1. Is stamp duty, transfer tax or a similar tax payable on the direct sale, purchase or leasing of real estate? If so, what are the rates and who is required to pay the duty or tax?

Yes, stamp duty is applicable on instruments for the sale, purchase or lease of immovable property in Singapore.

For a sale or purchase of residential property, the following duties apply:

• Buyer’s stamp duty (BSD)
• Additional buyer’s stamp duty (ABSD)
• Seller’s stamp duty (SSD) for residential property

For a sale or purchase of non-residential property, the following duties apply:

• BSD
• SSD for industrial property

Lease

Generally, for the grant of a lease of immovable property in Singapore with fixed rent, the tenant is required to pay stamp duty based on the higher of contracted rental or the market rental at the following lease duty rates (from February 22, 2014):

Table A

A lease with premium is one for which there is a lump-sum payment. Stamp duty is payable on the premium based on the BSD rates.

If there is a rental element in addition to the premium, stamp duty is payable on the rental based on lease duty rates.

Sale or purchase

For a sale or purchase of immovable property in Singapore, the following duties are payable on the relevant instrument(s):

Residential property

BSD: The purchaser of the property is required to pay BSD based on the higher of the purchase price or the market value of the property, which is generally payable at the following rates (assuming a date of purchase on or after February 15, 2023):

Table B

ABSD: The purchaser of the residential property may also be required to pay ABSD in addition to BSD, once again based on the higher of the purchase price or the market value of the property, depending on the profile and residency status of the purchaser and the relevant count of residential properties, as follows (assuming a date of purchase on or after April 27, 2023):

Table C

SSD for residential property: The seller of the property may be required to pay SSD based on the higher of the sale price or the market value of the property, depending on the seller’s holding period (from the date of purchase to date of sale) of the property, as follows:

Table D

Non-residential property

BSD: The BSD for non-residential property is payable by the purchaser payable at the following rates (assuming a date of purchase on or after February 15, 2023):

Table E

SSD for industrial property: The seller of the property may be required to pay SSD depending on the seller’s holding period of the property, as follows (assuming a date of purchase on or after January 12, 2013):

Table F

2. Is stamp duty, transfer tax or a similar tax payable on the indirect sale or purchase of real estate, e.g., by means of the sale of an SPV which holds real estate in the jurisdiction? If so, what are the rates and who is required to pay the duty or tax?

Effective from March 11, 2017, additional conveyance duties (ACD) apply to the purchase or sale of shares or units ("equity interests") in property-holding entities (PHEs) that hold interest directly or indirectly in prescribed immoveable property as defined by the regulations in Singapore.

A PHE is an entity which has at least 50% (i.e. asset ratio) of its total tangible assets comprising prescribed immovable properties (PIP) in Singapore. A PHE can be a Type 1 PHE, a Type 2 PHE or both.

PIP means any immovable property that is –

1. zoned or situated on land that is zoned “Residential”, “Commercial and Residential”, “Residential/Institution”, “Residential with Commercial at 1st Storey”, or “White”.
2. permitted to be used by a written permission given under section 14(4) of the Planning Act (not being one that is given for a period of 10 years or less) or notification given under section 21(6) of the Planning Act for solely residential purposes or for mixed purposes one of which is residential; or
3. used for solely residential purposes or for mixed purposes one of which is residential, in a case where the property was so used on February 1, 1960 and has not been put to any other use since that date, and where such use is not the subject of a written permission or notification mentioned in paragraph (b).

The ACD applies to the purchase or sale of equity interests by persons or entities who are significant owners of the PHE, or who become so after the purchase.

ACD for equity interests in PHEs: In addition to existing stamp duty for shares, ACD applies to qualifying transfers of equity interests in a PHE as follows, based on the prevailing market value of the PHE’s underlying residential property at the time of the qualifying equity transfer, pro-rated by the percentage of the beneficial interest transferred in the PHE:

1. Additional conveyance duties for buyers (ACDB): Existing BSD at 1% to 6%; and ABSD at 65% (flat rate)
2. Additional conveyance duties for sellers (ACDS): SSD at 12% (flat rate)

3. Is value added tax, goods and services tax or a similar tax payable on the sale or purchase of real estate, and the letting of real estate? If so, what are the rates and who is required to pay the tax?

The sale and lease of properties in Singapore are taxable supplies for the purposes of Singapore Goods and Services Tax, except for residential properties. GST-registered persons or persons required to be registered for GST are required to account for 9% GST on standard-rated taxable supplies.

The sale and lease of residential properties are exempt supplies (i.e., no GST is applicable). However, supplies of movable furniture and fittings in both residential and non-residential properties in Singapore are taxable.

4. Are there any annual taxes that may be payable on the ownership of real estate, e.g., annual land tax, municipal taxes, surtaxes, etc.?

Property tax is imposed on the annual value of immovable properties in Singapore. The annual value of a property is generally derived based on the estimated annual rent the property could fetch if it were rented out on an unfurnished basis.

As of January 1, 2024, property tax rates are applied on a progressive scale from 0% to 32% for owner-occupied residential properties, and from 12% to 36% for non-owner-occupied residential properties. For non-residential properties, such as commercial and industrial buildings and land, the property tax rate is 10%.

5. What is the tax rate imposed on rental income?

There is no specific tax rate on rental income, which is taxed at the local personal income tax rates (progressive; currently from 0% to 24%) or the local corporate income tax rate (currently 17%), as the case may be.

6. Is interest on borrowings used to acquire real estate deductible for tax purposes against rental income? If so: (i) are there any restrictions, such as thin capitalization, transfer pricing or interest limitation rules; and (ii) is there any withholding tax on interest?

Deductions are allowed in Singapore on expenses that are incurred wholly and exclusively in the production of the rental income and during the period of tenancy. In this regard, interest paid on the loan taken to purchase the property that is rented out is generally tax deductible.

There are no thin capitalization rules in Singapore. Loans entered into between related parties are, however, subject to transfer pricing rules, under which interest is to be determined for tax purposes at an arm’s-length rate.

The withholding tax rate on interest paid to non-residents in connection with any loan or indebtedness is 15%, subject to any reduced rates in any applicable avoidance of double taxation treaties.

7. Are deductions for capital expenditure available against rental income for tax purposes, for example capital allowances or deductions for depreciation? If so, are deductions available for expenditure on both land and buildings, or on buildings only?

The Land Intensification Allowance (LIA) allows for claims on qualifying capital expenditure incurred on the construction or renovation of a qualifying building or structure.

If applicable, Capital Allowances are deductions claimable for the wear and tear of fixed assets that qualify as “plant and machinery” used in one’s company’s trade, business or profession. Capital allowances are generally granted in place of depreciation, which is not deductible.

It should be noted that the Industrial Building Allowance (IBA) has been phased out since February 23, 2010.

There is no tax depreciation available on land.

8. Are there any other material restrictions on the costs and expenses which may be deducted in calculating a person's taxable rental income, e.g. transfer pricing or anti-hybrid rules?

Costs or expenses arising from related party transactions are subject to transfer pricing requirements. Further, while Singapore tax laws do not have specific anti-hybrid regulations, there is a general anti-avoidance rule that generally allows the Comptroller of Income Tax (CIT) to disregard transactions that have the purpose or effect of reducing or avoiding taxes, if the requisite conditions are met.

9. Are there any restrictions on the use, and/or the carry forward, of losses?

Unutilised trade losses may be carried forward indefinitely and deducted against future income, subject to the satisfaction of the continuity of substantial shareholders test, i.e., at least 50% of the relevant entity’s total number of issued shares must be beneficially owned by the same person(s) between the last day of the year in which the losses were incurred, and the first day of the year of tax assessment in which the losses are to be deducted.

10. Are capital gains arising on the direct sale of real estate taxable? If so, what are the rates and are there any exemptions?

This is dependent on the facts. Generally, there is no tax on capital gains in Singapore. Gains from the sale of real estate in Singapore will, however, be taxable if they are of an income nature.

Where the real estate is a foreign asset, the sale of the real estate may be subject to capital gains tax under Section 10L of the Income Tax Act 1947.

Under Section 10L, gains from the sale or disposal of foreign assets will be subject to tax, if such gains are received in Singapore by entities without economic substance provided that certain conditions are met.

11. Are capital gains arising on the indirect sale of real estate taxable, e.g. by means of the sale of an SPV which holds real estate in the jurisdiction? If so, what are the rates and are there any exemptions?

As explained above, generally there is no tax on capital gains in Singapore.

12. Is there a withholding tax on rental income?

There is no withholding tax imposed on rental income for immovable property.

13. Is there a withholding tax on capital gains derived from real estate? If so, does the withholding tax apply to both direct and indirect sales, or to direct sales only?

There is no withholding tax on capital gains derived from real estate, but this depends on whether the property has been held as a capital asset by the seller.

14. Does the jurisdiction have a REIT regime? If so, please outline the tax treatment of the REIT and the main conditions that must be satisfied to enter and remain within the regime.

Yes, Singapore has a REIT regime.

The trustee of a proposed/newly constituted REIT or its sponsor may apply for a tax transparency treatment in respect of the following income:

1. rental income; or
2. income from the management or holding of immovable properties (such as service charges and car park fees); or
3. rental support payment if such payment is on an open market value basis and is made by the seller of the property or any interest in the owner of the property, or a person who wholly owns (directly or indirectly) the seller; or
4. distribution from an approved sub-trust of the REIT in cash out of rental income or income from the management or holding of immovable property, income that is ancillary to the management or holding of immovable property, and rental support payment that is paid to the trustee of the sub-trust on an open market value basis on or after 29 December 2016 by the seller, the person who wholly owns the seller or any other person approved by the Comptroller; or
5. interest income from temporary short-term placement of surplus cash as deposits with banks in Singapore and investment in debt securities.

The CIT may agree not to charge the trustee of a REIT with any tax, and to subject the beneficiaries of the REIT to tax on the distribution received from the REIT. The main condition is that that the trustee distributes at least 90% of the taxable income of the REIT to the unit holders in the same year the income was derived by the trustee.

Otherwise, a trustee of a REIT is taxed at the prevailing corporate tax rate on its income. Where the tax transparency treatment applies, the specified income that is distributed to the unit holders will not be taxed in the hands of the trustee.

Whether the distribution is taxed in the hands of the unit holder will depend on the nature of the income from which the distribution is made by the REIT ETF and the type of unit holder.

15. Apart from REITs, are there any other tax-efficient real estate investment vehicles or structures which are commonly used to acquire, hold and exploit real estate in the jurisdiction?

Real estate investment vehicles in Singapore can be organised in the form of limited liability companies, variable capital companies or limited partnerships.

16. Are there any structures commonly used to mitigate real estate tax liabilities on acquiring and/or disposing of real estate?

It is common to structure transactions in real estate, particularly non-residential real estate, as indirect acquisitions to mitigate stamp duties. However, we wish to highlight that in Singapore, the laws on stamp study and income tax have both specific and general anti-avoidance provisions which should be carefully considered before any structure is adopted.

17. Are there any material differences in the way individuals and companies are taxed on acquiring, letting and/or disposing of real estate?

Individuals who acquire residential property on or after April 27, 2023 are subject to ABSD on a progressive rate between 0% to 60%, depending on the individual's profile, residency status and the relevant count of residential properties owned by him or her as at the date of purchase or acquisition. Conversely, companies will be subject to ABSD at a flat rate of 65%.

In addition, rental income received by individuals from the letting of their property from YA 2024 onwards will be subject to personal income tax at a progressive rate between 0% to 24%, depending on their income-earning capacity. In comparison, the prevailing corporate tax rate is 17%.

This guide does not constitute tax advice and readers should note that the laws of each jurisdiction are regularly refined and/or revised, so the statements made in this report are not definitive. However, this guide does provide a summary overview of the state of the law as at 31 January 2025 and will hopefully serve as a useful tool for investors to ensure they understand the unique provisions and distinctions in the various jurisdictions.