As a seller of property, your net cash to you is not the selling price of the property. The net cash available to you is reduced by many expenses and repayment. Some of the common expenses relevant to sale of property include agent commission, reinstatement, legal fee and bank charges. The seller has to repay the outstanding mortgage loan on the property.
In addition to the expenses and repayment, the seller of the property may be expected to pay these following taxes:
Seller Stamp Duty
Seller Stamp Duty is payable if the sale of the property took place within three years of purchase. The duty payable for residential property ranges from 4% to 12% while the duty payable for industrial property ranges from 5% to 15%.
Additional Conveyance Duty
Additional Conveyance Duty is payable by the Seller for disposal of the equity interest within three years of purchase. The duty is payable only if the Seller is a significant owner and the company has substantial amount of residential property.
Income Tax on Gain on Disposal
Generally, the gains derived from the sale of a property in Singapore (also known as capital gains) are not taxable. However, when your main income is derived from trading in properties, the gains from the sale of property will be taxed.
Goods and Services Tax
The Seller has to charge Goods and Services Tax, which is 7% of the value of the non-residential property. The Seller has to be registered as a GST trader to charge GST.
I hope this gives you more insight on how you can better advise your clients about their real estate and financial planning needs.