Purchasing a second property in Singapore can be a daunting task, especially when trying to avoid ABSD (Additional Buyer’s Stamp Duty). This guide will dive into effective strategies for buying a second property in Singapore without ABSD, ensuring your financial endeavors are optimized.
Understanding ABSD in Singapore
ABSD is a tax imposed on top of the existing Buyer’s Stamp Duty (BSD). It was introduced to cool the property market and prevent asset inflation. Rates vary between 5% to 30%, depending on the buyer’s profile and the number of properties owned.
First Method: Decoupling
Decoupling is a popular method for avoiding ABSD in Singapore. This involves transferring ownership of the first property to one spouse, allowing the other spouse to purchase the second property without incurring ABSD. However, this process can incur legal and conveyancing costs, so it is essential to consult a professional.
Second Method: Purchase Under a Child’s Name
Another approach is to purchase the second property under your child’s name. Since the child is a first-time buyer, ABSD will not be applicable. Keep in mind, this method has its own complexities, such as future inheritance issues and the child’s financial stability.
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Third Method: Buy a Commercial Property
Commercial properties are exempt from ABSD. If the investment objective aligns, consider this alternative to avoid ABSD. Commercial properties like offices and retail spaces can offer substantial returns without the imposition of this duty.
Consequences of Avoiding ABSD Unlawfully
Attempt to circumvent ABSD unlawfully can lead to significant penalties, including hefty fines and even imprisonment. It is important to adhere to legal advice and work with certified professionals to navigate these waters safely.
Seek Professional Advice
Before making any decisions, consulting a real estate attorney or a financial advisor is crucial. Their expertise can illuminate the best route tailored to your specific circumstances, ensuring a sound approach to how to buy a second property in Singapore without ABSD.
Conclusion
Avoiding ABSD in Singapore requires strategic planning and professional guidance. From decoupling to considering commercial properties, each method has its pros and cons. Be informed, seek advice, and make the best decision for your unique financial situation.