Decoupling is a prevalent strategy in Singapore for acquiring a second property while bypassing the Additional Buyer’s Stamp Duty (ABSD). Acquiring a second property often entails the imposition of ABSD, a substantial expense. To mitigate this cost, numerous homeowners, frequently married Singaporean couples, contemplate transferring one partner’s share of their existing property to the other co-owner. This tactic effectively frees the other party, allowing them to buy an additional property as a first-time buyer without incurring ABSD.
This strategic maneuver is commonly referred to as “decoupling” or “part purchase.” It’s important to note that financial method is permissible only under specific circumstances within the Housing and Development Board (HDB) framework:
- Death of an owner
- Financial complications
- Renouncement of Singapore citizenship
- Medical reasons
For private property owners, Decoupling or Partial Purchase Mortgage offers more flexibility, with fewer constraints in place. However, there are two crucial considerations:
- If there is an existing mortgage on the property, the buyer is responsible for financing the existing loans.
- The seller is obligated to pay the Seller’s Stamp Duty if they transfer property ownership within four years of purchase.
In 2016, concerns arose over the abuse of the Decoupling / Part-Share rule by many homeowners. Consequently, regulations were tightened, necessitating a meticulous approach to the decoupling or partial property purchase process to avoid potential complications that could jeopardize transactions.
To safeguard against such pitfalls, please provide your details below, and I will reach out to explain the intricacies of decoupling. Properly structuring your property strategy with appropriate financial methods and adhering to relevant regulations can empower you to reconfigure your property portfolio effectively.