As property prices continue to climb in Singapore, savvy homeowners are exploring strategies to maximize returns and minimize taxes. One method that has gained significant popularity in recent years is decoupling property — a legal process that allows joint owners to restructure ownership, freeing up one party to purchase another property without incurring hefty taxes such as Additional Buyer’s Stamp Duty (ABSD).
For homeowners who intend to upgrade or invest in a second property, decoupling property in Singapore can result in substantial savings, making it a widely discussed and increasingly popular topic in the real estate scene.
Why Decoupling Property Can Lead to Huge Savings
The main reason homeowners consider decoupling is to avoid paying ABSD when purchasing their next property. As of recent years, Singapore’s ABSD rates for second or third properties can range from 20% to 30% or even higher, depending on the buyer’s citizenship status. These rates can easily translate to tens or even hundreds of thousands of dollars in extra costs.
By decoupling, one spouse or co-owner sells their share of the property to the other, effectively removing their name from the title. Once this is done, the individual who is no longer listed as a property owner can legally purchase another property as a “first-time buyer” — and enjoy ABSD exemption or lower rates.
This strategy is especially useful for families planning to invest in a second home, either for rental income or for future family use.
Decoupling for Condo vs HDB – What’s the Difference?
While the concept of decoupling is simple in theory, its application varies depending on the type of property — particularly between condominiums and HDB flats.
- Decoupling for Condominiums
Decoupling is commonly practiced for private properties such as condos. The process involves a part-sale between co-owners, typically spouses, and is executed through legal conveyancing and financing arrangements. While there are legal fees and potential stamp duties on the internal transfer, the long-term savings on ABSD often far outweigh the initial costs. - Decoupling for HDB Flats
For HDBs, however, decoupling is not as straightforward. HDB does not allow part-sales between owners. The only way to remove an owner is through a process called resale of ownership, which typically applies only in cases like divorce or change in family structure. As a result, decoupling is rarely a viable option for HDB flat owners looking to invest in a second property without paying ABSD.
Growing Popularity of Decoupling in Singapore
With high ABSD rates and a strong interest in building wealth through real estate, decoupling property Singapore has become a well-known strategy among homeowners and property investors. Financial consultants, law firms, and real estate agents frequently assist clients with the decoupling process, especially for private property owners seeking to restructure ownership efficiently.
That said, it’s crucial to seek professional advice before proceeding. Every case is unique, and factors such as outstanding loans, CPF usage, and legal fees need to be carefully evaluated to ensure the strategy is financially sound.
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