Issue 11 . Sep/Oct 2024 . Homes of Realstar
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Purchasing and Owning Real Estate in Singapore – The Latest Developments
We, at Hin Tat Augustine & Partners, were recently invited to give a presentation at the Realstar Business Conference on 4th April 2023. We shared with attendees some of the latest developments in the law relating to purchasing and owning real estate in Singapore. The application of ABSD or Additional Buyer’s Stamp Duty which is the imposition of additional stamp duty on the purchase of second and subsequent real estate in Singapore as a way of cooling down the very robust property market, caught the attention of many attendees.
Is Additional Buyer’s Stamp Duty (ABSD) Remissible?
Our presentation covered topics from the latest regulatory changes relating to ABSD to possible stamp duty exemptions for non-Singaporean offspring under certain Free Trade Agreements between Iceland, Liechtenstein, Norway, Switzerland, the United States of America, and Singapore.
In particular, we touched on Section 33A of the Stamp Duties Act which gives the IRAS the power to look into the purpose or effect of any arrangement (including a trust). Where the arrangement is carried out directly or indirectly to generally avoid duty, IRAS has wide-ranging power to disregard or make adjustments to certain transactions and dispositions. These adjustments can include the amount of duty payable. Therefore, when planning around ABSD considerations, it is important to seek legal advice as to whether ABSD is remissible or not.
Buying Properties Using a Trust
Properties can be purchased through the use of trusts as a form of estate planning to provide for the future needs of a child or loved ones. For individuals with high-risk financial dealings, holding a property in trust is one way to safeguard their assets.
Trusts are unique legal structures where a trustee holds an asset in trust for beneficiaries. The interesting fact about it in relation to individuals with high-risk financial dealings is that trust assets are not held in an individual’s name, making them less vulnerable to seizure in the event of financial difficulties.
It’s worth noting, however, that no bank loan or CPF monies can be used to finance such a purchase. This makes it a suitable option for cash-rich individuals who are looking for ways to secure their child’s financial future. But such an investment can also have implications for their eligibility to purchase a HDB flat in the future. It counts towards their first property for stamp duty purposes, so it’s important to consider this when making such an investment decision.
We will be covering monthly articles relating to various aspects of the law that may be of interest to you so look out for our next article in June!
About Hin Tat Augustine & Partners
Hin Tat Augustine & Partners’ trust partner is Padang Trust Singapore Pte Ltd (“Padang Trust”), an MAS-licensed company. Padang Trust offers estate planning and professional Trustee services including the trust services covering the scenario mentioned above.
You can reach out to us at +65 94551940 (Tang Chi Loong, Real Estate) / +6596301612 (Serena Goh, Corporate) to find out in-depth information about the topics mentioned in this article. You can also find out more about our practices at http://htapartners.com.sg or http://padangtrust.com.sg.
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