Singapore imposes Stamp Duty on various documents and transactions, contributing to government revenue and regulating specific aspects of the financial landscape. Understanding the types of duties, applicable rates, calculation methods, and exemptions is crucial for individuals and businesses engaging in relevant activities.
Types of Stamp Duty in Singapore
Singapore levies Stamp Duty on the following transactions:
- Property Transactions: Imposed on documents related to the transfer of immovable property, including sale and purchase agreements, leases, and mortgages.
- Shares and Securities: Applicable to the transfer of shares and securities in Singapore-listed companies.
- Tenancy Agreements: Levied on tenancy agreements for rental properties.
- Loan Agreements: Imposed on loan agreements and debentures.
-
Insurance Policies: Applies to certain insurance policies
Rates and Calculation Methods
Property Transactions:
There are three types of duties payable on the sale, purchase, acquisition or disposal of properties in Singapore:
- Buyer's Stamp Duty (BSD) - BSD is payable on the purchase or acquisition of properties. Prior to 20 Feb 2018, the top marginal BSD rate for both residential and non-residential properties was 3%. With effect from 20 Feb 2018, there are differentiated BSD rates between residential and non-residential properties. The top marginal BSD rate for acquisition of residential properties from 20 Feb 2018 to 14 Feb 2023 was 4%. From 15 Feb 2023, the top marginal BSD rate for residential properties is 6%, and the top marginal BSD rate for non-residential properties is 5%.
- Additional Buyer's Stamp Duty (ABSD) - applicable ion the acquisition of residential properties (including residential land) on or after 8 Dec 2011;
- Seller's Stamp Duty (SSD) - applicable on the acquisition of residential properties and industrial properties on or after 20 Feb 2010 and 12 Jan 2013 respectively. SSD is payable if the properties are sold within the holding period.
The April 2023 property cooling measures saw ABSD rates adjusted again. If the buyer is not a PR in Singapore, the rate for buying any property in Singapore doubled from 30% to 60%. This marks the third round of property cooling measures since December 2021.
Shares and Securities:
Stamp Duty on the transfer of shares is 0.2% of the higher of the consideration or market value.
Tenancy Agreements:
Stamp Duty for residential leases is calculated based on the average annual rent and the lease term.
|
Average Annual Rent (AAR)1 |
Lease Duty Rates |
|
AAR does not exceed $1,000 |
Exempted |
|
AAR exceeds $1,000 |
|
|
Lease period of 4 years or less |
0.4% of 4 times the AAR for the period of the lease |
|
Lease period of more than 4 years or for any indefinite term |
0.4% of total rent for the period of the lease |
Exemptions and Relief
Specific exemptions and relief mechanisms exist for certain transactions, such as transfers between family members, transfers due to divorce or death, and corporate restructuring.
Filing and Payment
You are required to stamp a document before you sign it. However, if you have signed a document and stamped it within the following time frame, no penalty will be charged:
- Within 14 days after signing the document if it is signed in Singapore or
- Within 30 days after receiving* the document in Singapore if the document is signed overseas
Stamp Duty is typically paid electronically through the Inland Revenue Authority of Singapore (IRAS). Late payment may result in penalties.
Conclusion
Navigating Stamp Duty in Singapore necessitates a clear understanding of the various duties, applicable rates, calculation methods, and available exemptions. As Stamp Duty regulations may evolve, seeking guidance from tax professionals and staying informed about the latest updates is crucial for effectively managing Stamp Duty responsibilities.
For personalized advice and up-to-date information, contact our tax professionals today.