SINGAPORE - Transfers of residential properties into a living trust will be subject to an additional buyer's stamp duty (ABSD) of 35 per cent from Monday (May 9), the Ministry of Finance (MOF) announced on Sunday.
A living trust is created by an individual during his lifetime, where a designated person, the trustee, is given responsibility of managing that individual's assets for the benefit of the eventual beneficiary.
The move comes after the Government announced its most recent round of property cooling measures on Dec 15, under which the ABSD was raised to 17 per cent from 12 per cent for Singaporeans buying their second property.
Currently, the buyer's stamp duty (BSD) is payable when a residential property is transferred into a living trust.
The ABSD may also be payable, depending on the profile of the beneficial owner of the property transferred into the trust.
However, ABSD now does not apply where there is no identifiable beneficial owner at the time the property is transferred.
The Government intends to address this gap by introducing the new ABSD, MOF said in its Sunday statement.
"With this change, ABSD will be payable even if there is no identifiable beneficial owner at the time the residential property is transferred into a trust," it said.
This will promote a stable and sustainable residential property market, it added.
The new ABSD is to be payable upfront, when the residential property is transferred into any living trust.
As a concession, a trustee may apply to the Inland Revenue Authority of Singapore (Iras) for a refund of the new ABSD if certain conditions are met.
Refund applications should be submitted to Iras within six months after the instrument is executed.