collected for FY2024, she said. Developers pay an upfront non-remissable ABSD component of 5 per cent on land purchases. The value of GLS sites sold in the FY2024 period totalled around S$10.3 billion, 13.3 per cent higher than the S$9.1 billion sold in FY2023, according to CBRE Research. For the current financial year FY2025, the government has estimated that stamp duty collection will fall 7 per cent to S$5.9 billion. Stamp duty collection could be slightly lower this year, as the number of private resale transactions may fall, said Realion's Sun. She estimates that 12,000 to 14,000 resale homes could be sold in 2025, fewer than the 14,053 resale homes (excluding ECs) transacted in 2024. 'This is because fewer condos were completed over the past year, which may have resulted in fewer available units being listed for sale.' Realion anticipates that HDB resale volume may dip slightly as well, from 28,986 units in 2024 to an estimated 27,000 to 28,000 units this year. PropertyGuru's Lee noted that Singapore's economy is expected to grow at a slower pace amid evolving global uncertainties, leading to more cautious buyer sentiment. 'However, the strong take-up observed in recent new launches suggests that many buyers have begun to normalise the uncertainty and recalibrate their expectations accordingly,' added Lee. This year, the Core Central Region (CCR) will also see the largest number of units launched since 2021, said Huttons' Lee. The higher prices of prime location properties 'may pull up the overall quantum of transactions subject to stamp duties'. Property tax revenue rises Meanwhile, the government is estimated to have collected S$6.7 billion in property tax in FY2024, a 12.9 per cent increase from S$5.9 billion in FY2023. The tally is just a shade below the budgeted estimate of S$6.67 billion for the year. Property tax is charged based on the annual value (AV) of the property, which is assessed based on the estimated annual rent if the property was rented out. In January 2024, the property tax rate for owner-occupied homes with AVs in excess of S$30,000 was increased to between 6 per cent and 32 per cent. In 2023, the rates were between 5 per cent and 23 per cent. For non-owner-occupied properties, including investment properties, property tax was raised to between 12 per cent and 36 per cent in 2024 from 11 per cent to 27 per cent in 2023. The rise in property tax revenue could be attributed to the higher rates and rising valuations, said Dr Lee Nai Jia, head of real estate intelligence at PropertyGuru. The AVs of HDB flats have also been increased with effect from January 2024 to reflect a rise in market rents, said Realion's Sun. After surging 29.7 per cent in 2022 and rising another 8.7 per cent in 2023, private residential rents fell by 1.9 per cent in the 2024. There were 89,355 private residential units rented in FY2024, a 6.3 per cent increase from the 84,037 units rented in FY2023, Cushman's Wong said. In the HDB market, the number of flats rented out dipped 5 per cent to 36,937 from 38,879 in the year before. Some 27,499 commercial units were leased, a slight decrease from 28,579 units before. There were 12,455 industrial units rented in FY2024, down 1.4 per cent from 12,629 in FY2023. For the current financial year (from April 2025 to March 2026), property tax collection is likely to remain stable or see a moderate increase, supported by a relatively resilient rental market that appears to have reached equilibrium, said PropertyGuru's Lee. Realion's Sun projects market rents in 2025 to rise modestly by up to 2 per cent for both the HDB and private home markets. The Ministry of Finance has set a budgeted estimate of S$6.9 billion for property tax revenue for FY2025, which is 3 per cent higher than FY2024's revised estimates. In total, the government is expected to collect S$104.7 billion in tax revenue for FY2024, 11 per cent higher than the S$94.3 billion collected in FY2023. Total tax revenue is estimated to reach S$110 billion in the current fiscal year.
Straits Times
16 hours ago
- Straits Times
Decoupling: is it worth losing right to that property just to save tax?
The High Court has found that property decoupling is not without pitfalls, and owners who decouple can run afoul of the tax law if they are not upfront with their arrangements. Just google the word 'decoupling' and you will see multiple listings from realtors and lawyers alike promoting their services to help property buyers avoid paying additional buyer's stamp duty (ABSD) with such a creative home ownership plan. But those who have been peddling such services for years may want to hit the pause button for now so that they can study the recent High Court case which found that such transactions are not without pitfalls. Indeed, the court found that owners who decouple can run afoul of the tax law if they are not upfront with their arrangements.
