Wondering how to avoid ABSD when buying 2nd property in Singapore? If so, you have come to the right place.
The introduction of Additional Buyer’s Stamp Duty (ABSD) in Singapore’s real estate market has changed the way people own and invest in properties. Back in the day, investors had it easy as they could use the rental income from one property to buy another. However, things have changed now.
The ABSD tax makes it difficult for smartest investors to keep buying more properties without careful planning. If you are looking for ways to avoid ABSD legally, we have some suggestions for you.
- Buy An Executive Condominium
Buying a new property can be tricky if you already own one. The ABSD makes it tough because it demands a high tax payment when you purchase a second property.
So, how to avoid ABSD? Well, if you sell your current property within six months of buying the new one, you can apply for a refund. But this means you need a lot of extra cash on hand, even if you didn’t plan for it. The good thing is that you don’t need to pay ABSD when buying an Executive Condominium (EC). However, you will still need to sell your current property within six months.
- Invest Under A Trust
For those wondering, how to avoid ABSD, you should consider investing under a trust for your children. By doing so, you can avoid paying ABSD. It indicates that the property belongs to your children, not you. But make sure to consult a good lawyer as things can get complicated.
For instance, once your children own the property under the trust, they can’t apply for a public housing flat (HDB). Also, they will need to pay ABSD if they buy any more properties in the future. Additionally, you can’t get a bank loan for a property under a trust, meaning you have to pay for it in cash.
Avoiding ABSD Singapore is tricky and requires careful planning and consideration. Before making a decision, you must consult a lawyer or someone who has good experience with ABSD.
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