Inland Revenue Authority of Singapore

Iras to claw back S$60 million from buyers who used ‘99-to-1’ loophole to avoid ABSD

As of April 2024, the Inland Revenue Authority of Singapore (IRAS) has identified 166 instances of tax avoidance related to the purchase of private properties, resulting in approximately S$60 million in Additional Buyer’s Stamp Duty (ABSD) and surcharges to be reclaimed. Deputy Prime Minister and Minister for Finance Lawrence Wong disclosed this information on Tuesday, May 7, highlighting the use of the “99-to-1” arrangement by certain property buyers to diminish their ABSD obligations.

Responding to a parliamentary inquiry, Wong explained that when property transactions are structured to evade taxes, the Commissioner of Stamp Duties has the authority to treat them as a single collective purchase and recover the appropriate amount of ABSD, along with a 50% surcharge.

By April, IRAS had concluded its assessment of 187 such 99-to-1 cases, determining that 166 of them indeed involved tax avoidance. Wong further noted that approximately 10 cases, showing potential involvement of property agents, are currently under scrutiny by the Council for Estate Agencies.

Senior Minister of State for Finance Chee Hong Tat, in a parliamentary session last year, mentioned that about 0.5% of private residential property transactions between 2018 and 2021 employed 99-to-1 or analogous purchase arrangements. Depending on the gravity of the offense, agents implicated in such breaches may face financial penalties or suspension of their registrations, Chee added.

The Business Times

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