Things to know about the new ABSD (Trust): 35% rate and conditions for remission

Previously, when a residential property is transferred into a living trust, Buyer’s Stamp Duty(BSD) is payable. Depending on the profile of beneficial owner,  ABSD is also applicable. When there is no identical owner at the time of transferring the residential property, ABSD may not apply.

Now, with the latest change, a trustee have to pay ABSD even if there is no identical owner at the time of transferring the residential property.

According to the press release, “ABSD aims to promote a stable and sustainable property market, and as such, it should apply to transfers of residential properties into all living trusts, irrespective of whether there are identifiable beneficial owners of the residential properties transferred into such trusts.”

The ABSD (Trust) is to be paid upfront while transferring a residential property into any living trust.

Refunding of ABSD (Trust):

• All beneficial owners are identifiable individuals of a residential.
• Now, the beneficial owner must own a property and not in the future.
• The beneficial ownership of the residential property has been vested in all of them and cannot be revoked, varied or subject to subsequent conditions.

The refund application must be sent within 6 months after the instrument is executed. This refund amount will be based on the difference between the ABSD(Trust) rate of 35% and the corresponding profile of the beneficial owner with the highest applicable ABSD rate. 

The refund will not be applicable if the property is held in trust for a child who gains authority when they turn 21.

The supporting documents for the refund:

• The Option to Purchase or sale and Purchase Agreement copy.
• Trust instrument copy.

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