For many, buying a second property is a dream come true, but in Singapore, it also means paying a hefty Additional Buyer’s Stamp Duty (ABSD).
If you buy a second property, the ABSD for Singapore Citizens is 20% of the purchase price or the current market value of the property, whichever is higher. For Singapore Permanent Residents (PRs), it’s 30%, and for foreigners, it’s 60%.
This property tax was introduced by the government to cool down an overheated market, similar to other property cooling measures like the Seller’s Stamp Duty (SSD) and the Total Debt Servicing Ratio (TDSR).
However, many married couples in Singapore have found a way to buy a second home without paying ABSD—a process known as “Decoupling”.
What is “Decoupling”?
When a married couple who jointly owns a property transfers the property title, moving the ownership to one spouse’s name. That is, one person transfers all of their existing property ownership to their spouse, allowing the other person to purchase a second property as a first-time homebuyer.
For example: If you decide to buy a second property worth $1 million as an investment without “decoupling,” you would have to pay $170,000 in ABSD (assuming you are a citizen buying a second residential property). But through “decoupling,” you can save this money.
| Property Tax | How much you pay without “decoupling” | How much you pay with “decoupling” |
| Additional Buyer’s Stamp Duty (ABSD) | $170,000 | None |
| Buyer’s Stamp Duty (BSD) | $24,600 | $24,600 |
| Total | $194,600 | $24,600 |
Please note that this calculation only specifies the cost of the “Additional Buyer’s Stamp Duty” and does not include other costs, such as outstanding home loans and CPF funds that need to be refunded. We have added a more detailed “decoupling” scenario at the end of this article.
Sounds good, right? Unfortunately, it’s not for everyone.
For HDB Flat Owners Considering “Decoupling”
Since 2016, HDB flat owners are not allowed to transfer ownership to family members. “Decoupling” is only permitted in the following six situations:
1. A family member gets married
2. Family members get divorced
3. A family member passes away
4. A family member has financial problems and is in economic hardship
5. A family member renounces their citizenship
6. A family member has medical reasons
In most cases, “decoupling” can only be done for private properties.
How Can Private Property Owners “Decouple” Their Homes?
Private property owners have two ways to “decouple”: by sale (part-purchase) and by way of gift.
Table of Contents
1. Transfer by Sale (Part-Purchase)
In this process, one spouse legally purchases all remaining shares of the property from the other. All terms of the contract need to be detailed in the Sales & Purchase Agreement (S&P), which is usually drafted by a lawyer.
To complete the transaction, the buyer must pay the seller for ownership of the property as stipulated in the S&P agreement and pay the Buyer’s Stamp Duty to the Inland Revenue Authority of Singapore (IRAS).
Buyer’s Stamp Duty (BSD) effective from February 20, 2018
| Property Price | Stamp Duty Rate |
| First $180,000 | 1% |
| Next $180,000 | 2% |
| Next $640,000 | 3% |
| Remaining Amount | 4% |
Seller’s Stamp Duty (SSD) effective from March 11, 2017
| Holding Period | Stamp Duty Rate |
| Within 1 year | 12% |
| More than 1 year, within 2 years | 8% |
| More than 2 years, within 3 years | 4% |
| More than 3 years | No SSD payable |
The lawyer will then use these proceeds to repay the seller’s existing mortgage, CPF, and Seller’s Stamp Duty (if any), before transferring ownership to the buyer.
If you need any help in this area, please call 9762 1726 or Whatsapp us, and we will provide you with corresponding advice and assistance.
Case A: Zhang Wei and Wang Jing’s Joint Tenancy ( 50 – 50 )
In this situation, Zhang Wei and Wang Jing (both citizens) are co-owners of a condominium unit, which they have owned in equal shares for over four years. This is also known as Joint Tenancy, which means both Zhang Wei and Wang Jing each own 50% of the property.
Most properties owned by couples have equal ownership shares.
If one co-owner passes away, the other will inherit the entire property under the Right of Survivorship. This is irrespective of whether the deceased had a will, as the Right of Survivorship will take precedence over a will.
Now, let’s assume Zhang Wei intends to invest in a condominium for a stable rental income source, but the Additional Buyer’s Stamp Duty would be a significant cost.
How Zhang Wei and Wang Jing Decouple This Condominium:
Current valuation of the condominium is $1 million
Outstanding housing loan balance: $500,000 (split equally between Zhang Wei and Wang Jing as they each own 50% of the property)
Sale price for 50% share (as Zhang Wei and Wang Jing each own 50%): $500,000 ($1 million / 2)
| Zhang Wei sells his 50% ownership to Wang Jing | Wang Jing buys 50% ownership from Zhang Wei |
| Sale price: $500,000 | Purchase price: $500,000 |
| Repay original housing loan: $250,000 | How Wang Jing pays:
(a) 30% (Cash + CPF): $150,000 (minimum $25,000 cash) |
| Refund to Zhang Wei’s CPF: $150,000 (including accrued interest) | Wang Jing’s other expenses (Cash/CPF):
(b) Buyer’s Stamp Duty (Purchase price * 3% – $5,400): $9,600 (c) Estimated legal fees (2 firms): $5,500 |
| Zhang Wei’s cash proceeds: $100,000 | (a+b+c) Wang Jing’s total cost: $165,100 |
| (d) 70% new housing loan: $350,000
(e) Wang Jing’s current housing loan: $250,000 (d + e) Wang Jing’s new loan amount after decoupling: $600,000 |
After decoupling, Zhang Wei will receive $100,000 in cash proceeds, which he can use to purchase a new condominium without incurring Additional Buyer’s Stamp Duty.
However, Wang Jing’s loan amount will increase to $600,000. This is a heavy financial burden for someone with only one income and is not recommended for everyone.
Therefore, we strongly advise you to speak with our local senior property agents before decoupling. With the help of our housing loan partners, we can assist you in proper financial planning so that you can achieve your property goals without affecting your finances.
However, not all properties are under joint tenancy or have equal ownership shares.
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Case B: Tenancy-in-Common ( 99 – 1 )
In this new scenario, Zhang Wei and Wang Jing are tenants-in-common. This means that instead of an equal split, Zhang Wei owns 1% of the property, while Wang Jing owns the remaining 99%.
| Zhang Wei sells his 1% share to Wang Jing | Wang Jing buys 1% share from Zhang Wei |
| Sale price (1% of $1 million): $10,000 | Purchase price (1% of $1 million): $10,000 |
| Repay original housing loan: $5,000 | How Wang Jing pays: 30% (Cash + CPF): $3,000 (minimum $500 cash) |
| Refund to Zhang Wei’s CPF: $0 | Wang Jing’s other expenses (payable in cash/CPF):
Buyer’s Stamp Duty: $100 Estimated legal fees (2 firms): $5,500 |
| Zhang Wei’s cash proceeds: $5,000 | Wang Jing’s total cost: $8,600 |
| 70% new housing loan: $7,000
Wang Jing’s current housing loan (500k x 99%): $495,000 Wang Jing’s new loan amount after decoupling: $502,000 |
Now Zhang Wei can proceed to purchase a new condominium without incurring any Additional Buyer’s Stamp Duty, as he has sold his ownership of the property to Wang Jing.
Under the 99-1 rule, the payable Buyer’s Stamp Duty is only 1%, just $100, which is much lower than the $9,600 stamp duty in the first case. Only the legal fees remain the same.
The risk in this situation arises in the event of a divorce, where one party will own 99% of the house. You might argue it in court, but this could take time and result in higher legal fees.
2. Transfer by Way of Gift
You can transfer your property ownership as a gift without receiving any payment, but this is only possible if the property was purchased without a mortgage or CPF funds.
Is “Decoupling” Right for You?
Before deciding to “decouple” your property from your spouse, discuss it with an experienced senior real estate agent and check all involved costs and risks. Some couples may find that paying the Additional Buyer’s Stamp Duty is a better or faster option, while others may be more hesitant. Whichever situation you are in, getting professional property and mortgage advice is always wise. For any inquiries in this regard, feel free to contact us.
Frequently Asked Questions about “Decoupling”
1) What if I don’t have enough CPF to pay the down payment, stamp duty, or legal fees?
If your CPF savings are insufficient, all payable costs or fees will have to be paid in cash.
2) Can I apply for a mortgage for my second property?
Please be aware of the “Total Debt Servicing Ratio” (TDSR), which sets a monthly repayment threshold for home loans at a maximum of 55% of the borrower’s monthly income.
The eligible loan amount may vary depending on your partner’s income, employment status, credit history, etc. You can contact us to verify your eligibility.
3) As the seller, can I keep the sales proceeds after decoupling?
All CPF Ordinary Account funds and accrued interest used to pay for the property must first be returned to your CPF account. The remaining surplus will be returned to the owner in cash.
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