How To Beat ABSD and Own Multiple Properties in 2022

manfred lau
8 min readDec 9, 2022


Yes, I know that to some, now may not be the best time to commit to a purchase for investment. However, a client recently reached out for assistance to help him avoid paying ABSD for a purchase that he would like to make, and I thought why not share some of the legal methods around this.

What is ABSD and is it Necessary?

The Additional Buyer’s Stamp Duty (ABSD), first introduced in 2013, was implemented by the Government as a measure to reduce speculative activities in the real estate market. Since then, investing in real estate was no longer as simple as it used to be. The aim of it was to deter owners from owning multiple properties, thereby promoting a steady growth for the residential market. The effect of this measure was met with success as the residential market became less volatile. However, to many property investors, it begets the question of whether it is necessary.

In the long-run, to keep property prices affordable to the mass majority, ABSD is necessary. Along with other cooling measures such as the Seller’s Stamp Duty (SSD), a housing bubble in Singapore is never formed. Hence, unlike the US, we can always expect housing prices in Singapore to remain stable and not crash.

Source: Inland Revenue Authority of Singapore (IRAS)

While a handful of buyers (who can afford to pay the ABSD) willingly pay for it, the hefty stamp duty gobbles up a huge chunk of your eventual returns. In this article, we share some ‘loopholes’ on how you can avoid paying the ABSD legally and own your second or subsequent property.

The ABSD is a tax applied to residential property purchases in Singapore on top of the standard Buyer’s Stamp Duty (BSD).

Both BSD and ABSD are based on a percentage of your property price or valuation, whichever is higher.

Singapore citizens pay 0 per cent on their first property, ABSD of 17 per cent on their second property, and 25 per cent on the third or subsequent property purchase.

Singapore Permanent Residents pay ABSD of 5 per cent on their first property purchase, 25% per cent on their 2nd property and 30% on all subsequent purchases.

Foreigners* pay 30 per cent ABSD on all property purchases.

Entities pay 35 per cent ABSD on all property purchases (This is relevant if you intend to buy the property through your company. Although this is seldom the preferred approach these days).

*United States citizens pay the same ABSD rates as Singapore citizens; citizens and Permanent Residents of Iceland, Lichtenstein, Norway, and Switzerland can apply for ABSD remission. This is under FTAs that are in effect at the time of writing. Foreigners should check with their respective authorities on whether their home country’s taxes will also apply on top of the ABSD.

Ways to Avoid Paying ABSD

There are a couple of ways to legally save on ABSD:

1. Buying under only 1 owner for a property so that the spouse can buy another under their own name

2. Decoupling an owner from a current property to free up one name

3. “Unofficially” buying under a child more than 21 years old

4. Buying Under A Property Trust under a child below 21 years old

1. Buying Under Only 1 Owner For A Property So That The Spouse Can Buy Another Under Their Own Name

This is probably the most straightforward and commonly practised method to own two properties.

When purchasing your first home, such as a flat or condominium, just make sure that you or your spouse are not listed as the co-owner. In the case of a HDB flat, just list them as an occupier (occupiers of a HDB flat or new Executive Condo will still need to fulfil a 5 years MOP (Minimum Occupation Period) before buying a private property.)

However, this means that only one party’s CPF can be utilised and only his/her income will be assessed for loan applications. High-earning couples who are able to finance the mortgage single-handedly may consider this method. After the 5-year MOP, the occupier can then proceed to purchase a private property without incurring ABSD (or only pay 5 per cent if they are Permanent Residents)

Take note:

For brand new executive condominiums and HDB flats, the loan repayments cannot exceed 30 per cent of the sole borrower’s gross monthly income (This is known as Mortgage Servicing Ratio).

For private properties and resale executive condominiums, the home loan — plus all existing debt obligations — cannot exceed 55 per cent of the sole borrower’s gross monthly income. (This is known as Total Debt Servicing Ratio).

There must be acceptance between all parties that, legally speaking, the sole owner is the one who holds the deed to the property; even if in reality their partner contributes as much or more to the mortgage.

For the purpose of attaining a higher loan, it is advisable for the higher income owner to be holding the property with a higher value.

2. Decoupling An Owner From A Current Property To Free Up One Name

Decoupling involves the transfer of one co-owner’s share to the other co-owner(s) so that when the exiting party buys another property, they will be considered as a first-time home buyer. Since 4 May 2016, married couples owning HDB flats cannot decouple this way.

Nonetheless, there will be ABSD incurred by the co-owner who is buying over the shares of the exiting co-owner and there is a method to reduce the ABSD incurred to a minimum. This is commonly known as the 99–1 ownership. However, 99–1 ownership must be stated upon purchase.

The immediate benefit of doing so is that both incomes can be used to support the home loan application and both parties’ CPF Ordinary Account funds can be used for the down payment and ongoing mortgage installments. Down the road, when plans to own a second property materialise, the co-owner owning 99% will buy over the 1% share and only incur stamp fees based on the 1 per cent being transferred. This amount must be paid in cash first before being reimbursed through CPF.

If it happened within 3 years, you will incur a Seller Stamp Duty (SSD) of 4–12% depending on the year of transfer. This amount can only be paid using cash.

Other fees that are usually incurred in the decoupling process include, conveyancing fees for the appointment of 2 lawyers representing each party (Yes, the law requires that one act for the seller and another act for the buyer) and possibly mortgage loan restructuring fees and penalties.

After the exercise of the sale, the exiting party can then move on to buy another private property as a first-time home buyer without incurring ABSD. You do not have to wait for the completion of the decoupling process before buying into the new property.

Take note:

The co-owner buying over the exiting party’s share must have sufficient cash/CPF to return the exiting party’s CPF used plus accrued interest and have sufficient income to take over the full loan single-handedly.

3. “Unofficially” Buying Under A Child’s Name

This is another commonly practised method by parents who have the spare cash but no spare names. It involves your child (above the age of 21) buying a private property under their name while being supported financially by you to make the down payment. Sounds easy right? You just need to have the cash for the downpayment.

However, this method may lead to complications especially when your child has plans to purchase a Build To Order (BTO) flat or Executive Condominium as they would have to dispose the private property at least 30 months ahead of their application.

Since the private property is purchased under your child’s name, it is only logical that the loan assessment would be based on your child’s income. Although there are some solutions to this, it might not be feasible if they have not entered the workforce.

Last but not least, your child is the legal owner of the property and can ‘run away’ with the property should there be family disputes. Hence, this third method should be practised with caution. While this may seem like an easy way to save on ABSD, it is important to discuss and anticipate all possible issues that may arise in the future.

4. Buying Under A Property Trust For Children Below 21 Years Old

This last method requires sufficient cash to purchase the property without a loan or CPF usage. It involves setting up a property trust for your child (below the age of 21) and buying a property with you acting as the Trustee. Your child, the beneficiary, will be the legal owner once he/she turns 21.

Since you are not the legal owner of this property, you would not be subjected to ABSD.

However, as of 9 May 2022, a 35% ABSD will be levied on all trusts arrangements. Trust arrangements which comply with the conditions of remission will be able to receive a partial or full refund of the 35% paid. This means that you must have sufficient cash to pay for the property plus the 35% ABSD first and apply for a refund within 6 months of exercising the sales & purchase agreement.

Hence, it is crucial that your conveyancing lawyer is familiar and proficient with creating ‘eligible’ trusts that qualify for a full refund. Otherwise, you might lose a significant chunk of money for no good reason.

Since the property is not yours per se, debtors are unable to seize the property in the event of a (touch wood) bankruptcy. This also means that the property, along with any rental income or sales proceeds if sold, belongs to your child but this can be easily circumvented with a joint account existing in both your names.

Okay, So Which Method is the Best?

It is cliché to say that there is no single best method but much of it depends on your financial situation, family profile and plans. If you have been considering to own a second property and want to avoid incurring the ABSD, you may want to consider the 4 solutions mentioned in this article.

If all else fails, it is not the end of the world yet as you can consider investing in commercial and industrial properties. However, commercial and industrial real estate is a whole different ball game from residential properties and requires alot more research and understanding.

Segments such as shophouses, retail fronts, F&B outlets, offices and industrial B1/B2 sites all carry different risks and returns which may not be suitable for everyone.

Nonetheless, they are only subject to GST (if the seller is GST registered) and there’s no ABSD payable on them.

I hope this article serves purposeful in helping you make a more well-informed decision, regardless of whether you’re purchasing a property for own-stay or investment. As always, feel free to share your opinion in the comment section and I will take time to address them when I can. Till next time!



manfred lau

Real Estate Agent based in Singapore sharing bite-sized content while trying to keep it light. If you’re reading my stories, I hope you enjoy them!