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How to Decouple your property to avoid ABSD?

Oct, 01
decoupling your property

How to decouple your property to avoid paying ABSD?

Property Lawyer SingaporeAdditional Buyer’s Stamp Duty (ABSD) is an additional cost on top of the existing Buyer’s Stamp Duty – which is based on the value of the property – to be paid whenever a purchase of property is made. But it can be quite costly, and as a result there are methods that people use to avoid paying the ABSD; one of these methods is decoupling. Today we will find out how the decoupling of property can help you avoid paying ABSD on your second residential property.

What is decoupling?

Decoupling is the transfer of ownership between the owners of a residential property – if the property is co-owned – where the buyer takes full ownership of the existing property. This is commonly done between married couples looking to buy a second property. How it works is that when the ownership of the property is transferred to the buyer, the property count of the seller is reduced thus the seller can buy a second residential property with reduced or zero ABSD.

Things to consider before you decouple your property

There are some things that you need to consider before you decide to decouple your property in order to avoid any future complications.

HDB Flats

Married couples are not allowed to decouple their HDB flat. Decoupling for a HDB flat is only allowed for buy over from an ex-spouse or for the transfer of the flat between family members..

Private Property

There is not much restriction on decoupling of private properties however, there are still some things to look out for. Firstly, if there is an existing mortgage on the property, the buyer will have to finance the existing loans. Secondly, the seller is liable for seller stamp duty if they transfer property ownership within four years of purchase.

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Cost and Savings of Decoupling

The purpose of decoupling a property is to get the maximum amount of savings from the reduction of ABSD payable. Let’s explore the costs associated with decoupling and how much in savings one can expect to receive.

Buyer Stamp Duty

The buyer of the property shares will still have to pay Buyer Stamp Duty on the agreed purchase price or value of the property even though they have part of the ownership.

Legal Fees

There are legal fees involved in the decoupling process as there are legal documents that need to be prepared to handle the purchase of property and transfer of ownership. The buyer will have to pay for the conveyancing fees – fees required for the transfer of property – while the seller engages a legal firm to handle the transfer and sale of their share of the property.


The savings made is the sum of these costs deducted from the cost of ABSD without decoupling. Savings will be made most of the time, however, sometimes the cost of decoupling can be more than the savings and thus not making it economically viable. Such is when decoupling is done on an expensive property to purchase a much cheaper piece of property.

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Pitfalls of decoupling

While the costs saved by decoupling is significant, it is not always the best option to choose.

The cost outweighs savings

Sometimes, the costs of decoupling can outweigh the cost of decoupling, especially when the first property costs more than the second.


If the transferor goes bankrupt within five years of the date of transfer, creditors may have the right to seize the transferred portion of the property.

Calculation Mistakes

It can be very confusing calculating the different amounts of ABSD payable for each scenario and it could be very costly. If calculation is not your forte, engage a professional or specialist to handle it for you, they will be able to advise you on the best course of action.

Legally Smart helped people to decouple their properties

A piece of property is a costly investment and it is important to cut costs as much as possible and as such, many turn to decoupling of property as a way to reduce the cost of investment. Here at LegallySmart, we specialize in property-related legal assistance and we have helped many to decouple their properties to get the best returns. Drop us a message and we will help you however we can!

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