Singapore: Residential property “cooling measures” | KPMG Global
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Singapore: Residential property “cooling measures” include duty (tax) items

Singapore: Residential property “cooling measures”

The Singapore government announced changes to the “cooling measures” targeted at residential properties. The changes to the seller’s stamp duty and the total debt servicing ratio, as well as a new stamp duty termed an “additional conveyance duty,” were effective 11 March 2017.


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Seller’s stamp duty

Seller’s stamp duty liability related to residential properties will now apply to disposals made within three years of purchase, reduced from a four-year holding period. In addition, the rates will be reduced to:

  • 12% if sold within one year of acquisition
  • 8% if sold within two years of acquisition
  • 4% if sold within three years of acquisition

Total debt-servicing ratio

The total debt-servicing ratio framework will no longer apply to mortgage equity withdrawal loans with a loan-to-value of 50% or below. In other words, owners who mortgage their residential properties to obtain additional cash will not be subject to the total debt-servicing ratio when the loan does not exceed 50% of the value of the property.

Additional “conveyance duty”

An additional “conveyance duty” is payable on both the purchase and the sale of equity interest by significant owners in property holding entities whose primary tangible assets are Singapore residential properties. Within the context of the additional conveyance duty, an “entity” means a company, property trust, partnership, limited partnership, or limited liability partnership.

The additional conveyance duty will apply—in addition to the existing stamp duty of 0.2%—on the shares acquired. This effectively means that the total duty payable by a significant owner on a share deal involving a residential property holding entity will exceed the total duty payable on an outright asset deal involving a residential property.

The additional conveyance duty is applicable to significant owners (greater than 50%) of residential property holding entities, regardless of whether the owner is an individual or non-individual entity, and whether the owner is a resident or citizen.

KPMG observation

The introduction of the additional conveyance duty, which removes what had been a savings in stamp duty for investing in property via holding companies, could result in further decline in the prices of residential units which are yet to be sold by developers, as bulk selling to investors is likely to decrease.

While easing of the seller’s stamp duty rates and the total debt-servicing ratio will benefit certain property owners, it is not expected that these changes will affect the residential property market significantly.


Read a March 2017 report [PDF 456 KB] prepared by the KPMG member firm in Singapore: Fine-tuning of property cooling measures

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