Why does Additional Buyer’s Stamp Duty (ABSD) continue to be misinterpreted in Singapore’s residential market, despite its role as a core transaction cost alongside Buyer’s Stamp Duty (BSD) and its straightforward computation on the higher of purchase price or market value? Like BSD, ABSD is a one-time tax paid during the property purchase process rather than a recurring cost. For homes under S$1 million, buyers often use a BSD shortcut—(3% × value) − S$5,400—to estimate BSD quickly. Market conversations often compress ABSD into a single “foreigner tax” narrative, even though total stamp duty, where applicable, is the combined BSD plus ABSD, and the rates vary sharply by buyer profile and property count.
ABSD is often reduced to a “foreigner tax,” obscuring that total stamp duty is BSD plus ABSD, varying sharply by buyer profile.
A recurring misunderstanding is the assumption that ABSD is irrelevant to Singapore citizens. Citizens pay 0% ABSD on a first residential purchase, yet face 20% on a second and 30% on a third, a schedule intended to curb excessive accumulation regardless of stated intent to sell an existing home. Upgrading scenarios consequently attract mispricing risk, because the second-property rate applies before any disposal, although a moving-house exemption mechanism exists that refunds ABSD when the original property is sold within the required timeframe.
Permanent residents and foreigners are also frequently misclassified in informal budgeting. Permanent residents incur 5% ABSD on a first property and 30% on a second, while foreigners face a flat 60% ABSD on all residential acquisitions, dispelling the notion that non-residents are exempt. A narrow exception is sometimes overlooked: Americans may qualify for 0% ABSD on a first home under the US–Singapore Free Trade Agreement, which grants national treatment for ABSD, whereas other foreign nationals do not receive this treatment.
Household structuring introduces another costly misconception, because spousal properties are effectively aggregated for ABSD counting even when titles are held in sole names. A second purchase in one spouse’s name can therefore trigger the higher rate, and “decoupling” is framed in the market either as a solution or as an illegal loophole, despite being a legal ownership restructuring that requires a completed legal transfer before a new purchase, with IRAS enforcing compliance and penalising evasion.
Underbudgeting remains the most visible consequence. A S$1 million acquisition by a foreigner implies S$600,000 ABSD alone, and a S$1.2 million purchase can total S$752,600 in stamp duty including BSD, with ABSD payable within 14 days of completion. Corporate entities face 65% ABSD, developers pay 35% plus 5% non-remittable ABSD, and rates are unchanged as of 2026 for most categories. Buyers can use CPF funds for ABSD payments under specific conditions, though this option is often overlooked in initial financial planning.
