ABSD Rates for Foreigners Buying Property in Singapore: What You Need to Know

Singapore is a highly desirable destination for property investment. With its strong economy, stable political climate, and excellent infrastructure, it’s no surprise that many foreigners are keen to buy real estate here.

However, before making a purchase, it's crucial to understand the Additional Buyer’s Stamp Duty (ABSD)—a significant cost that applies to property transactions, especially for foreign buyers.

What is ABSD?

The Additional Buyer’s Stamp Duty (ABSD) is a tax introduced by the Singapore government to regulate the property market and discourage speculative buying. It is levied on top of the standard Buyer’s Stamp Duty (BSD).

While Singapore citizens and permanent residents pay lower or no ABSD on their first property, foreigners face higher rates regardless of whether it's their first or subsequent property purchase.

Why Does ABSD Exist?

The government introduced ABSD in 2011 as part of its cooling measures to:

Keep property prices affordable for Singaporeans

Reduce speculative investment

Curb excessive demand, especially from foreign investors

The rates have been revised several times, most recently in April 2023, to reflect market trends and policy objectives.

ABSD Rates for Foreigners (As of 2023)

As of 27 April 2023, the ABSD rate for foreigners (non-citizens, non-permanent residents) buying any residential property in Singapore is:

âœ… 60% of the property price or market value, whichever is higher

Yes, that’s right. If a foreigner buys a condo worth SGD 2 million, they will need to pay an additional SGD 1.2 million in ABSD alone.

This rate is among the highest globally and reflects Singapore’s tight stance on property speculation by foreign investors.

Are There Any Exceptions?

1. Citizens and PRs from Countries with FTA Agreements

Nationals or PRs from the following countries are treated the same as Singapore citizens due to Free Trade Agreements (FTAs):

United States

Iceland

Liechtenstein

Norway

Switzerland

If you're from one of these countries, you will not pay the 60% ABSD on your first property. Instead, you'll be eligible for the same ABSD rates as Singapore citizens.

This can result in significant savings, so it's worth checking if you qualify.

ABSD for Companies and Entities

For foreign companies, trusts, or entities purchasing residential property:

The ABSD rate is 65%.

This applies whether it’s the first or subsequent purchase.

Also, if a residential property is bought under a living trust, a flat 65% ABSD is payable unless specific exemptions apply.

Examples to Understand the Impact

Let’s look at two simple examples:

Example 1: Individual Foreign Buyer

Property price: SGD 1.5 million

ABSD (60%): SGD 900,000

Total cost: SGD 2.4 million

Example 2: U.S. Citizen Buying First Property

Property price: SGD 1.5 million

ABSD: 0% (treated as Singaporean due to FTA)

Total cost: SGD 1.5 million

What Types of Properties Attract ABSD?

ABSD applies to residential properties, including:

HDB flats (foreigners generally cannot buy these)

Private condos and apartments

Landed property (foreigners need government approval for most types)

It does not apply to:

Commercial properties (e.g., shophouses, offices)

Industrial properties

So, if your goal is investment rather than residency, you might consider commercial or industrial real estate to avoid ABSD.

Can Foreigners Still Buy Property in Singapore?

Yes, but with restrictions:

HDB flats: Foreigners cannot buy resale HDB flats unless they are part of a Singaporean family nucleus.

Executive Condominiums (ECs): Only after 10 years (when fully privatized).

Private Condominiums: Yes, no restrictions.

Landed Property: Requires LDAU approval (Land Dealings Approval Unit) under the Residential Property Act.

Financing Implications of ABSD

ABSD is not included in the Loan-to-Value (LTV) ratio calculation. That means:

You cannot finance ABSD through your mortgage.

It must be paid in cash or CPF, within 14 days of signing the Sales and Purchase Agreement.

Given the size of ABSD, especially at 60%, this significantly increases the upfront capital needed.

Can You Avoid or Reduce ABSD?

Here are a few legal ways people try to manage ABSD costs:

1. Buying under an FTA nationality

If you hold a passport from an FTA-partner country, you may be exempt.

2. Purchasing through a Singapore Citizen Spouse

Some couples structure their purchase under the citizen’s name to lower ABSD exposure.

3. Corporate Structures

Some firms use companies to purchase property, but this usually results in higher ABSD (65%) and stricter tax scrutiny.

Always consult a real estate lawyer before considering such strategies.

Final Thoughts

The ABSD rates for foreigners buying property in Singapore are high by global standards, but they reflect Singapore’s goal to keep housing affordable and discourage speculative investment.

For genuine long-term investors or foreigners with family ties to Singapore, there are still options available. However, it’s vital to plan ahead, understand the full costs, and consider alternatives like commercial property if ABSD makes residential property unaffordable.