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In order to curb rising house prices and prevent a property price bubble from forming after the Singapore property market crash in 2008, cooling measures had to be put in place to ensure a smooth recovery. The first of these measures was Seller’s Stamp Duty or ‘SSD’. Like Buyer’s Stamp Duty (BSD) and Additional Buyer’s Stamp Duty (ABSD), SSD is a form of property tax. SSD is payable if you sell your property within 3 years of purchasing it and is charged on either the agreed selling price of the estimated market value – whichever is higher.
Before we get started on how to calculate SSD, it should be noted that SSD is only applicable to the sale of residential property bought from 20 February 2010 onwards.
SSD, although it sounds daunting, is actually a very simple concept to grasp. The rate of SSD payable varies based on the holding period which is the number of years since the date of purchase of the property. 12% is payable if the residential property is sold within the first of purchase, 8% within the second year, 4% within the third year and not applicable from the fourth year onwards. The table below illustrates the amount of SSD payable for each holding period.
|1st year of purchase||12%|
|2nd year of purchase||8%|
|3rd year of purchase||4%|
|4th year onwards||No SSD payable|
Mr Tan is trying to sell his 5 bedroom executive HDB flat for $1,000,000 within the first year of the date of purchase. However, his property agent stops him and tells him to wait for two more years. After doing the calculations, Mr Tan found out he would have had to pay $120,000 in SSD had he sold his property in the 1st year of purchase, compared to $40,000 if he waits 2 more years.
There are exceptions made to waive the SSD payable under certain scenarios. Here are 5 scenarios in which you do not need to pay SSD.
If you already own a HDB flat prior to inheriting one, you will be obligated to sell off one of the properties. But don’t worry, this sale will be SSD free so you will not lose out. Also, if you own a non HDB flat and inherit a HDB flat, you will have to dispose (sell off) the HDB flat. This sale will also be SSD free.
Married couples are required by HDB regulations to stay in a single unit, a ‘family unit’ so to speak. This means that prior to marriage, if the couple owns a HDB flat each, one of them will have to dispose (sell off) their flats; SSD free.
In the case of a divorce or an order of separation where an Order of Court requires one spouse to sell their property to the other or their children, SSD will not be required.
HDB flat owners whose flats were bought back by HDB as a result of repossession or the Selective En-bloc Redevelopment Scheme (SERS) will not be required to pay SSD on the sale of their flat.
We hope that this one doesn’t happen to anyone, though it is very unlikely. Individuals who own residential property and have been required to dispose of their property as a result of bankruptcy will not have to pay SSD on the sale.
We hope you have learnt more about Seller’s Stamp Duty or SSD from this article. Sometimes patience is key into getting the best returns from the sale of your property. Most of us will probably feel vexed that we have to pay so much in taxes and the feeling is normal. It seems that SSD is here to stay and we can only accept and embrace it. We wish you the best of luck!