One of the cooling measures introduced to cool down the property prices is by far considered the most effective measure much to the chagrin of buyers and investors and that is the ABSD.  The imposition of ABSD kind of completely axed the spirit of the buyers/investors.

But, as always, even in this case, people are coming up with some loopholes to evade these taxes and yet speculate in the property market. Some even take drastic measures.

Home owners are resorting to these measures because the savings can be substantial.  A Singaporean buying a second home will have to pay a 7 per cent ABSD, while permanent residents (PRs) pay 10 per cent.

A Law firm had told The Straits Times that they are seeing a few cases where couples "decouple" their property.  The firm has fielded quite a number of queries, and is already acting in a few decoupling cases. The law firm spokesperson highlighted that the people who approached them want to transfer everything to one party so that the other party can buy without the burden of the ABSD, dissolving the co-ownership / part ownership.

Although the Government said that it’s a temporary measure still people are taking pre-emptive action," he added.

Let’s try to understand this and analyze the pros and cons of taking this step.

When there are multiple owners of a property, and one of the owners buys over the share of the other owners. It’s called Part Purchase

When the property is co-owned by a couple who are husband and wife, and if they de-couple, they no longer remain co-owners /part- owners, instead they transfer everything to one party so that the other party can buy without the burden of the ABSD.

Decoupling is essentially a specific form of part purchase. It’s important to note that the transferring of a half share to one of the co-owners is still subject to the standard stamp duty rate of 3 per cent, as it is considered a transaction.

Stamp duty is payable in a part purchase;  As per the current market governing rules.
The stamp duty (including Buyer’s Stamp Duty, Additional Buyer’s Stamp Duty and Seller’s Stamp Duty) is determined by:-

• The valuation price; and

• The share in the property transferred

Please note: Stamp duty is payable even for transfers by way of a gift


CPF monies
• If CPF monies were used in the purchase, it needs to be refunded to the CPF account of the seller/transferor

Existing mortgage
• As banks usually require notice of 3 months for redemption, interest in lieu of notice usually needs to be paid

• To decide completion date carefully as there may be pre-payment penalties involved


The drafting of the Sale and Purchase Agreement takes around 3 days.

• NRICs/ Passports of all parties;

• Address of the property; and

• Valuation report

• If bank loan and/or CPF funds are required to buy over the share: 8 to 12 weeks

• If no bank loan and no CPF funds are required to buy over the share: 2 weeks (the purchaser must have the funds to pay for 95% of the share)

How much deposit needs to be paid?

• Usually 5% of the purchase price

• May be paid directly to the seller without going through the lawyers

When can the seller purchase another property (for the purposes of ABSD)?

• The date of the Sale & Purchase Agreement (S&P) is the date that the seller is deemed to have sold 
   the property. Thus, upon signing the S&P, he can go ahead and purchase another property.

• However, if the seller is using CPF funds to finance the new purchase, then completion of the part
  purchase (i.e. transferring of the property to one owner’s name), must take place at least 3 weeks
  before the payment of CPF for the seller’s new purchase.


Bankruptcy Issue
Under the Bankruptcy Act, if:-

• An individual enters into a transaction at an undervalue, or if he makes a gift (section 98)

·   for a 5 year period (section 100)

• The transaction is declared null and void (for undervalue transactions), or the gift vests in

   the Official Assignee (for gifts) (section 102)

• should the individual subsequently become a bankrupt

Therefore, such transactions should always be done at actual value based on a valuation

report done by an established valuer (i.e. cannot pay a valuer to value the property at a

lower figure).

If transfer is by way of a gift, it would be difficult to find potential buyers within the first 5



Many married couples make use of decoupling as a way to avoid paying ABSD

For Example:

If Husband and wife own one property and the wife transfers her share of the property to her husband. After which, the wife purchases a new property, the wife does not have to pay ABSD (as the new property would be her first property)

In the unfortunate event that; this couple go for a divorce, it is possible that there may be a dispute relating to property as
Wife can argue that both properties are her matrimonial assets


Husband can argue that he paid his wife fully, and the first property belongs to him fully.

Real estate lawyers say there are also non-monetary considerations.

In the event of divorce, for example, the couple may need to have a trust deed in place to protect the exiting party’s share in the property.

Secondly, not everyone who goes through the decoupling process will be able to enjoy substantial savings because when the remaining owner takes over the exiting owner’s share, the remaining owner will be subject to a stamp duty of 3 per cent.

The process of striking off the exiting owner’s name from the title deed will also incur legal costs.

So all in, the transfer of ownership could cost S$30,000 for a one million dollar property.

That’s why some lawyers say that beyond the flurry of enquiries, the actual number of such transactions has not spiked significantly.

Thirdly, The sole co-owner, the one that stays behind, will then have to relook at the loan, look at the viability of continuing the loan in his own name And obviously, what he can get in terms of his loan, the tenure of the loan, the loan to value ratios - will all be based on current levels, rules that are more stringent than before (compared to) when they first bought the property.

These owners may think that it is a smart move to take advantage of the loophole, without knowing that they are doing so at their own risk.

For one thing, the law will see them giving up their share of the property on their own free will. It implies that, in the event of any dispute in the future, they have no right to claim their share of any rental return or any profit from the sale of the property, regardless of the amount they have contributed to the initial deposit and mortgage installments of the property.

Thus, before you go through the process of Part Purchase / De coupling, it’s wise to weigh the pros and cons. Always consult a lawyer who would be able to guide you’ll in these matters in an efficient manner.