Surprising fact: more than 60% of buyers underestimate the extra fees that change their final purchase price by thousands.
Imagine you are sizing up a shophouse or an office strata lot. Your first question is how the added levy alters your exit math and cash flow.
This guide explains the core rules: Buyer’s Stamp Duty (BSD) is calculated on the purchase price or the market value — whichever higher — and rounded down to the nearest dollar. From 15 Feb 2023, the top BSD rates rose, so rates matter when you model returns.
Remember: the first document for a sale and purchase pays ad valorem duty; later forms for the same deal usually do not. Non-cash incentives rarely reduce the duty base, while immediate cash discounts stated in the instrument may if the net price still reflects market value.
Key Takeaways
- BSD is charged on the higher of purchase price or market value; anchor your numbers to current valuations.
- The first executed instrument attracts ad valorem duty; subsequent documents normally do not.
- Only immediate cash discounts in the document can lower the taxable base if market value remains reflective.
- Non-residential and residential rates diverge since Feb 2023, affecting investor choices.
- Use a tool like a stamp duty calculator to check scenarios quickly.
commercial property stamp duty singapore: A Buyer’s Guide at a Glance
Start here: a clear snapshot of which assets trigger the main levies and how they change your purchase math.
What counts as non-residential? Offices, retail units, hotels, warehouses and most industrial uses are treated under non-residential rules. Mixed-use sites split the taxable share by attributable GFA; a common split is 60% residential and 40% commercial, set by a valuer when needed.
You will always encounter buyer stamp duty on a sale purchase. BSD is assessed on the price market value, so your valuation strategy matters as much as negotiation on price.
“From 15 Feb 2023 the top BSD tiers moved to 5% for non-residential and 6% for residential, which changes hold vs. buy calculations.”
- Additional buyer stamp applies only to residential property acquisitions based on buyer profile.
- Seller stamp duty is an exit cost: SSD can apply to residential disposals within set holding periods and to industrial sales within three years (15/10/5%).
Map each asset to which levies touch it: BSD is universal, additional buyer stamp is residential-only, and SSD depends on your holding window. These basics set you up for accurate computations and scenario planning.
How BSD is computed for commercial properties
Start by accepting one rule: the greater amount sets the taxable base for your transaction.
“Whichever is higher” means BSD is computed based on the purchase price or market value — whichever higher — so your forecast must reflect the higher figure.
Stepwise rates since Feb 2023
For non-residential assets the bsd rates apply stepwise: 1% on the first $180,000; 2% on the next $180,000; 3% on the next $640,000; 4% on the next $500,000; and 5% on the balance (effective feb 2023).
Discounts, rounding and timing
Only an immediate cash discount declared in the instrument and given on execution can reduce the purchase price market base. Non-cash benefits or off‑document rebates do not lower the taxable base.
BSD is rounded down to the nearest dollar (minimum $1). The first instrument for a sale and purchase attracts ad valorem duty; later documents usually do not. You are required to pay stamp promptly after the date of execution to avoid penalties.
Real-world purchase scenarios that affect duty payable
Practical deals expose how legal form and timing move your final fiscal outcome. Imagine that the moment you sign or accept triggers the charge. The date of execution often decides which instrument bears the levy payable.
Standard sale, options and gifts
In a standard sale purchase, you trigger ad valorem charges when you accept an option or sign the agreement. Compute the tax on whichever higher of price and market value.
Gifts are not exempt. If a transfer is by gift, the buyer stamp duty is assessed on the market value of the value property.
Single contracts and block purchases
If you buy multiple units under one contract, the levy is computed on the total price. Dependent documents that form one deal are treated similarly.
Mixed-use splits and trusts
For mixed sites, apportion by attributable GFA (commonly 60% residential / 40% non‑residential) and apply each BSD schedule separately.
A declaration of trust with no change in beneficial interest attracts a $10 fixed charge. If beneficial interest changes, ad valorem rules apply and ad valorem duty becomes due.
Check BSD guidance for exact timings and templates to lodge the correct amount on the right instrument.
Rates, holding period, and exit costs: SSD considerations for investors
When you plan a sale, the timing and applicable rates can change your net proceeds significantly.
Imagine you buy an asset and then decide to flip it. The seller stamp duty (SSD) clock starts on the purchase date and runs against your exit date.
Industrial assets: three-year SSD window
For industrial purchases made on or after 12 Jan 2013, SSD applies for three years.
Rates: year 1 = 15%; year 2 = 10%; year 3 = 5% of the price or market value, whichever is higher.
Residential timelines and July 2025 changes
For residential units bought between 11 Mar 2017 and 3 Jul 2025, SSD within three years is 12% (≤1 year), 8% (>1–2 years) and 4% (>2–3 years).
For acquisitions on or after 4 Jul 2025, the schedule extends to four years and early rates rise: 16%, 12%, 8% and 4% for successive yearly bands.
| Asset | Holding period | SSD rate |
|---|---|---|
| Industrial | ≤1 year / 2 years / 3 years | 15% / 10% / 5% |
| Residential (11 Mar 2017–3 Jul 2025) | ≤1 / >1–2 / >2–3 years | 12% / 8% / 4% |
| Residential (from July 2025) | ≤1 / >1–2 / >2–3 / >3–4 years | 16% / 12% / 8% / 4% |
- Model SSD as a hard cost tied to the holding period when you run IRR scenarios.
- Tag each asset with its SSD timeline to avoid costly mis-timing around a key date.
- Remember ABSD can interact with seller stamp events in mixed portfolios—sequence your trades thoughtfully.
When remission may apply and how to secure it
Before you sign, consider whether an upfront remission can lower the levy if residential-zoned land will be redeveloped for non-residential use.
Imagine you buy a site to build a mall or business park. You may qualify for a BSD remission equal to the difference between residential and non-residential bsd rates under the current schedule (effective Feb 2023).
Use-restricted sites
For parcels with a mandated non-residential GFA, you must develop or use the required X% as non-residential. Submit the Technical Condition of Tender and Written Permission within 14 days from the date of acquisition.
If any of that X% later becomes residential, you are required pay back the remitted amount immediately.
100% non-residential redevelopment (non-restricted sites)
If you redevelop residential land entirely for non-residential use, you must undertake not to use it for residential and notify IRAS if the use changes.
Upload the Written Permission and the TOP/CSC within 14 days of the earlier date. Breach triggers repayment equal to the remitted sum.
Other remissions and edge cases
Reliefs exist for matrimonial transfers, aborted sales (apply within six months), FTAs treated as citizens, and ABSD (Trust) refunds for identifiable beneficiaries.
- Apply via the e-Stamping Portal within 14 days from acquisition.
- Required documents: instrument, a Letter of Undertaking, and supporting proofs.
- Maintain records on market value and price support to withstand review.
“Lock development intent early and build a compliance calendar tied to each critical date to protect your remission.”
Conclusion
Before you close a deal, lock in a clear estimate of the likely stamp duty and how it alters returns.
Treat buyer stamp duty as a core line item and note when additional buyer stamp applies to residential exposure. Anchor every model to the purchase price and the price market value, since calculations follow the rule of whichever higher.
Keep a one-page reference of BSD rates and a simple template that logs purchase assumptions, purchase price, market value, and how you will pay stamp. Flag residential holdings for ABSD and track SSD timelines.
Align legal, tax, and valuation teams early. If figures change late, rerun duty scenarios immediately to protect your returns.
For a practical checklist and rate summary, see this concise guide: commercial stamp duty overview.
FAQ
What counts as “commercial” and “non-residential” for stamp duties?
You should view any asset used primarily for business, industrial, retail, or office purposes as non-residential. Mixed-use buildings are classified by the dominant use or by the proportionate floor area for each use, which affects how duty is applied. Local planning designations and tenancy mix often help determine the correct classification.
How do Buyer’s Stamp Duty, Additional Buyer’s Stamp Duty, and Seller’s Stamp Duty differ?
Buyer’s ad valorem tax is charged on acquisitions based on price or market value. Additional buyer’s tax targets certain purchaser profiles or foreigners and is layered on top of the basic charge. Seller’s tax applies when you dispose of a residential asset within a short holding period; it’s calculated on the disposal price. Each has its own rates, exemptions, and filing rules.
What does “whichever is higher” mean: purchase price vs. market value?
Authorities compute the tax using either the transaction price or the assessed market value—whichever yields a higher liability. This prevents understatement of value. You must be prepared to support the declared price with documents; if the market assessment is higher, you’ll pay based on that figure.
What are the current ad valorem rates for non-residential acquisitions (from Feb 2023)?
For non-residential buys, ad valorem rates were adjusted in February 2023 and can reach up to 5%. The exact percentage depends on the purchase value band. Always check the Inland Revenue Authority’s latest schedule before completing a transaction, as thresholds and rates can change.
Which discounts or deductions can reduce the duty payable?
Deductions may include certain rebates for redevelopment or site assembly where statutory criteria are met, and documented transaction costs that are recognized under the law. Reliefs often require pre-approval, strict timelines, and certified documents to prove eligibility.
How do rounding rules, first instrument liability, and payment timing work?
Duty is typically rounded to the nearest dollar. The “first instrument” — usually the first executed sale document — determines who is liable to pay. Payment deadlines are strict; late payment attracts penalties. You should lodge and pay within the statutory period or seek extensions where permitted.
How are standard sale, options, and gifts treated for duty purposes?
A straightforward sale triggers ad valorem tax based on the contract price or market value. Option agreements may attract duty when exercised or assigned, depending on structure. Gifts or transfers without adequate consideration can be taxed on the market value at transfer, subject to specific exemptions.
What if a single contract covers multiple assets or a block purchase?
When one agreement covers multiple assets, duty is computed separately for each item if values can be apportioned. For block acquisitions, aggregation rules apply and can affect whether different rates or exemptions are available. Clear apportionment schedules help avoid disputes.
How is tax handled for mixed-use buildings with both commercial and residential components?
You allocate the consideration between the residential and non-residential parts on a fair and documented basis—often by floor area or market value of each component. Each portion is then taxed under the applicable regime. Precise apportionment is key to avoid reassessments.
When do transfers involving trusts or changes in beneficial interest attract ad valorem tax?
A change in beneficial ownership, including trust distributions or reconveyances, can be treated as a taxable transfer if legal or equitable interest changes hands. Trustees and beneficiaries should seek advice early, as exemptions and reliefs may apply but require timely documentation.
Are there specific short-term disposal rules for industrial assets under seller tax?
Some industrial assets face a short holding-period levy if disposed of within defined years after purchase. The aim is to curb quick speculative flips. Check the exact time thresholds and rates for industrial categories before you sell.
How do residential SSD timelines and recent changes (July 2025) affect mixed portfolios?
Recent updates taking effect in July 2025 adjusted holding periods and penalty scales for residential disposals. For mixed portfolios with residential components, the revised timelines may increase exit costs if you dispose within the look-back period. Review your holding strategy against the new thresholds.
When can remission apply and how do you secure it?
Remission may apply for projects like redevelopment where land bought as residential is intended for non-residential use, or for sites restricted to specific uses. You must file supporting plans, development approvals, and meet deadlines. Pre-approval or submission of applications well before completion often improves chances of success.
What documentation is required for BSD remission on land acquired for non-residential development?
Expect to provide the sale agreement, planning approvals, redevelopment proposals, and statutory declarations confirming intended use. Deadlines for submission are strict; missing them can void remission claims.
How do use-restricted sites differ from 100% non-residential redevelopment for remission purposes?
Use-restricted sites permit only certain activities under zoning rules, which may qualify for partial relief if redevelopment stays within those limits. A full non-residential redevelopment that converts land to wholly business use often meets different criteria and documentation requirements for remission. Each path demands tailored evidence.
What other common remissions or edge cases do buyers ask about?
Buyers frequently ask about remission for government acquisition adjustments, statutory compensation, mergers, and reorganizations that affect ownership. Edge cases include transfers between related parties, extinguishment of interests, and boundary adjustments—each with specific proofs and timing rules.
