From 2018 to 2021, about 0.5 per cent of private residential property deals involved “99-to-1” or similar arrangements. This is where individuals without any previous property buy a property in their name, then very quickly sell a one per cent interest to another person with a higher Additional Buyer’s Stamp Duty (ABSD) profile - typically a spouse or other immediate family member who has the ability to secure financing for the property. This effectively reduces the ABSD on the property purchase. Senior Minister of State for Finance Chee Hong Tat said this in Parliament on Friday (Apr 21) in reply to MPs’ questions. He said as part of surveillance efforts, the Inland Revenue Authority of Singapore detected “a small but rising number” of such deals in recent years. It therefore started audits of such transactions. If it finds cases of tax avoidance, it will recover the rightful amount of stamp duty from the buyers and may impose a 50 per cent surcharge on the additional stamp duty payable. Mr Chee said that as such arrangements make up a very small proportion of overall transactions, the impact on the residential and mortgage markets is not significant. As for individuals who promote or facilitate such arrangements, they will also be dealt with. Property agents, for example, will be referred to the Council for Estate Agencies for investigation and disciplinary action. They may face financial penalties and suspension of registration.
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