Couple found guilty of backdating Option to Purchase to avoid higher stamp duties on condo unit
SINGAPORE: Two property buyers who backdated an Option to Purchase to evade newly raised stamp duties pleaded guilty to the offence on Thursday (Sep 2).
Daniel Halim and his wife Lee Liu Ying, both 44, faced one charge each of violating the Stamp Duties Act.
Court documents showed that the two - who already owned a condominium unit in West Coast Crescent and a Housing Board flat in Strathmore Avenue - wanted to buy a fourth-floor apartment at Sandy Palm condominium in Loyang.
On Jul 24, 2018, Halim and Lee executed the Option to Purchase for the Sandy Palm unit, but backdated it in order to avoid paying additional duties.
This was because on Jul 5 that year, the Government announced cooling measures, raising rates for the additional buyer's stamp duties from 10 to 15 per cent for Singaporeans buying their third and subsequent residential property.
The revised rates kicked in on Jul 6, but residential properties purchased on or after that could qualify for the 10 per cent rate if they met certain conditions. These included buyers whose Option To Purchase for the property was granted on or before Jul 5, 2018.
Investigations by the Inland Revenue Authority of Singapore (IRAS) found that after their first viewing of the property on Jul 7, Halim and Lee instructed their agent Mu Shen to instigate the seller’s agent Loy Thye Wei to backdate the Option to Purchase for the Sandy Palms apartment to Jul 4.
This was to avoid paying the higher additional buyer's stamp duties rate of 15 per cent, said IRAS senior tax prosecutor Norman Teo.
The couple told Mu they would only proceed with the transaction if the document was backdated, as they would otherwise not have enough cash on hand to complete the purchase. The additional buyer's stamp duties had to be paid in cash.
Halim and Lee made an initial offer of S$1.35 million for the property, although this was increased to S$1.38 million upon their second viewing on Jul 8.
The prosecutor noted that this S$30,000 increase in the transacted price only resulted in a S$1,500 increase in the minimum cash payable.
However, in order to afford the initial cash outlay for the purchase of the property, the couple decided to save on the additional buyer's stamp duties, even though they did not qualify for the transitional remission.
Halim also backdated the option cheque to Jul 4, 2018, to match the date of the backdated Option to Purchase to create the appearance that it was granted on Jul 4.
Loy, acting on Mu’s instigation, wrote the backdated date of Jul 4 on the Option to Purchase form, without the seller’s knowledge.
Halim and Lee did not at any point ask Mu to check with the seller on whether he agreed to such an arrangement, the prosecution noted.
The amount of additional buyer's stamp duties underpaid by the couple amounted to S$69,000.
On Jul 12 this year, Mu pleaded guilty to to one charge of abetting by instigating Loy into falsely stating the Option to Purchase date.
Loy is expected to plead guilty on Friday.
Halim, Lee and Mu will appear in court again on Sep 10 for sentencing.