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Does this rule applies to HDB?

This is a discussion on Does this rule applies to HDB? within the HDB, DBSS, Executive Condominium Discussion forum, part of the Home Planning Forum category; More home owners 'decoupling' property to avoid hefty duty, Singapore Property News, Singapore Property Guides & Articles - STProperty HOME ...

  1. #1
    Female Attendant
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    Feb 2010
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    Does this rule applies to HDB?

    More home owners 'decoupling' property to avoid hefty duty, Singapore Property News, Singapore Property Guides & Articles - STProperty

    HOME owners are finding ways to reduce the amount they have to pay after hefty stamp duty increases were introduced two weeks ago.

    One way is for families - say a husband and wife, or a parent and child - who bought a house together to transfer one partner's share to the other person.

    This creates a sole owner and leaves the other half of the pair free to buy another home without having to pay the additional buyer's stamp duty (ABSD), as that purchase will be seen as his first.

    The saving can be substantial. A Singaporean buying a second home will have to pay a 7 per cent ABSD, while permanent residents (PRs) pay 10 per cent.

    KhattarWong managing partner Gurbachan Singh told The Straits Times that he has seen more cases where couples "decouple" their property.

    The firm has fielded about 10 queries over the past fortnight, and is already acting in two or three decoupling cases.

    "It's no longer co-ownership or part ownership. They want to transfer everything to one party so that the other party can buy without the burden of the ABSD.

    "Although the Government says this is temporary, we dont't know when it's going to be lifted, therefore given that uncertainty... people are taking pre-emptive action," he added.

    But the transferring of a half share to one of the co-owners is still subject to the standard stamp duty rate of 3 per cent, as it is considered a transaction, Mr Singh noted.

    KhattarWong is also taking more appeals to the taxman over the revised ABSD rates.

    One aspect has to do with a will that bequeaths a property with apparent instruction for sale, so that the beneficiary receives the sale proceeds of a property rather than the property itself.

    This could entail the executor of the will selling the property and distributing the proceeds to those named in the will. No tax is payable on the distribution of sale proceeds to the beneficiary.

    If, however, instead of selling the property, the executor transfers the property to the beneficiary, the Inland Revenue Authority of Singapore's (Iras) position is that stamp duty - and in turn ABSD, if applicable - should be paid, Mr Singh said.

    Take a Singaporean who owns a private home, and is then left the proceeds of a property by his deceased parent.

    If he opts to keep this property instead of allowing it to be sold as stated in the will, he will have to stump up 10 per cent in stamp duty based on a market valuation. This includes the standard 3 per cent and the additional 7 per cent, as it is a second home.

    A PR in the same position has to pay the standard 3 per cent plus the additional 10 per cent.

    If the son then sells the inherited apartment within four years, he will also be subject to the seller's stamp duty (SSD) of up to 16 per cent.

    "We dont't think (having ABSD or SSD levied on such inheritances) is correct, we presently have two instructions to object and to appeal against (Iras') position," Mr Singh said. "If the response from Iras is not satisfactory, we may take a court ruling for it."

    Lawyers note that if the will had instructed for the physical property be handed down to the son, no stamp duty applies, thus this same rule should be applied even in these alternative cases.

    Mr Singh said the new stamp duty laws are the "most radical" since 1973, when the Residential Property Act was introduced, which prevented foreigners from buying landed homes. "If you look at the ABSD, we seem to give regard to your citizenship status, and I suppose the message is that the Government's interest is to look after Singaporeans first."

    This article should be indicating the private ones.
    Does this rule applies to HDB?

  2. #2
    Imperial Concubine
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    Apr 2010
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    Re: Does this rule applies to HDB?

    nope dont apply on HDB

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