“99-to-1” ABSD Loophole: IRAS Investigating

Buyers who have existing properties must pay the full ABSD sum now when they buy properties with first-time owners.

This is where the “99-to-1” loophole comes in, as it is usually used by an existing home owner who wants to buy another property without having to pay ABSD.

Another way to describe such deals is also called “100-sell-1”

This loophole involves asking a friend or family member who doesn’t own a residential property to front the purchase of your new home. This person then sells a 1% share of the property to you, allowing you to avoid paying ABSD on the remaining 99%.

For example, Buyer 1 wants to save on ABSD.

Buyer 1 first asks Buyer 2 to exercise the sales option as the sole buyer for the new home. As Buyer 2 is a first-time buyer, no ABSD would be payable. But because the Buyer 2 cannot finance the mortgage by himself, Buyer 1 needs to come on board as a co-owner.

This is done by Buyer 2 “selling” a 1 per cent share of the unit to Buyer 1 shortly after.

So even if Buyer 1 has existing properties, he pays ABSD only on the 1 per cent share.

Calculations for example

ABSD payable for a Singapore Citizen WITHOUT 99-to-1 scheme for a 2 million property as a SECOND PROPERTY:

2 million X 17% = $340,000

ABSD payable for a Singapore Citizen WITH 99-to-1 scheme for a 2 million property as a SECOND PROPERTY:

2 million X 1% = $20,000
$20,000 X 17% = $3400

While this may seem like a great way to save money, it’s important to note that the Inland Revenue Authority of Singapore (IRAS) is investigating such deals and may impose severe penalties on those who attempt to evade ABSD. In some cases, the penalty may be up to 400% of the ABSD avoided, which could be more than the value of the property itself.

This means that you may have to pay five times the ABSD avoid-ed. Even at the 17 per cent rate, your total penalty will be almost equivalent to the value of the property.

It’s also worth noting that new schemes specifically designed to avoid ABSD may result in a surcharge of 50% on top of the duties owed

Only first-time buyers can own homes in share ratio of 99 to 1.

Those who just want to purchase their first homes to live in have nothing to worry about even though they may choose to hold the assets in unequal shares.

The additional buyer’s stamp duty (ABSD) does not apply to first-time buyers and so they can choose to hold their property in any manner.

Some married Singapore couples who are first-time buyers choose to buy in this manner to prepare for a possible “decoupling” later.

The term “decoupling” refers to a popular move by couples wanting to avoid paying ABSD for a second purchase, by allowing one spouse to take total ownership of the existing property so that the other spouse is free to buy another as a first-time buyer.

In such cases, the spouse who owns the 99 per cent stake will “buy” the remaining 1 per cent share. The usual stamp duty for a property transaction is payable but it will be nominal due to the small value of the share.

Such transactions are above board because owners are entitled to give up their previous properties.

While you may be able to pick up another property without paying the ABSD, there are other financial pitfalls which you should be aware of before you embark on such a scheme


In conclusion, it’s important to understand the potential consequences of utilizing a “99-to-1” loophole to avoid ABSD when purchasing a new property in Singapore. While it may seem like a quick and easy way to save money, the Inland Revenue Authority of Singapore is cracking down on such transactions and may levy heavy penalties and surcharges on those who use these schemes.

If you’re looking to purchase a new property in Singapore, we can guide you through the process and help you make informed decisions. We will also advise you on any potential legal and financial issues that may arise and help you avoid costly mistakes.

So don’t let the fear of ABSD prevent you from achieving your real estate goals. With careful planning and the right guidance, you can find the perfect property in Singapore without breaking the bank.

Wondering if it’s the right time to buy, sell, or wait it out?

These decisions can be tough, and there isn’t a one-size-fits-all answer.

But don’t worry, that’s where we come in!

At Let’s Talk Property, we are here to provide clarity to you and guide you step-by-step in your real estate journey!

Whether you’re a first-time buyer or a seasoned investor, we hope to partner with you to create a clear plan that’s tailored to your unique needs and provide objective guidance to help you make the best real estate decision.

So, if you’re looking to buy, sell, or just want to chat about your real estate options, we’re here for you!

With our extensive on-the-ground experience, you can trust us to provide a top-notch real estate experience that’s both informative and stress-free.

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Best Regards,
Let’s Talk Property
Dillon @ 9389 1992

P.S. HDB Owners, with so much UNCERTAINTY, Should you BUY, SELL or WAIT?
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