Seller’s Stamp Duty: How Much You Have To Pay If You Sell Your Property Within 3 Years
In Singapore, sellers pay a seller’s stamp duty (SSD) when they sell their residential property within 3 years. Based on the stamp duty collected for private residential properties, a total of 562 property transactions were taxed with Seller’s Stamp Duty in 2019, a decrease from 2018 with 748 transactions. The amount of SSD collected also decreased from $86.2 million in 2018 to $22.3 million in 2019.
However, as property prices continue to rise in 2021 with the market leaning towards the seller’s favour, we may see an increase in SSD this year. Here are some things to note about SSD and how much we may have to pay if we sell our properties early.
Sellers’s Stamp Duty (SSD) Applies When We Sell Our Property Within The First 3 Years From Purchase Or Acquisition
Introduced in 2010, Seller’s Stamp Duty (SSD) is the tax payable on residential properties sold within the holding period of 3 years. The holding period for SSD starts from the date of purchase and acquisition and ends on the date of sale or disposal.
The date of purchase and acquisition could be the date of acceptance of option purchase (OTP) or date of sale and purchase agreement or date of agreement for lease (for new HDB flats). While rare, this means that HDB flats sellers could still be liable for SSD even after their Minimum Occupation Period (MOP). For example, if we made our selection of Selective En bloc Redevelopment Scheme (SERS) replacement flat in July 2016 and moved in on July 2021, our SSD holding period will only start from July 2021. This means that if we choose to sell the flat away after serving our seven years MOP in July 2023, we would still have to pay SSD since the start date of SSD is from the date of agreement for lease.
If we were to acquire a property by transfer such as inheritance or divorce, the three-year holding period would start from the date of transfer.
Sellers’s Stamp Duty Ranges From 12%, 8% And 4%, Depending On The Year Of Sale
If we wish to sell our property within three years from the date of purchase or acquisition, we need to pay 4% to 12% of the actual price or market value of the property, whichever is higher. The SSD percentage payables depend on the length of the holding period. The longer we hold out, the lesser percentage of SSD we would need to pay.
|Holding Period||SSD Rate (on the actual price or market value, whichever is higher)|
|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|
The above rates apply for property purchase after 10th March 2017. For example, if we purchased a condominium unit for $1 million on 30 June 2019, below would be the amount we would have to pay at each holding period.
|Date Of Sale||Holding Period (From 30 June 2019)||SSD Payable|
|30 Jan 2020||Up to 1 year||$1,000,000 X 12% = $120,000|
|30 Jan 2021||More than 1 year and up to 2 years||$1,000,000 X 8% = $80,000|
|30 Jan 2022||More than 2 years and up to 3 years||$1,000,000 X 4% = $40,000|
|30 Jan 2023||More than 3 years||$1,000,000 X 0% = $0|
As seen above, the stamp duty payable is considerable for the first year and this is on top of the interest payable for our home mortgage. In the event we do need to pay for SSD, payment can be done through the e-Stamping Portal on IRAS.
Scenarios When Sellers Are Exempted From SSD
Regardless, there are cases when sellers may be exempted from paying SSD. These scenarios include:
- Property owners whose property is being acquired by the government under the Land Acquisitions Act
- Property owners who are declared bankrupt and are required to liquidate their property
- Under the Residential Property Act, foreigners do not need to pay SSD
- SERS identified flat owners that sold off their flat before HDB claims the flat
- Repossession of flat by HDB due to SERS or other refund reasons
- If we inherit a HDB flat while owning one and is required by HDB to dispose of the inherited flat
- If we marry another person that owns a HDB flat while owning a HDB flat and is required by HDB to dispose of a flat
The above cases are usually due to legislative powers or existing policies. In such scenarios, the government would exempt SSD for property owners that are selling their properties.
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