Last Friday, the Singapore Government announced stamp duties
changes and new measures relating to Singapore residential
properties that come into effect on 11 March 2017. Here is a
quick look at the changes and their impact:
1. Changes to the Seller's Stamp Duty on Residential
What is SSD?
SSD a duty that is payable on all residential properties and
residential lands that are bought on or after 20 Feb 2010 and sold
within the holding period.
What are the changes to SSD?
Existing and new Seller's Stamp Duty (SSD) rates for
What is the impact of this change?
The changes to the Seller's Stamp Duty regime are not
expected to have any immediate effect on the property market in
Singapore. The new SSD regime only applies
to residential properties purchased on or after 11 March 2017 and
does not apply retrospectively. Residential properties which
were purchased between 14 January 2011 to 10 March 2017 (both dates
inclusive) are still subject to payment of some amount of SSD if
such property is sold during the applicable 4 year
holding period. Such properties bought after 14 Jan 2011
which have fulfilled the 4 year holding period may already be
available for sale in the market. Hence, it is highly
unlikely that this change will trigger a sudden large increase in
the supply of residential properties for sale in the market.
The minor revision of the Seller's Stamp Duty's holding
period from 4 years to 3 years gives some hope that the government
may proceed with the tweaking of the Additional Buyer's Stamp
Duty in time to come, though we do not expect this anytime soon.
We anticipate that any changes to the Additional Buyer's
Stamp Duty regime in future – like this change in SSD - will
2. Revision to the Total Debt Servicing Ratio (TDSR)
What is the TDSR?
The TDSR limits the amount of money banks and other financial
institutions can lend to an individual. Currently it is
pegged at 60% of the borrower's gross monthly income minus all
of the borrower's outstanding debts which will include car
loans, credit card balances, personal loans etc.
What is the change in the TDSR?
With effect from 11 March 2017, this 60% TDSR threshold will no
longer apply to mortgage equity withdrawal loans with loan-to-value
ratios of 50 per cent and below. Mortgage equity withdrawal
loans are loans where borrowers borrow against the value of their
properties to obtain more cash.
What is the impact of this change?
Most of the mortgage equity loans that are taken up by
homeowners are usually those who use the loan proceeds for
investments or if they are business owners, for the working capital
for their businesses. Hence, the lifting of the Total Debt
Servicing Ratio framework in relation to mortgage equity loans may
help such business owners obtain more loans to support their
businesses in this current uncertain economic climate.
However, business owners may re-consider doing so in light of
the possibility of interest rate hikes in the near future.
For retirees who are taking up such mortgage equity loans, the
change will also mean that they are able to obtain more loans to
help them with their daily expenditure.
3. Stamp duties on the indirect transfer of residential
Previously, only direct transfers of Singapore residential
properties would be subject to buyer's stamp duties or the
requisite additional buyer's stamp duty or seller's stamp
On Friday, the Stamp Duties (Amendment) Bill No. 18/2017
('Bill') was passed to introduce changes that will charge
stamp duties on indirect transfers of residential properties as if
the properties were directly transferred.
The Bill will have an impact on transactions involving certain
conveyances of equity interests in companies, partnerships, limited
partnerships or limited liability partnerships or trusts with
certain ownership thresholds of Singapore residential
The Bill is deemed to come into operation on 11 March 2017.
4. Stamp duty on contract or agreement for the sale of stock or
The Bill also amends section 22(1)(b) of the Stamp Duties Act.
This amendment brings forward the time of stamping in a share
sales transaction from the time when the share transfers are
executed (for example, on completion) to the time when the
agreement for the sale of stock or shares is entered into.
This change will have an impact on transactions concerning sale
of company stocks or shares.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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In a recent case, the Ahmedabad Tribunal ruled that reimbursement made by an Indian company to a foreign company towards the cost of employees seconded by it to the Indian company does not attract tax withholding in India.
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