SINGAPORE: The top marginal Buyer’s Stamp Duty (BSD) rate for residential properties will be raised from 3 to 4 per cent, announced Finance Minister Heng Swee Keat on Monday (Feb 19).
In his Budget speech, he said the new top marginal rate of 4 per cent will apply to the portion of residential property value which is in excess of S$1 million. The revised BSD rates will apply to all residential properties acquired from Feb 20, 2018.
BSD is tax paid on documents signed when acquiring property located in Singapore. Mr Heng said that currently, BSD rates for residential properties range between 1 and 3 per cent, and have remained unchanged since 1996.
The announcement is part of changes introduced to make Singapore’s tax system more progressive, fair and resilient. Mr Heng explained that one common suggestion is to tax the rich and higher-income more, or introduce wealth taxes like a capital gains tax. “This reflects a desire for a progressive system, with those with more contributing back to society,” he said.
“This is far, and it’s precisely what we’ve done over the years,” he added, explaining that personal income tax rates for top income brackets were increased in 2015, and a cap on personal income tax reliefs imposed in 2016.
“Moving forward, we will continue to study options to ensure that our tax system remains progressive.”
In cases where an Option to Purchase (OTP) has been granted to potential buyers on or before Feb 19, there will be a "transitional provision", said the Ministry of Finance (MOF) said in a press release.
For such cases, the current BSD rates - instead of the revised rates - will apply if the Option to Purchase is exercised within three weeks of the Budget announcement, (on or before Mar 12), or the OTP validity period, whichever is earlier, said the ministry.