Real estate is a fast-paced and dynamic industry. Are you aware of the payable duties and tax implications involved in the sale of a property?
When the owner disposes the property, there are various tax implications:
Seller Stamp Duty for Residential Property
The Seller Stamp Duty (SSD) payable depends on the holding period of the property. The SSD is payable based on the market value of the property and in most cases, the selling price of the property. Effective 11 March 2017, the SSD payable for residential property is:
Seller Stamp Duty for Industrial Property
The Seller Stamp Duty payable depends on the holding period of the industrial property. Effective 12 January 2013, the Seller Stamp Duty payable for industrial property is:
Additional Conveyance Duties for Seller
Additional Conveyance Duties for Seller is applicable on qualifying disposal of equity interest in property-holding entities whose primary tangible assets are Singapore residential properties. Each qualifying disposal on or after 11 March 2017 is subject to the Additional Conveyance Duties for Sellers (ACDS).
Effective 20 February 2018, the top marginal ACDS rate is 12%.
Income Tax on Gain on disposal of property
In addition to the SSD and the ACDS payable, the seller may have to pay Income Tax on the gain arising from the disposal of real property. This happens when the owner is trading in properties. Badges of trade assist to determine if the transaction on property or the series of transaction on property tantamount to trading in property.
I hope this article helps you to better advise your clients about their real estate and financial planning needs.