A Singapore woman has revealed that she is unable to buy her own property without incurring the additional buyer’s stamp duty (ABSD) because she added her name to the ownership of her parents’ HDB flat long ago to help them finance their mortgage.
The Government raised the ABSD in 2018 as a property cooling measure in response to the en bloc frenzy that erupted in 2017-2018. As part of a slew of curbs that were introduced to ease the property market, the authorities raised the ABSD for citizens buying second and subsequent homes to 12 per cent.
In a forum letter published by the Straits Times on Tuesday (14 Jan), Cynthia Lim Sin Shyan said that the Inland Revenue Authority of Singapore (IRAS) has rejected her application to waive the ABSD that she would incur if she bought her own property, since her name was added to the ownership of her parents’ flat.
Ms Lim said: “Shortly after graduating, I joined the workforce and added my name to the ownership of my parents’ Housing Board flat to help in the payment of the mortgage. I have been married now for several years and still do not own a property because I would end up paying the additional buyer’s stamp duty (ABSD).”
IRAS rejected Ms Lim’s application to have the ABSD waived on the basis that “ABSD treatment has been consistently applied to all Singaporeans in circumstances similar to mine” and that it would not be able to make an exception for her.
Ms Lim and her husband would only be eligible for a refund of the ABSD if they bought a home together, only if they first pay the ABSD, sell her parents’ flat within six months of purchasing their own property and then apply for a refund of the ABSD within six months after the date of sale of her parents’ property.
Asserting that such an application of the ABSD policy “works against” those with lower incomes since it does not seem to consider specific circumstances, Ms Lim asked:
“I understand that the objective of the ABSD is to reduce demand for residential properties so that housing remains affordable for Singaporeans. But how many Singaporeans are in the same situation as me? Is the number big enough to drive up property demand in Singapore if we were to be exempted from the ABSD?”
She added: “I feel that a good and fair policy should consider the unique circumstances of individual cases. Consistency may not always be the right thing to do.”
Read Ms Lim’s letter in full HERE.