The Singaporean government has increased the top marginal Buyer’s Stamp Duty (BSD) rate for residential properties to 4% to ensure that Singapore’s “tax system remains progressive”.
The tax will be applicable on the portion of residential property value which is in excess of S$1 million (US$ 0.76 million). The rise in BSD came into force on February 20.
Since 1996, BSD rates for residential properties have remained unchanged, ranging between 1% and 3% based on the property’s value.
Finance Minister Heng Swee Keat said in his budget speech that the measure makes Singapore’s tax system more progressive, fair and resilient.
“One common suggestion is to tax the rich and higher-income more, or introduce wealth taxes like a capital gains tax…This reflects a desire for a progressive system, with those with more contributing back to society…This is fair, and it’s precisely what we’ve done over the years,” he said. The Singapore government had increased personal income tax rates for top income brackets in 2015 and introduced a cap on personal income tax reliefs in 2016.
“Moving forward, we will continue to study options to ensure that our tax system remains progressive.”
BSD is tax paid on documents signed when acquiring property in Singapore.
After this budget announcement, the shares of many Singapore-listed property developers fell.