IRAS Stamp Duty Slides 28 Aug 2017 Presentation to ERA · C. Selling Residential Property...

Subject HeadingSubject Heading

Understanding Stamp Duty In A Property Transaction

STAMP DUTY OUTREACH SERIES

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Subject HeadingAGENDA

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A. Overview

B. Buying Residential Property

Buyer’s Stamp Duty (BSD)

Additional Buyer’s Stamp Duty (ABSD)

C. Selling Residential Property

Seller’s Stamp Duty (SSD)

D. Common Enquiries and Mistakes Made By Salesperson

E. Examples of Stamp Duty Fraud

F. Question and Answer Session

Subject Heading

A. Overview B. Buying Residential PropertyC. Selling Residential Property

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Subject Heading(A1) OVERVIEW

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SELLING BUYING

Seller’s Stamp Duty (SSD)Buyer’s Stamp Duty (BSD)

Additional Buyer’s Stamp Duty

(ABSD)

RESIDENTIAL

PROPERTY

STAMP DUTIES ON BUYING / SELLING PROPERTIES

Subject Heading(B1) BUYING RESIDENTIAL PROPERTY

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BUYER’S STAMP DUTY (BSD) is payable on the document signed by the buyer when he purchases or acquires a property.

BSD rates (see below) are computed based on the purchase price or market value of the property, whichever is higher.

The higher of Market Value or Purchase Price

of the PropertyBSD Rates

First $180,000 1%

Next $180,000 2%

Remaining Amount 3%


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1

Individual

Entity

2 SingaporeanPermanent

ResidentForeigner

3 Count of

ADDITIONAL BUYER’S STAMP DUTY (ABSD) may be payable on top of BSD depending on the buyer’s profile:


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ABSD rates for individuals are determined based on residency status and property count:

Entity/

Subject Heading

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ABSD aims to help cool the property market. The levy is paid on top of the existing buyer’s stamp duty.

To moderate demand for

private residential propertyTo promote a more stable

and sustainable market

(B4) BUYING RESIDENTIAL PROPERTY

Subject Heading(C1) SELLING RESIDENTIAL PROPERTY:

REVISED RATES WEF 11 MAR 17

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Subject Heading(C2) SELLING RESIDENTIAL PROPERTY

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SSD aims to encourage long term holding of properties.

Encourages buyers to plan for and take into consideration their financial ability at the point of purchase

Instill financial prudence

among buyers

Encourage long-term

holding

Subject Heading

D. COMMON QUERIES BY SALESPERSON

AND

COMMON MISTAKES BY SALESPERSON

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Subject Heading(D1)

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COMMON QUERIES BY SALESPERSON

1. Rental of room in an HDB flat with Tenancy Agreement� Misconception that stamping is not required for subletting /

renting of a room in an HDB flat

2. Extension of lease period� Confusion whether stamp under ‘New Lease’ or ‘Variation of

Lease’

� The lease extension period is treated as a “new lease term”

� Regardless of extension period, as long as there is a document to effect the extension of lease, stamp duty is payable.

Subject Heading(D2)

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3. Substance over form� It is the content of the instrument rather than the label on it

that matters, eg: Lease vs License

4. Novation Agreement� Whether stamping is required and, if there is a need to inform

IRAS

� Stamping is required if consideration is involved

Subject Heading(D3)

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5. Early termination of lease� Misconception that stamp duty can be refunded for the

remaining period of lease

� No refund of stamp duty if :� The lease period has commenced� The executed Tenancy Agreement (TA) has been made

use of for any purpose, such as forfeiture of security deposit

� The Lessee/Tenant has aborted the TA with a view to allow the Lessor/Landlord to lease the property to another person

� The application of the remission has lapsed (which is more than 6 months from the date the TA is aborted

Refund application is to be submitted electronically and the refund will be made to the party liable, that is, the tenant.


Subject Heading(D4)

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6. Treatment of mixed use zoning� HDB shop with living quarters fall under the definition of

“Residential Properties”

� ABSD or SSD is chargeable on the residential componentonly

� Permitted use for the 2nd storey living quarters is residential (permanent use). If there is a change of use to other uses, to verify if the use is granted on permanent basis

� HDB shop with living quarters should be included in the count of residential property owned and chargeable with ABSD

� If the HDB shop with living quarters is sold within the SSD holding period, SSD is chargeable


Subject Heading(D5)

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7. ABSD Spouses remission� ABSD remission applies to co-purchase of residential

property by married couples involving at least one SingaporeCitizen (SC)

� In line with the Government’s pro-family policy to supportSingaporeans to get married and start their families

� From 12 Jan 2013, a married couple with an SC spouse iseligible for ABSD refund on their joint purchase of theirsecond property if they sell their first property within 6 monthsof the date of purchase of the second property (completed) or

date of TOP/CSC (uncompleted), whichever is applicable.


Subject Heading(D6)

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8. ABSD Spouses remission (Cont’d)� ABSD remission does not apply to purchases of third or more

properties

� ABSD remission does not apply to SPR household

� Date of purchase is the date of Acceptance to Option ToPurchase / Sale and Purchase Agreement, not Date of SaleCompletion


Subject Heading(D7)

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9. Purchases by Singapore Permanent Residents (SPR)/

Foreigners (FR)� SPR/ FR purchaser(s) will be subject to ABSD if they have not

obtained their Singapore Citizenship/ Singapore PermanentResidency status respectively at the point of purchase.


Subject Heading(D8)

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10. Minimum Occupation Period (MOP) ≠ Seller’s Stamp Duty (SSD)

holding period� Generally, HDB imposes an MOP of 5 years. However, MOP

varies under different schemes/ types of flats (e.g. Flats purchased under Selective En-bloc Redevelopment Scheme (SERS), 1-room flat)

� Waiver of MOP by HDB does not constitute to a waiver of SSD

� SSD is still payable even if HDB permits the sale within the MOP.


Subject Heading(D9)

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1. Stamp Certificate Amendment

� Self-help Amendment� To rectify typo error � Registered users (RU) and Non-registered users (NRU-

SingPass users) are allowed to amend up to 1 field except Date of Document

� Assistance Required Amendment (more than 1 field)� You can submit amendment request through our e-

stamping system (https://estamping.iras.gov.sg)� Takes 3 working days to process� RU (real estate agency firms, law firms etc) can print

from their system for the revised stamp certificate� NRUs who have provided their email addresses will

have the stamp certificates sent out to them.


Subject Heading(D10)

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2. Stamping of Tenancy Agreement� Error in property address (Eg. Blk number and postal code do

not match)

� Misconception that the lease start and end dates can beamended where lease term remains the same - additionalstamp duty is payable

� Mistaken that stamping has to be done within 14 days from thecommencement date instead of the signing date of thedocument


Subject Heading(D11)

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3. Occupier to be included as tenant� Request for stamp certificate amendment to include occupier as

tenant for other organisation’s verification purposes (to showevidence that the party did rent a place) Eg. MOM, Bank, etc.

� No amendment will be made as only main tenants’ names will bereflected on the stamp certificate.


Subject Heading

E. EXAMPLES OF STAMP DUTY FRAUD

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Subject Heading(E1) INTRODUCTION

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The Verifications

Compliance checks

Our Approach

Provide self-assessment facility

Our Belief

Taxpayers are generally compliant

Subject Heading(E2) INTRODUCTION

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• Penalties – Unstamped or Insufficiently Stamped Instrument

• Offences – Evasion of Duty

• A fine not exceeding $10,000 or imprisonment for a term notexceeding 3 years or both

Subject Heading(E3) TAX FRAUD

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• IRAS takes a serious view on any individual or business that deliberately forges stamp certificates and knowingly misrepresents counterfeit “certificates” as genuine.

• To-date since 2010, IRAS had prosecuted eight people who forged or used counterfeit stamp certificates.

• The latest case pertained to a former paralegal who was convicted in February 2016 for forging and using counterfeit stamp certificates for property transactions.

Subject Heading(E4) ONLINE VERIFICATION OF STAMP CERTIFICATE

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• If you are acting for a landlord, you should assist your client to check ifdocument has been duly stamped by the tenant.

• If event of legal disputes, documents must be duly stamped to beadmissible in court as evidence.

• How to check ?

• Request for a copy of stamp certificate from the tenant.

• Login to e-stamping website.

• Under Quick Links tab, select “Check stamp certificate authenticity”


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• Under the “Check Stamp Certificate Authenticity”, key in the DocumentReference Number and the Stamp Certificate Reference and click“Submit”

• Under the “Stamp Certificate Authenticity”, click the “Stamp Cert Detailslink


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• Details of the stamp certificate, property / stock and shares and stampduty charges will be displayed

• Check the details with that on the stamp certificate


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• Please email us if –

• The information displayed on screen is different from what is printed on the

stamp certificate;

• The system displays a message that the Document Reference Number or the

Stamp Certificate does not exist.

• More information on verifying stamp certificates can be found at the IRASwebsite

Subject Heading(F1) Question and Answer Session (Q & A)

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Any questions ?

© 2017 Inland Revenue Authority of Singapore. All rights reserved.

Thank You

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 DDMMYYYY. 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.

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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 25 Aug 2017. 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.

IRAS Stamp Duty Slides 28 Aug 2017 Presentation to ERA · C. Selling Residential Property...

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