ADDITIONAL BUYER’S STAMP DUTY FOR RESIDENTIAL PROPERTIES TRANSFERRED TO A LIVING TRUST

 

On 8 May 2022, the Government announced that Additional Buyer’s Stamp Duty (“ABSD (Trust)”) of 35% will apply to any transfer of residential property into a living trust (being a trust that is created by a person during his or her lifetime) with effect from 9 May 2022.

Prior to 9 May 2022, where a living trust is structured such that (i) there is no identifiable beneficial owner at the time when the residential property is transferred into the trust, ABSD did not apply, and (ii) the beneficial owner(s) were identified, the rate of ABSD payable for transfer of residential property to the trust was based on the profile of the beneficial owner(s).

After the change in policy, ABSD (Trust) at a rate of 35% is now payable upfront even if there is no identifiable beneficial owner at the time the residential property is transferred into a trust. Residential properties transferred into trusts for housing developers continue to be subject to the ABSD rate of 40% (35% of which may be remitted subject to conditions).

Application for refund may be allowed where the ABSD rate corresponding to the profile of the beneficial owner with the highest ABSD rate is less than 35% provided that the conditions stipulated under the Stamp Duties (Trusts for Identifiable Individual Beneficiary) (Remission of ABSD) Rules 2022 are met. The refund amount will be based on the difference between the rate of 35% and the ABSD rate corresponding to the profile of the beneficial owner with the highest ABSD rate.