Budget 2018 – Stamp DutyChanges to Buyer’s Stamp Duty for Residential Properties

Outline

• Changes to Buyer’s Stamp Duty (BSD) Rate Structure

• Changes in e-Stamping Portal

• Remissions for BSD and How to applya. Transitional remission

b. Residential land acquired with use restriction or for non-residential development

• Illustrations and Computation

• Online Stamp Duty Calculator

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Changes to Buyer’s Stamp Duty (BSD) Rate Structure

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BSD rates prior to 20 Feb 2018

Purchase price/ market value(whichever higher)

BSD Rates^

First $180,000 1%Next $180,000 2%Exceeding $360,000 3%

^BSD is to be rounded down to the nearest dollar

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BSD rates on or after 20 Feb 2018

Purchaseprice/market value(whichever higher)

New BSD Rates^For residential component

For non-residential component

First $180,000 1% 1%Next $180,000 2% 2%Next $640,000 3%

3%Exceeding $1,000,000

4%

^BSD is to be rounded down to the nearest dollar for each component, subject to minimum $1 per instrument

BSD Treatment

• The new BSD rates apply to documents executed on or after 20 Feb 2018 for:

a. acquisitions of residential properties

b. leases involving residential properties where there is a premium.

• Residential property is defined as:

a. For building units: one of the permitted uses is residential

b. For vacant land or entire building with land: the zoning is Residential, Residential with Commercial at First Storey, Commercial & Residential, Residential/Institutional or White.

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More detailed definition in e-Tax Guide on Buyer’s Stamp Duty on Residential and Non-Residential Properties

BSD Treatment

• In the case of a mixed-use or mixed-zoning property, the BSD rates of up to 4% and 3% apply on the residential and non-residential components respectively.

• The market value of the residential and non-residential components can be determined by a professional valuer.

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Changes in the e-Stamping Portal

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e-Stamping of Sale and Purchase Agreement (Video)

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e-Stamping of Leases with Premium (Video)

Remissions for BSD and How to Apply

Remission for Options issued on or before 19 Feb 2018

• What are the conditions?

1. The buyer is granted an Option to Purchase (OTP) on or before 19 Feb 2018

2. The OTP is exercised on or before the earlier of 12 Mar 2018 or the expiry date of thevalidity period of the OTP (without any extension of the validity period or variation tothe option on or after 20 Feb 2018)

• How do I request for remission to apply BSD rates before 20 Feb 2018?

1. Complete the application form available at IRAS website electronically

2. Submit the completed form to sd_mail@iras.gov.sg* within 14 days from the date ofexecution of the instrument

• When will I receive the stamp certificate?

1. IRAS will process your application within 14 working days from the date of submission

2. You will receive an email on the payment instructions and to download your stampcertificate after payment has been cleared

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*Temporary mailbox that will be closed on 19 Apr 2018.

Remission for Acquisition of Residential Land

• What are the scenarios for remission?

1. The residential land has use restriction i.e. part of the land must bedeveloped/used for non-residential purpose; or

2. The residential land (without use restriction) is intended for 100% non-residentialdevelopment

• How do I request for remission to apply BSD rates for non-residentialproperties?

• Write in to IRAS within 14 days from the date of acquisition with a copy of the instrument,original letter of undertaking to comply with the remission conditions and otherdocumentary evidences listed within the conditions of the e-Tax Guide on Buyer’s StampDuty on Residential and Non-Residential Properties

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Illustrations and Computation

General checklist to determine BSD rates

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� Does the acquisition involve residential property (by zoning or permitted use)?

� Is the residential property priced/valued above $1 million?

� Is the instrument executed on or after 20 Feb 2018?

� Does the instrument qualify for transitional remission?

• The Option to Purchase was issued on 10 Feb 2018. What is the BSD payable?

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(1) Condo unit acquired at $2m on 20 Feb 2018

Calculation BSD 1% on the first $180,000 1% x $180,000 $1,8002% on the next $180,000 2% x $180,000 $3,6003% on the remainder 3% x $1,640,000 $49,200Total BSD payable $54,600

For easier computation: $2m x 3% - $5,400 = $54,600

Transitional remission applies

• The Option to Purchase was issued on 26 Mar 2018. What is the BSD payable?

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(2) Residential land acquired at $10m on 2 Apr 2018

Calculation BSD 1% on the first $180,000 1% x $180,000 $1,8002% on the next $180,000 2% x $180,000 $3,6003% on the next $640,000 3% x $640,000 $19,2004% on the remainder 4% x $9,000,000 $360,000Total BSD payable $384,600

For easier computation: $10m x 4% - $15,400 = $384,600

• The residential and non-residential components were valued at $0.4m and $0.6m respectively. What is the BSD payable?

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(3) HDB shophouse acquired at $1m on 2 Apr 2018

Calculation BSDFOR THE RESIDENTIAL COMPONENT1% on the first $180,000 1% x $180,000 $1,8002% on the next $180,000 2% x $180,000 $3,6003% on the next $640,000 3% x $40,000 $1,200

Sub-total BSD for residential component $6,600

FOR THE NON-RESIDENTIAL COMPONENT1% on the first $180,000 1% x $180,000 $1,8002% on the next $180,000 2% x $180,000 $3,6003% on the remainder 3% x $240,000 $7,200

Sub-total BSD for non-residential component $12,600Total BSD payable $19,200

• The lease was signed on 2 Apr 2018. The period of lease is 4 years. What is the duty payable?

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(4) Residential unit leased at $2,400/year with premium of $1.1m

Calculation Stamp duty (i) LEASE DUTY ON THE RENTAL0.4% of 4 times the averageannual rent (“AAR”) for theperiod of the lease

AAR is $2,400

Lease duty= 0.4% x 4 x $2,400

$38

(ii) BSD ON THE PREMIUM1% on the first $180,000 1% x $100,000 $1,0002% on the next $180,000 2% x $180,000 $3,6003% on the next $640,000 3% x $640,000 $19,2004% on the remainder 4% x $100,000 $4,000

Sub-total BSD payable $28,600Total stamp duty $28,638

Online Stamp Duty Calculator

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Online Stamp Duty Calculator (Video)

Thank You

For more information, please refer to IRAS website: www.iras.gov.sg

© 2018 Inland Revenue Authority of Singapore. All rights reserved. 21

The information presented in the slides aims to provide a better general understanding of taxpayers’ tax obligations and is not intended to comprehensively address all possible tax issues that may arise. This information is correct as at 19 Feb 2018. While every effort has been made to ensure that this information is consistent with existing law and practice, should there be any changes, IRAS reserves the right to vary its position accordingly.