Structural nuances determine stamp duty for fractional property investments: MOF

Buyers directly acquiring residential properties usually have to pay up to 6% stamp duty.

The Ministry of Finance (MoF) said property-related investment products will be subject to stamp duty depending on “how the specific product and transaction is structured.”

“If an investor does not receive any beneficial interest or ownership of the underlying property, such as when the investment only entitles the investor to a part of the income generated by the property but not ownership of the property itself, then the investor will not be liable for stamp duty,” Finance Minister Lawrence Wong wrote in a reply to Parliament inquiries.

“Investors should consider both tax and non-tax consequences when making their investment decisions,” Wong added.

In Singapore, those directly acquiring residential properties will have to pay a Buyer’s Stamp Duty (BSD) of up to 6% and an Additional Buyer’s Stamp Duty (ABSD) of up to 65%, based on their ABSD profile. 

Meanwhile,  those acquiring shares in a Property Holding Entity (PHE) pay Share Duty and Additional Conveyance Duties (ACD), if the relevant thresholds are met for the latter. 

“ACD for acquisitions comprises BSD of up to 6% and ABSD at a flat rate of 65%,” Wong explained. 

Wong said the government will continue to monitor the property market closely and adjust policies “as necessary to promote a stable and sustainable property market.”