Property agent, buyers admit to backdating an option to purchase to evade higher stamp duty

The property involved is a fourth-storey unit at 163 Jalan Loyang Besar which corresponds with leasehold condominium Sandy Palm. SCREENGRAB: GOOGLE MAPS

SINGAPORE - A property agent and two buyers of a condominium unit have admitted to backdating an option to purchase (OTP) to avoid paying higher additional buyer's stamp duty (ABSD).

Property agent Loy Thye Wei pleaded guilty to one charge under the Stamp Duties Act on Friday (Sept 3). Buyers Daniel Halim and Lee Liu Ying each pleaded guilty to a similar charge on Thursday.

All three are Singaporeans aged 44.

The property involved is a fourth-storey unit at 163 Jalan Loyang Besar. The address corresponds with that of Sandy Palm, a 99-year leasehold condominium in Pasir Ris.

The court heard that the offences took place in July 2018, after the Government announced a round of cooling measures for the property market.

For Singaporeans buying their third and subsequent residential property, the ABSD rate was 10 per cent until July 5, 2018, but this rose to 15 per cent from July 6, 2018.

The ABSD is a tax paid on top of the existing buyer's stamp duty (BSD). ABSD and BSD are computed on the purchase price or the market value of the property, whichever is higher.

As Daniel and Lee already owned two properties, and their OTP had not been granted on or before July 5 they had to pay 15 per cent in ABSD.

The couple first viewed the property on July 7 and proposed to Loy, through their agent Mu Shen, the scheme of backdating the OTP to July 4.

A search on the Council for Estate Agencies' public register shows that Loy has been with ERA Realty Network since 2017, while Mu was previously with PropNex Realty.

During their second viewing on July 8, they agreed on a purchase price of $1.38 million and told Mu that they would only proceed with the transaction if the OTP was backdated.

Mu instigated Loy, who then went ahead with the plan despite concerns raised by the property's seller.

The couple executed the OTP on July 24 and evaded $69,000 in ABSD by paying 10 per cent of duty instead of 15 per cent.

The cheque issued by Daniel for the option fee - a 1 per cent deposit of $13,800 - was also illegally backdated to July 4 to lend credibility to the scheme.

For successfully closing the deal, Loy had her commission raised from 1 per cent to 1.5 per cent. Her ill-gotten gains were shared with Mu.

Court documents did not state how the offences came to light, only that the Inland Revenue Authority of Singapore received information on the case.

Mu pleaded guilty in July to one charge of abetting by instigating Loy into falsely stating the OTP date.

Loy, Mu, Daniel and Lee will return to court for sentencing on Sept 10.

The maximum penalty for each offence of omitting information in the OTP with intent to evade duty is a $10,000 fine and a jail term of three years.

Join ST's Telegram channel and get the latest breaking news delivered to you.