In February 2010, the Government introduced SSD on sellers who buy (or acquire) residential properties on or after 20 February 2010 and sell (or dispose of) them within the specified holding period. SSD is applied to the sale of residential property within the holding period
The new measure was introduced to combat property ‘filliping’ where buyers acquire a property and immediately sell it off for a profit.
What is Seller’s Stamp Duty (SSD)?
SSD is a property tax that a property seller has to pay when he/she sells a property within the 3-year holding period (number of years that you own a property).
|Up to 1 year||12%|
|More than 1 year and up to 2 years||8%|
|More than 2 years and up to 3 years||4%|
|More than 3 years||No SSD payable|
The Tax is payable to the Inland Revenue Authority of Singapore (IRAS). IRAS believed widespread property flipping could increase property demand if left unmanaged, potentially contributing to a property bubble.
HDB homeowners must first fulfill the Minimum Occupation Period (MOP) of 5 years before selling their HDB flat. SSD doesn’t apply to them.
Are there any exemptions from Seller’s Stamp Duty?
Yes, the Seller’s Stamp Duty doesn’t apply in any of the below scenarios:
- Housing Developers when selling residential properties developed by them.
- Government Authorities (e.g., HDB, JTC)
- When the property is being acquired by the Government under the Land Acquisitions act.
- Property owners who are bankrupt and are forced to sell.
- If the property is owned by a company that is winding up.
Plan your exit strategy ahead
Now that you know that Tax will apply, you’ll need to plan ahead and avoid selling your property prior to the 3-year holding period or incur Seller Stamp Duty (SSD). A good exit strategy should take into account the holding period.
One strategy savvy property investors adopt focuses on buying a new project at launch and selling it upon completion. As the construction takes 3-4 years to build, SSD will not apply to the sale, and property price tends to appreciate throughout the construction period.