One of the most overlooked thing when upgrading from a HDB to a Private Property is Addtional Buyer Stamp Duty ( ABSD ). In short, ABSD is a additional tax payable, on top of the normal 3% Buyer Stamp Dyer ( BSD ) for property BELOW $1 million, and, 4% for property ABOVE $1 million.
Hence, if you are selling your HDB and buying your Private Property concurrently, because you are "owning" two properties at the same time, the ABSD will be payable upfront first before remission, where the ABSD will be refunded back to you have completed the sale of your current unit.
Be careful and be aware of this, as many buyers are caught of guard and having to pay that ABSD, in advance, in cash.
That is why many upgraders would opt to sell their current HDB first completely and asked for 3 months extension from the incoming owner, after the HDB completion of their current unit.
Only after the HDB completion of their current unit, will they be at 'zero' property and technically their next purchase will make them owning 1 property and avoid paying the ABSD.
This explanation can be confusing. That is why I am here to assist to clear any doubts you have on this ABSD.
If you are still unsure about this ABSD topic, contact us at +65(9062-2444).
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