8 Ways to Avoid ABSD (and Why You Should Always Think Twice Before Doing It)

The Additional Buyer’s Stamp Duty (ABSD) is one of the biggest concerns about multiple property investment. Ranging from 5% to 20% for individuals, ABSD is a hefty price for fork out; so it’s not surprising that most would want to know how to avoid ABSD at all costs (pun unintended).

But it can be avoided. If you’re interested to know how, read on:


But First, What Is ABSD?

The ABSD is a tax that’s levied on top of the Buyer’s Stamp Duty (BSD) for all residential property purchases.

It was introduced in December 2011 as a ‘cooling measure’ to discourage Singaporeans, foreigners and entities from purchasing multiple properties and flipping them for profit, while helping to keep property prices affordable. Since then, the rates were adjusted twice, in 2013 and again in 2018, in line with market conditions.

ABSD is taxed according to the valuation or selling price of the property, whichever is higher. It is also based on whether the buyer is a Singaporean, Singapore Permanent Resident (PR), or foreigner. 


Who Needs to Pay ABSD and How Much Is It?

ABSD applies to the following group of buyers:

Buyer’s Profile

ABSD Payable

Singapore citizen buying first property

No ABSD charge

Singapore citizen buying second property


Singapore citizen buying third and subsequent properties


Singapore PR buying first property


Singapore PR buying second and subsequent properties


Foreigner buying any residential property


Entities (company or association) buying any property

25% (additional 5% if entity is a developer)

As you can see, ABSD is a substantial amount; a Singapore Citizen buying a second property for $1M for example, would need to pay $120,000 ABSD, and remember this doesn’t include other fees like agent’s fee, BSD, etc.

Although SPRs would need to pay ABSD when they buy a property on their own or even with another Singaporean, however, if you’re jointly purchasing a property together as a Singaporean-SPR couple, and both of you do not own any property, you can apply for ABSD remission. You can also receive ABSD remission for your second property if you’re jointly buying as a Singaporean-SPR couple, but you must sell your property within six months after buying your second property. 


How Do You ‘Avoid’ ABSD?

So, with hefty ABSD rates, it’s understandable why people would want to avoid paying for it. So how and in what ways can one avoid paying ABSD?

But before we get into that, there are also situations where you can be exempted from ABSD:

1. When You Upgrade to an Executive Condominium (EC)

When you upgrade from an HDB flat to a private property, or if you purchase another private home, you will need to pay ABSD upfront in cash or CPF (within 14 days of signing the Sales and Purchase Agreement). You can apply for an ABSD remission if you sell your first property within six months.

However, when you buy a new EC, you don’t have to pay ABSD upfront. You do need to dispose of your home within six months after collecting the keys to your EC (or once your EC receives its Temporary Occupation Permit), but at least you don’t have to fork out the huge ABSD fee at the start (you may need to pay the HDB resale levy though).

2. When You Sell Your Current Property Before Signing the Option to Purchase For The New Property

You can sell your home first before buying a new property. However, this would mean that you need to rent a place or have a temporary place to live.

3. If You’re National/PR of These Free Trade Agreement Countries

Earlier, we mentioned that foreigners will be slapped with a hefty 20% ABSD when buying a property in Singapore. However, under the respective Free Trade Agreements (FTAs), nationals or Permanent Residents of the following countries enjoy the same ABSD rates as Singaporeans:

  • Iceland
  • Liechtenstein
  • Norway
  • Switzerland
  • United States of America

In other words, they are exempted from ABSD for the first property, but will still need to pay ABSD for the second and subsequent properties.

4. Decoupling

If you jointly purchased a property as a couple, you can choose to decouple your property.

Basically, when you decouple, you transfer your share of the property to your spouse, leaving you free to purchase a new property without incurring ABSD (since it counts as your first property).

For this to work, both of you would need to be tenants-in-common or joint tenants. What this means that both of you can either have different ownership stakes in the property (e.g. 70-30, 60-40), or equal stakes. Also, know that transferring your shares isn’t free as your spouse would need to buy them from you, which means that it will incur BSD.

For example, say that you both own a 50% share of your home which is valued at $1M. You sell 50% of your share to your spouse ($500,000). In case you forgot, below is the BSD rate for residential properties:

Purchase price or market value of the property

BSD rate

First $180,000


Next $180,000


 Next $640,000


Remaining amount


So based on the above, here’s how much your spouse would need to pay:

(1% X $180,000 = $1,800) + (2% X 180,000 = $3,600) + (3% X ($500,000 – $180,000 – $180,000)= $19,200) = $9,600

Need to calculate the amount of ABSD and BSD you need to pay? Use our free calculator here!

On top of BSD, you would also need to pay Seller’s Stamp Duty (SSD) if you decouple within three years of buying the property, as well as other costs such as conveyancing fees and penalties for taking a new mortgage, which could amount to thousands of dollars. For Singapore-PR joint buyers, the PR buyer would also need to pay ABSD (5% for the first property and 15% for second or subsequent properties). For the Singaporean spouse, he/she would need to pay 12% for the second and subsequent properties.  

“If the cost of decoupling works out to be more than the cost of ABSD, then it makes more sense to pay ABSD instead”, says Grace Cheong, Senior Associate Marketing Director, PropNex Realty.

Lastly, when decoupling to buy a new property, also consider if the sole owner has the income to support the fresh mortgage. If you’re using your CPF funds, then you need to return your CPF monies (including accrued interest) back to your CPF account. If you need help, speak to our Home Loan advisors as we can help you to work out your finances.

Note: Transfer of ownership for HDB flats is only allowed under six special circumstances: marriage, divorce, death of an owner, financial complications, renunciation of citizenship and medical reasons; so HDB decoupling is trickier.

5. Buying Under One Owner’s Name

If you’re buying as a couple and both of you are first-time property owners, then you can buy under one spouse.

This allows the other spouse with the freedom and flexibility to purchase another property in the future without incurring ABSD when you both have saved enough.

The repercussion of this is that the spouse would need to carry the weight of the mortgage single-handedly, and must have enough cash and CPF funds for the downpayment and mortgage.

6. Buying Under a Child’s Name

Buying a property under a child’s name has become increasingly popular in recent years, especially among wealthy parents who want to avoid paying ABSD. At the same time, this allows them to acquire properties for their children.

Whilst this might seem like a smart way to avoid ABSD while helping to secure a private property for your child, there are of course caveats to this method; for one, if your child decides to buy a new HDB home in the future and utilise grants (e.g. BTO or EC), based on HDB rules, they would need to dispose the private property 30 months before applying for the HDB home. Your children will not be applicable for government subsidies or GST vouchers as they would be considered as property owners.

Last but not least, it may also cause legal disputes or disagreements in the future, particularly when the child reaches the legal age and has the power to decide what to do with the property (e.g. selling, renting it out). 

7. Buying a Commercial Property

Unlike residential properties, you won’t need to pay ABSD when you buy commercial properties. Besides that, commercial properties also command higher rental yields on average (5% compared to 2% to 3% for residential).

But do know that commercial properties come with their own risks; for instance, they cost more than residential properties. They also require more cash outlay and the downpayment can only be paid in cash. Additionally, there’s also a 7% GST charge which must be paid in cash.

Further read: Guide to Buying Commercial Property in Singapore

 8. Buying a Dual-Key Unit

With dual-key units, you’re essentially buying a home with two units side by side, but for the price of one. As it’s considered as one property, you avoid incurring ABSD.

The main unit and sub-unit share a common foyer, but have their own living spaces. Depending on how the unit is designed, each unit may have its own living area and common facilities such as kitchens and bathrooms.

As such, dual-key units appeal to both home buyers and investors alike because you can rent out the sub-unit and still have your own privacy.

But given the uniqueness of dual-key units, they often come with a higher price per square foot and can cost up to 25% more.


But Does Avoiding ABSD Always Save Money?

So now that you know how to avoid ABSD, should you always avoid paying ABSD when you can? Are there scenarios where paying ABSD is more sensible?

Andrew Nair, Associate Division Director, ERA Realty Network says that sometimes it’s worth paying ABSD than to avoid it, particularly when the property has a huge potential for appreciation.

“It’s all about opportunity. If you miss a good buy because you are waiting for a situation where you can save ABSD, you might miss a good deal. Saving money does not mean you make more in the long run. There are some properties that have a good rate of appreciation and a good rental yield. In that vein, ABSD can be seen as one of the ‘costs’ of business,” he says.

He adds: “For example, most will sell their HDB and buy a condo to avoid paying ABSD. But what if they had kept the HDB and paid the ABSD? They would be able to rent out the HDB and get good rental yields, in some cases more than 10% per annum.”


Tips if You Want to Upgrade or Buy a New Property

Remember, buying a property is a huge financial commitment, and it can be super tempting to buy a new property especially with the current low interest rate environment and good range of recent and upcoming new launches.

However, Grace cautions that buyers should always evaluate their finances thoroughly before proceeding to upgrade or buy a new property. “When the math is in place, it determines the availability of your options and the limitation of your property choices,” she says.

Meanwhile, Andrew’s advice is to buy a property when you’re younger and you would most likely get a bank loan with the maximum tenure.

“Use free-to-use mortgage tools to help with the bank loan assessment. Remember price is not everything. Cheaper does not mean better. Sometimes paying more for a property in a good location is better than buying a cheaper property in a not so ideal location.

“When is the best time to plant a tree? 10 years ago. But if you have not planted, when is the next best time? The time is now. This is the same with property.”


More FAQs Related on How to Avoid ABSD

1. How Can I Avoid Paying ABSD?

There are a few ways to avoid paying ABSD, namely: decoupling, buying under one owner’s name, buying under a child’s name, buying a commercial property, buying a dual-key unit, buying an EC unit, selling your current property before buying signing the OTP for the new one, and if you’re national or PR of countries under the respective FTAs.

2. How Much Is ABSD for Second Property?

For Singapore citizens it’s 12%, Singapore Permanent Residents need to pay 15%, and foreign buyers have to pay 20%.

3. Can ABSD Be Refunded?

You need to pay ABSD within 14 days of signing the Sales and Purchase Agreement and can get a refund if you bought your new property as a married couple and sell your current property within six months.


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This article was written by Victor Kang, Digital Content Specialist at PropertyGuru. When he’s not busy churning out engaging property content* or newsletter copies, he’s busy being a lover of all geeky things. Say hi at: victorkang@propertyguru.com.sg.

*I mean, I’ll try.

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