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Real Estate > Lesson 18 > Flashcards

Lesson 18 Flashcards

1
Q

Who qualifies for the Owner-Occupier Concession (OOC) tax rate?

A

An individual or a married couple who own and occupy only 1 residential property.

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2
Q

What are the exceptions to the OOC qualification?

A

a) Owners with more than 1 lawful spouse, each occupying a different property.
b) Married couples who have been separated and are living apart.

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3
Q

Do HDB flat owners automatically qualify for the OOC tax rate?

A

Yes, HDB flat owners automatically qualify.

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4
Q

Can an owner occupy their property while partially renting it out or using it as a home office and still qualify for the OOC?

A

Yes, property can be owner-occupied even if it is partially rented out or used as a home office.

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5
Q

What are the conditions for receiving the OOC when demolishing and building a new house?

A

a) OOC is accorded for the duration of the works (maximum of 2 years).
b) The land must not be occupied.
c) No rent or fee is charged or received for the occupation or use of the land or any part thereof.
d) The owner must not enjoy the OOC on another property during the remission period.
e) The replacement house must be owner-occupied for at least one year following the Temporary Occupation Permit (TOP) date or the Certificate of Statutory Completion (CSC) from the Building Authority.

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6
Q

How is property tax calculated for vacant lands, under construction, non-residential properties, and serviced apartments?

A

Property Tax = 10% x Annual Value.

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7
Q

What is the formula for calculating the Annual Value (AV) of hotels?

A

i) AV (Hotel) = 25% of gross receipts from hotel rooms in previous years.
ii) Property Tax = 10% of Annual Value.

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8
Q

How is the AV of hotels with food & beverage outlets or other lettable areas calculated?

A

AV (Hotel) = 25% of gross receipts from hotel rooms.
AV (Outlets) = Based on estimated market rent.
Property Tax = 10% of the total Annual Value.

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9
Q

How is the annual value (AV) of freehold land calculated?

A

AV = 5% of the Freehold Value.

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10
Q

What is Stamp Duty?

A

Stamp Duty is a tax on documents related to immovable properties, stocks, or shares.

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11
Q

Who pays stamp duty for the acceptance of an OTP and S&P Agreement?

A

The purchaser is responsible for paying stamp duty.

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12
Q

Who is liable to pay stamp duty for a transfer by way of gift or exchange?

A

The seller is responsible (where Seller’s Stamp Duty is payable).

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13
Q

Who pays stamp duty for an assignment?

A

The transferee or beneficiary pays the stamp duty.

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14
Q

Who pays stamp duty on mortgage documents?

A

The mortgagor or borrower pays the stamp duty.

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15
Q

Who is responsible for paying stamp duty on lease or tenancy agreements?

A

The lessee or tenant pays the stamp duty.

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16
Q

What transfers are exempt from paying stamp duty?

A

A Will
Intestate Succession Act
Administration of Muslim Law Act

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17
Q

Is stamp duty payable on duplicate lease or tenancy agreements?

A

No, there is no stamp duty payable on duplicate lease or tenancy agreements.

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18
Q

Why must stamp duty be paid?

A

According to S52 of the Stamp Duties Act, documents not duly stamped are inadmissible as evidence in court.

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19
Q

What is the deadline for paying stamp duty for documents signed in Singapore?

A

Stamp duty must be paid within 14 days after the date of the document.

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20
Q

What is the deadline for paying stamp duty for documents signed overseas?

A

Stamp duty must be paid within 30 days after receiving the document in Singapore.

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21
Q

What is the penalty for delaying stamp duty payment for up to 3 months?

A

The penalty is $10 or an amount equal to the duty payable, whichever is greater.

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22
Q

What is the penalty for delaying stamp duty payment exceeding 3 months?

A

The penalty is $25 or 4 times the stamp duty payable, whichever is greater.

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23
Q

How is outstanding stamp duty recovered?

A

The outstanding duty will be recovered without prior notice by appointing your bank, employer, tenant, or lawyer as an agent to pay IRAS.

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24
Q

What is the basis for applying Buyer’s Stamp Duty (BSD)?

A

BSD is applied based on the purchase price or market value of the property, whichever is higher.

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25
Q

What is the BSD rate for the first $180,000 of a residential property?

A

1%.

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26
Q

What is the BSD rate for the next $180,000 of a residential property (from $180,001 to $360,000)?

A

2%.

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27
Q

What is the BSD rate for the next $640,000 of a residential property (from $360,001 to $1,000,000)?

A

3%.

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28
Q

What is the BSD rate for the next $500,000 of a residential property (from $1,000,001 to $1,500,000)?

A

4%.

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29
Q

What is the BSD rate for the next $1,500,000 of a residential property (from $1,500,001 to $3,000,000)?

A

5%.

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30
Q

What is the BSD rate for the remaining amount over $3,000,000 for residential properties?

A

6%.

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31
Q

What is the BSD rate for the first $180,000 of a non-residential property?

A

1%.

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32
Q

What is the BSD rate for the next $180,000 of a non-residential property (from $180,001 to $360,000)?

A

2%.

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33
Q

What is the BSD rate for the next $640,000 of a non-residential property (from $360,001 to $1,000,000)?

A

3%.

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34
Q

What is the BSD rate for the next $500,000 of a non-residential property (from $1,000,001 to $1,500,000)?

A

4%.

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35
Q

What is the BSD rate for the next $1,500,000 of a non-residential property (from $1,500,001 to $3,000,000)?

A

5%.

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36
Q

What is the BSD rate for the remaining amount over $3,000,000 for non-residential properties?

A

5%.

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37
Q

What is ABSD based on?

A

ABSD is based on the purchase or market value of the property, whichever is higher.

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38
Q

What are the ABSD rates for Singapore Citizens buying residential properties?

A

1st Property: 0%
2nd Property: 20%
3rd & More Properties: 30%

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39
Q

What are the ABSD rates for Permanent Residents (PR) buying residential properties?

A

1st Property: 5%
2nd Property: 30%
3rd & More Properties: 35%

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40
Q

What are the ABSD rates for foreigners buying residential properties?

A

1st Property: 60%
Company: 65%

41
Q

What discount applies to developers regarding the ABSD?

A

Developers pay 5% ABSD plus a 35% charge, subject to IRAS’s remission policy.

42
Q

What is the treatment for nationals from Free Trade Agreement countries?

A

They receive the same treatment as Singapore Citizens.

43
Q

Which countries’ nationals or permanent residents are treated as Singapore Citizens for ABSD purposes?

A

United States of America
Switzerland
Liechtenstein
Norway
Iceland

44
Q

What counts as residential property ownership for ABSD?

A

The property count includes:

Contracts or Agreements for properties not yet transferred.
Partial or joint ownership (each interest counts).
Partial or wholly-owned residential units or buildings.
Multiple purchases under one contract (each property is counted separately).

45
Q

Are residential properties gazetted for compulsory acquisition included in the property count for ABSD?

A

No, they are excluded.

46
Q

When does ABSD apply for acquiring residential property?

A

ABSD applies for acquisitions through:
a) Direct purchase
b) Gift
c) Declaration of trust where the beneficial interest is vested in the beneficiary
d) Exchange

47
Q

What is the definition of residential property according to the Master Plan zoning?

A

Includes:
a) Residential
b) Residential with commercial at the 1st storey
c) Commercial & residential
d) White
e) Residential / Institution

48
Q

What happens when co-purchasers have different citizenship statuses?

A

The higher applicable ABSD rate will apply (e.g., SC & Foreigner incurs a 60% ABSD).

49
Q

What is the rule applied to married couple purchasers with different citizenship statuses?

A

The higher applicable ABSD rate will apply, and they may apply for remission or refund.

50
Q

What are the conditions for ABSD remission?

A

It is applicable for cases with a Singapore Citizen spouse when purchasing their 1st residential property.

51
Q

What are the conditions for an ABSD refund for families?

A

Applicable for cases with a Singapore Citizen spouse.
Purchase of 2nd property with ABSD paid.
Sale of 1st residential property within 6 months.
The couple must not have further purchased any residential properties thereafter.

52
Q

What are the eligibility requirements for a 55-year-old single Singapore Citizen purchasing property?

A

Current private residential property owner.
Purchase a lower value private residential property.
Sale of the first residential property within 6 months and did not purchase any residential properties thereafter.

53
Q

What is the requirement for developers to qualify for ABSD remission?

A

ABSD remission applies if the developer is constituted as a company and must:

Sale License: Complete and sell all units within 5 years.
Non-Sale License: Complete and sell all units within 3 years for developments with 4 or fewer units.
Produce the qualifying certificate and housing developer’s license within 2 years from the contract date.
Provide proof of piling, foundation works, and any demolition works within 2 years of the contract date.

54
Q

When is ABSD payable for developers?

A

ABSD is payable immediately upon expiry of the stipulated periods at a rate of 5% + 35% with interests.

55
Q

What is the ABSD rate for developers acquiring residential properties with no intention to develop?

A

Developers pay an ABSD rate of 35%.

56
Q

What triggers the need to pay Seller’s Stamp Duty (SSD)?

A

SSD is payable if the purchased residential property was sold or disposed of within the holding period on and after 11 March 2017.

57
Q

What are the SSD rates based on the holding period?

A

1st Year: 12%
2nd Year: 8%
3rd Year: 4%

58
Q

How is the SSD amount determined?

A

SSD is based on the actual price or market value of the property, whichever is higher.

59
Q

What types of acquisitions or disposals are included in SSD calculations?

A
  1. Transfer made by way of collective sale
  2. Mortgagee Sale
  3. Gift or Exchange
  4. Under declaration of trust where the beneficial interest in the property passes to the beneficiary.
60
Q

What are some exemptions from SSD?

A

a) Residential properties gazetted for compulsory acquisition.
b) Bankruptcy or involuntary winding up.
c) Inheritance where the date of original purchase by the deceased exceeds the SSD period.

61
Q

How is the “Date of Purchase” determined for SSD?

A

The Date of Purchase is based on when the buyer exercises the OTP or S&P Agreement, whichever is earlier.

62
Q

How is the “Date of Sale” determined for SSD?

A

The Date of Sale is based on when the next buyer exercises the OTP or S&P Agreement, whichever is earlier.

63
Q

When does Seller’s Stamp Duty (SSD) apply to industrial properties?

A

SSD is payable if the industrial property (B1/B2) is sold within 3 years of purchase/acquisition on or after 12th January 2013.

64
Q

What are the SSD rates based on the holding period for industrial properties?

A

1st Year: 15%
2nd Year: 10%
3rd Year: 5%

65
Q

How is the SSD amount determined?

A

SSD is based on the actual price or market value of the property, whichever is higher.

66
Q

What types of transactions are included in acquisition or disposal for SSD?

A

Transfer made by way of collective sale
Mortgagee sale
Gift or exchange
Under declaration of trust where the beneficial interest in the property passes to the beneficiary.

67
Q

What are the exemptions from SSD for industrial properties?

A

a) Residential properties gazetted for compulsory acquisition.
b) JTC Enbloc Redevelopment Scheme / JTC Selective Buyback Scheme.
c) Bankruptcy or involuntary winding up.
d) Inheritance where the date of original purchase by the deceased exceeds the SSD period.

68
Q

How is the “Date of Purchase” defined for SSD purposes?

A

The Date of Purchase is based on the date the buyer exercises the OTP or S&P Agreement, whichever is earlier.

69
Q

How is the “Date of Sale” defined for SSD purposes?

A

The Date of Sale is based on when the next buyer exercises the OTP or S&P Agreement, whichever is earlier.

70
Q

What is a Property-Holding Entity (PHE)?

A

A PHE is a company that owns Singapore residential properties where the properties are its primary tangible assets.

71
Q

What triggers the application of Additional Conveyance Duty (ACD)?

A

ACD applies when:

A person or company is buying or selling shares or units (“equity interests”).
There is a sale or purchase of residential real estate in property-holding entities (PHE).
Current owners of PHE or those who become PHEs after the purchase.

72
Q

What are the duties applicable for buyers under the Additional Conveyance Duties for Buyers?

A

Existing Buyer’s Stamp Duty at rates ranging from 1% to 6%.
Additional Buyer’s Stamp Duty at a flat rate of 65% along with the BSD (effective from 27th April 2023).

73
Q

What is the Seller’s Stamp Duty for sellers of a PHE?

A

The Seller’s Stamp Duty is 12% (flat rate) if sold within 3 years.

74
Q

What is the mortgage stamp duty rate for mortgages granted from 22 February 2014?

A

0.4% of the loan amount granted, subject to a maximum duty of $500.

75
Q

What is the mortgage stamp duty rate for variations to a mortgage?

A

0.4% of the loan amount granted on the mortgage, also subject to a maximum duty of $500.

76
Q

What is the mortgage stamp duty rate for equitable mortgages?

A

0.2% of the loan amount granted on the mortgage, subject to a maximum duty of $500.

77
Q

What is the stamp duty for the transfer, assignment, or disposition of any mortgage or debenture?

A

0.2% of the amount transferred, assigned, or disposed, inclusive of interest in arrears, subject to a maximum duty of $500.

78
Q

What is the Lease Duty rate if the Average Annual Rent (AAR) does not exceed $1,000?

A

Exempted from Lease Stamp Duty.

79
Q

What is the Lease Duty rate if the AAR exceeds $1,000 with a lease period of 4 years or less?

A

0.4% x Rent Rate x Total Months.

80
Q

What is the Lease Duty rate if the AAR exceeds $1,000 with a lease period of more than 4 years or for any indefinite term?

A

0.4% x 4 x Annual Average Rent.

81
Q

What does AAR refer to?

A

AAR refers to the higher of the average annual contractual or annualized market rent, including other charges.

82
Q

What other considerations are included in the AAR?

A
  1. Advertising and Promotion charge
  2. Furniture / Fittings charge
  3. Maintenance charge
  4. Service charge
  5. Any other charges, excluding GST.
83
Q

What is the GST treatment for the sale and lease of residential properties?

A

The sale and lease of residential properties are exempt from GST.

84
Q

What is the GST treatment for the sale and lease of non-residential properties?

A

The sale and lease of non-residential properties are subject to GST.

85
Q

For properties with both residential and non-residential portions, how is GST charged?

A

GST is charged only on the non-residential portion.

86
Q

Is GST charged on furnished residential properties?

A

Yes, GST is charged on the supply of movable furniture and fittings.

87
Q

What types of fixtures are exempt from GST?

A

Fixtures such as built-in cabinets, wardrobes, kitchen and sanitary wares, and wall-mounted air conditioners are exempt from GST if they are permanently attached to the residential property.

88
Q

Do I have to account for GST on the sale of a furnished residential property?

A

a) Sale of bare residential property is not subject to GST (exempt supply).
b) GST is chargeable on the supply of any movable furniture and fittings.
c) The selling price should be apportioned based on the value of furniture and fittings and the value of the bare property.

89
Q

Do I have to account for GST on the lease of a furnished residential property?

A

a) The rental of the bare residential unit is exempt from GST, but GST must be charged on the rental of furniture and fittings.
b) The annual value of the property is used to compute the rental value of the bare residential unit.
c) Monthly rental value of the bare unit = 1/12 of the annual value of the property.
d) Monthly rental value of furniture and fittings = Difference between monthly gross rent and 1/12 of the annual value of the property.

90
Q

What if the actual gross rental is lower than 1/12 of the annual value of the property?

A

If the actual gross rental is lower, you do not need to charge GST on the rental of furniture and fittings.

91
Q

What is considered rental income?

A

Rental income is defined as the full amount of rent received.

92
Q

What is the income tax rate applicable to rental income?

A

Rental income is subject to income tax of up to 24%.

93
Q

What are some claimable expenses against rental income?

A

Expenses that can be claimed include:
a) Housing loan
b) Property tax
c) Fire insurance
d) Repairs
e) Maintenance
f) Costs of securing tenants
g) Costs of supervision or management fees
h) Furniture and fittings
i) Internet charges/expenses
j) Utility expenses
k) Expenses incurred on properties that are not generating rental income.

94
Q

How is rental income taxed for joint owners of a rented property?

A

Rental income is taxed on all joint owners based on their legal share in the property.

95
Q

Does it matter which party receives the rent when taxing joint owners?

A

No, it does not matter which party receives the rent or whether the owners paid for the property.

96
Q

How is rental loss apportioned among joint owners?

A

Rental loss is also apportioned to joint owners based on their legal share in the property.

97
Q

Are capital gains from the sale of property generally taxable?

A

No, capital gains are generally not taxable.

98
Q

When are capital gains from property deemed taxable?

A

They are considered taxable income when a person is deemed to be trading in properties.

99
Q

What does the IRAS consider when assessing if one is trading in properties?

A

IRAS looks at individual circumstances including:

Frequency of transactions (buying and selling properties)
Reasons for acquiring and selling property
Financial means to hold the property for the long term
Holding period of the property.

Real Estate (19 decks)

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