In Singapore, stamp duty is an important tax that is closely related to various fields, including real estate transactions, stock trading, and the signing of commercial contracts. This article will focus on the stamp duty in the real estate sector to help you avoid unnecessary troubles.

What is Stamp Duty?

Stamp duty is a tax levied on the act of creating, receiving, and accepting legally binding instruments in economic activities and exchanges. In Singapore, whether it is renting or buying/selling a property, stamp duty needs to be paid.

Renting a Property

If the lease term is equal to or less than 4 years, the rental stamp duty is 0.4% of the total rent within the entire lease term of the contract, and it is generally borne by the tenant.

Buying a Property

1、BSD - Buyer's Stamp Duty

BSD is the basic tax that must be paid when buying a property in Singapore. Regardless of the buyer’s profile or the number of residential properties owned, it must be paid, and the amount is solely affected by the value of the property itself.

Calculation Method: The stamp duty is calculated based on the higher of the property price (as stated in the signed sale and purchase agreement) and the market value (as stated in the property valuation report), using a progressive tax rate. The total stamp duty payable is the sum of the taxes for each applicable bracket.

2、ABSD - Additional Buyer's Stamp Duty

Whether ABSD needs to be paid and the amount of payment are affected by factors such as the buyer’s profile and the number of residential properties owned by the buyer. The details are as follows in the table.

Selling a Property

SSD - Seller's Stamp Duty for Residential Property
SSD is payable on all residential properties and residential lands that are acquired on or after 20 February 2010 and disposed of within the holding period.

Generally speaking, if a property is sold after being held for more than 3 years, the seller does not need to pay the seller's stamp duty. This is a way for the government to encourage long-term real estate investment and stabilize the real estate supply.

How to Pay Stamp Duty?

The traditional way of paying stamp duty requires manually affixing physical stamps to the documents. E-Stamp is a modern way of paying stamp duty, which generates and records stamp duty certificates through an electronic system, replacing traditional paper-based stamps.

You can easily e-stamp your documents in any of the following ways:
■e-Stamping portal
■Service Bureaus (designated Singapore Post offices)
■E - terminals at the Inland Revenue Authority of Singapore's Taxpayer and Business(TBSC).

How to Pay the Stamp Duty Tax?

Stamp duty can be paid in the following ways:
■e - Nets (through the e - stamping portal);
■Cheque (payment slips and cheques at cheque collection boxes or service bureaus);
■Nets (at the Inland Revenue Authority of Singapore's Taxpayer and Business Service);
■CashCard (at the Inland Revenue Authority of Singapore's Taxpayer and Business Service);
■Cashier’s  Order (service bureaus);
■Internet bank transfer.

When to Pay Stamp Duty?

Generally, you need to e-stamp the document before signing it. However, if you sign and e-stamp the document within the following time limits, you will not be fined:
■If the document is signed in Singapore, within 14 days after signing;
■If the document is signed overseas, within 30 days after it is received in Singapore.

What Happens if Stamp Duty is Paid Late?

If your e - stamping is past the deadline but before the audit inspection by the Inland Revenue Authority of Singapore:
■For documents stamped within 3 months after the due date, the penalty will be the higher of a minimum of S$10 or the amount of the stamp duty payable.
■For documents stamped more than 3 months after the due date, the penalty will be the higher of a minimum of S$25 or 4 times the stamp duty payable.

Note: For more details about stamp duty, you can view the electronic version of the Stamp Duties Act on the Singapore Statutes Online website.