How Budget 2024 Impacts Singapore Homeowners: Exciting Property Tax Updates and ABSD Benefits
TLDR The 2024 Budget introduces changes to property tax bands, aiming to ensure fair taxation based on Annual Value (AV)...
Read More
TLDR
The 99-to-1 property ownership split in Singapore, where one spouse holds 99% and the other 1%, is used to reduce Additional Buyer’s Stamp Duty (ABSD) when buying multiple properties. However, a recent High Court case (Hillcrest Arcadia) revealed that beneficial ownership depends on actual financial contributions, not just title shares. The court indicated that intending to use this split to avoid ABSD could be unlawful, even if not penalized when the plan is unexecuted. The Inland Revenue Authority of Singapore (IRAS) may audit and impose heavy penalties if tax avoidance is detected, with no time limit on such audits. Despite this, many buyers are misled about the risks by agents or lawyers. Buyers should seek clear advice and understand the risks before using this strategy, especially as penalties have become more severe with rising property prices. Personalized, data-driven real estate guidance is recommended for making informed buy, sell, or wait decisions.
The 99-to-1 property ownership split, a strategy commonly used in Singapore for over a decade, involves one co-owner (typically a spouse) holding 99% of a property, while the other holds 1%. The underlying intention is that when funds become available for each to own a separate property, the 1% share is transferred to the other spouse. This theoretically incurs Buyer’s Stamp Duty (BSD) only on the 1% portion, allowing the spouse who now has a “zero” property count to purchase a second property without incurring Additional Buyer’s Stamp Duty (ABSD). This has long been a cornerstone of the “sell one, buy two” strategy. However, a recent High Court case has cast light on the legality of this practice.
The Hillcrest Arcadia Case:
In a notable case, a couple purchased a Hillcrest Arcadia condo with a 99:1 ownership split. The female spouse claimed 99% ownership, as stated on the title. The relationship, however, dissolved less than a year later. When the couple split, she asserted full ownership of her 99% share.
However, the High Court intervened. The judge ruled that based on the boyfriend’s financial contributions, he effectively owned 54% of the property. This decision undermined her 99% claim, emphasizing that financial contributions, not just paper titles, determine beneficial ownership.
More significantly, the case revealed a crucial detail: “The pair admitted that they planned for Mr Ngor to transfer and pay taxes on his one per cent share to Ms Wong when they decide to buy a second property. Justice Lee said there was no nefarious intention or knowledge that this would be an unlawful act. Moreover, the plan was never carried out.”
The phrase “would be an unlawful act” is key. It suggests that while the Court did not penalize them (as the plan was unexecuted), it implicitly deemed the intention to circumvent ABSD through this method as problematic.
Official Stance on 99-to-1 Splits:
A parliamentary response further clarifies the official stance: “Whether a ‘99-to-1’ arrangement involves tax avoidance depends on the facts and circumstances surrounding the specific case. Should IRAS determine that tax avoidance has occurred, 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. There is no statutory time limit for stamp duty audits.”
This indicates that while a 99-to-1 tenancy-in-common split is not inherently illegal, its contrived use specifically for tax avoidance can be challenged by authorities.
Lack of Clear Communication to Buyers:
Despite this nuanced reality, many buyers report being assured by property agents or lawyers that the 99-to-1 strategy carries no risks. This often leads to buyers unknowingly entering a legal “grey area,” only to face audit letters and potential penalties later.
There is a pressing need for more transparent communication regarding the risks associated with such strategies. If a 99-to-1 split is recommended, all potential risks, not just the perceived benefits, should be clearly articulated to buyers. In 2025, with higher property prices, the penalties for tax avoidance could be substantial, making it even more critical for buyers to be fully informed.
Should You Buy, Sell or Wait?
If you’re reading this, you must be trying to figure out the best course of action right now: is it the right time to buy or sell?
It’s difficult to give an exact answer since everyone’s situation is unique and what works for one person may not necessarily work for you.
I can bring you a wealth of on-the-ground experience and a data-driven approach to provide clarity and direction. From beginners to experienced investors, our top-down, objective approach will help you on your real estate journey.
I can help you by:
- Offering Strategic Real Estate Advice – I can help create a comprehensive plan to guide you through your property journey.
- Connecting Your Home with the Perfect Buyers – Through stunning visuals, an effective communication strategy, and an in-depth knowledge of the market, we’ll ensure your home is presented in the best possible way to fulfill your goals.
You May Also Like …
5 Factors : Why Now Is The Perfect Time To Invest In Singapore Property
Investing in property is an excellent way to build wealth and secure a stable source of passive income. If you...
Read More
Downsizing From A Spacious 4-Bedroom Condo To A Cozy 2-Bedder: How I Chose A Condo Over A HDB
TLDR Mdm Sim's decision to trade her four-bedroom house for a two-bedroom condo is explored, highlighting the benefits of right-sizing....
Read More
Singapore’s Aging Population: Is the Housing Market Ready?
TLDR Singapore is rapidly aging, with one in four citizens expected to be over 65 by 2030. Current housing models,...
Read More
Freehold vs. Leasehold Condos in 2025: An Updated Performance Analysis
TLDR Freehold vs. leasehold condos in Singapore show nuanced performance differences over the past decade. Leasehold units often deliver stronger...
Read More
6 Misleading Claims Property Agents Often Make That Savvy Buyers Are Aware Of
TLDR Real estate agents can sometimes use deceptive tactics to push sales. Be cautious of claims about other interested buyers,...
Read More
Is The Condo Dream Getting Increasingly Harder To Achieve For Singaporeans?
TLDR Condominium prices in Singapore have nearly doubled over the past 15 years, with new launches now averaging around $2,390...
Read More
Top 5 Factors: Singapore Property Market: Attractive Investment Opportunity Despite Cooling Measures
The Singapore property market has always been a popular investment choice for both local and foreign investors, thanks to its...
Read More
5 Untold Risks Of Buying An Old Freehold Condo In Singapore
TLDR Old freehold condos in Singapore may seem attractive due to lower prices, but they come with hidden pitfalls. Longstanding...
Read More
Are Resale HDBs Really Unaffordable In 2025?
TLDR Singapore’s housing debate is fueled by headlines about million-dollar flats, but most resale 4-room flats in over 10 estates...
Read More
Unseen Dangers of Putting Your Money in Upscale Freehold Properties in Singapore
TLDR Luxury freehold properties in Singapore may not always be the lucrative investment opportunities they appear to be. High-end properties...
Read More
Top 5 : Exploring the Streets of Singapore – A Journey Beyond Just Shopping!
Singapore, a vibrant city-state known for its diverse culture and rich history, offers a plethora of unique experiences that go...
Read More
HDB Owners Have Identified This Reason as the Primary Barrier to Upgrading in 2024. Surprising? Not Really.
TLDR High property prices in Singapore make it difficult for most to upgrade from HDB flats to private condos, despite...
Read More
Top 5 : Most Profitable Neighborhoods To Invest In For Singapore Property Investment 2025
As the global economy continues to recover, the real estate market in Singapore remains a promising investment opportunity for savvy...
Read More
What is Your Next Step in the Property Market?
When you flip open the papers or turn on the news nowadays, the common buzzwords are "INFLATION", " INTEREST RATE...
Read More
2024 Will Be A Buyers Market
TLDR 2023 saw a roller-coaster ride in the real estate market, with various challenges like high interest rates and geopolitical...
Read More
7 Essential Steps to Sell Your House in Singapore
TLDR When preparing to sell your house, research the average prices in your area for a realistic figure. Consider factors...
Read More
Top 5 Best Unique Nighttime Experiences in Singapore
Singapore, a vibrant city-state known for its stunning skyline and diverse culture, truly comes alive at night. As the sun...
Read More
5 Reasons : Can Your Real Estate Investment Hedge Against Inflation?
Inflation is an economic phenomenon that can have a significant impact on an individual's financial well-being. As the cost of...
Read More
What Happens To Your Housing Loan Once You Sell Your House?
TLDR When selling your home in Singapore, ensure you pay off your outstanding home loan, refund any CPF monies used,...
Read More
