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The risks of using ‘decoupling’ to own two properties
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Couples who see decoupling as a way to co-own two properties can hit a major roadblock if they eventually fight over the shares of the real estate.
ST ILLUSTRATION: MANNY FRANCISCO
- Decoupling, a method to avoid ABSD, involves transferring property ownership but can be deemed tax evasion if the intention is to co-own two properties.
- Court rulings on "sham decoupling" apply retroactively, potentially leading to penalties, back taxes, and legal costs exceeding investment gains.
- Investors should consider higher property taxes, income tax on rental income, and legacy planning via wills to ensure desired asset distribution.
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SINGAPORE - If you are buying property for investment, pay more attention to its affordability and your ownership rights, instead of just focusing on ways to get it cheap by paying less tax.
When you taint a property transaction with a shady ownership arrangement to save on tax, you can actually lose your entire stake in your property and you might not get it back even if you file a claim in court.
