99-to-1 Tenancy-in-Common

During the Singapore’s Budget this year, many Singaporean investors were disappointed that the government retained the current Additional Buyer Stamp Duty (ABSD). However, instead of wishing for the stamp duties to be reduced or removed, do you know you can actually beat the system without paying an arm or leg? In this article, I will share with readers on how to avoid paying the ABSD with Tenancy-in-Common.

Note that the strategy I am sharing here is not “decoupling” (Resale part-share) for HDB, a popular move which involves the transfer of HDB ownership between married couples. In any case, Singapore government has clamped down on decoupling and tightened the rules in April 2016 to ban the transfer of HDB flat ownership between married couples. However, private residential owners are not subject to this rule.


Background of ABSD

ABSD was introduced by Singapore government among a slew of property cooling measures to stabilize market prices. It was revised upwards in 2013 in light of escalating housing prices. Under this rule, home owners are required to pay ABSD if they are buying second property or if they are not Singapore citizens.

Many property investors may have come across articles on property cooling measures in Singapore. But many of these articles may not be helpful in enabling you to make asset planning. Through this article, readers would learn how to avoid paying hefty sum of money to the government through [This is a premium article. The rest of the content is blocked and can be accessible by SG Wealth Builder Members only. To read the full content, please sign up as member.]

Read my articles on HDB and property investments:

  1. Frightening HDB rules
  2. Managing your CPF proceeds from the sale of your HDB to build wealth
  3. HDB: The thin fine line between Joint Tenancy and Tenancy-in-Common

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5 thoughts on “99-to-1 Tenancy-in-Common

  • July 14, 2017 at 3:39 pm

    Yes, this 99-1 TIC looks good if the couple knows that nothing would occur from the time they sign the S &P to declare the mode of ownership to the time they purchase another property five years or more later to exploit this 99-1 to avoid ABSD. There is no different between a 99-1TIC and sole proprietorship. Sole proprietorship allows the other spouse to purchase another property without any encumbrances. Of course it has drawbacks e.g Non-owner spouse cannot use his/her CPF or take bank loans without getting the spouse to guarantee the loan.

    Which banks/CPF are so foolish to disburse funds or loans to someone owning only 1% ownership?

  • July 15, 2017 at 1:56 am

    EHHH …. I don’t understand….

    According to IRAS, whether joint ownership or partial ownership (i.e. tenancy-in-common), the existing property will still be counted as you having 1 residential property.

    ABSD is applied on 2nd and subsequent residential properties. Currently it’s 7% of valuation of 2nd property, and 10% of valuation of 3rd & subsequent properties.

    So even if you currently own 1% of your EC and 5 years later (if the rules still the same), you buy another condo as sole owner, IRAS will still come after you for 7% of the 2nd condo’s valuation. So how to profit? The only people profiting will be lawyers doing all your jumping thru conveyancing hoops, the property developers, property salesmen, and the govt.

    ABSD is not applicable for non-residential properties. So that is 1 avenue of property market to speculate without additional taxes. But again, not many people in Singapore well-versed with non-residential property investing, and not much guides or interest in it. Except for REITs — industrial, office, retail, hospitality, etc etc.

  • July 15, 2017 at 3:13 pm

    Hi Fred,

    Actually, the manner of holding has no bearing on the tenancy-in-common as loan repayment is a joint liability for the borrowers.
    The mortgage is issued based on the income of the borrowers and not on the share holding in the property.


  • July 15, 2017 at 3:16 pm

    Hi Sinkie,

    When the party holding 99% bought over the 1% from the other party, the latter is free to purchase a second property without paying ABSD.
    This is how the game is played. The applicable stamp duties or selling duties is applied on the 1% and not on the purchase price of the second property.
    In doing so, this is how investors made explosive profits.


  • July 21, 2017 at 1:33 pm

    Hi there,

    I am not sure on this because under the finance scheme, there may be grants involved and so HDB may not allow this type of arrangement.
    Maybe you can write in to HDB to clarify.


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