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Singapore has become the new favorite new home for the world’s millionaires and billionaires over the past year. The tight security the city state offers its residents seems to be one of the most favorable features attracting wealthy newcomers. In addition, over the past few years, Singapore has built a trove of new entertainment venues, restaurants and luxury housing and condominium developments offering up-to-date features comparable or exceeding anywhere else in the world.

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Buying real estate should start with selecting a good property agent in Singapore. Since all properties for sale are posted on one general listing, the need for multiple agents is not necessary. Choose one through personal reference or a background internet search and stick with that agent.

It’s no secret that Singapore’s property market is segmented in favor of the local citizens. Since the early 1970s, the government of Singapore has overseen the property market. During that time, it gradually imposed restrictions and extra taxes on foreigners wanting to buy Singapore property.

The goal seems to have been to keep the property market affordable for Singaporeans so they could continue to live in their own country and also allow foreign buyers who are willing to pay the additional fees and surcharges necessary to buy property.

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One of the extra costs foreign real estate buyer face is the stamp duty fee. The dollar amount and type of stamp duty will depend on the type of property purchased and the number of properties the buyer already owns.

There are three layers of Singapore stamp duty.

Buyer’s Stamp Duty (BSD) – A 3% ad valorem tax payable by the buyer, irrespective of number of properties already owned and regardless of whether you are a Singaporean citizen. The buyer pays 1% tax duty on the first $180,000, 2% on the next $180,000 and 3% on everything thereafter in Singapore dollars.

Additional Buyer’s Stamp Duty (ABSD) – This fee only applies to residential property. Foreigners pay a flat 15% tax duty for any residential property. Singaporean citizens and permanent residents pay a staggered fee in relation to the number of properties they own starting at 0% and increasing to a maximum of 10%.

There are exceptions for this stamp duty category. USA citizens and national/permanent resident from Switzerland, Liechtenstein, Norway and Iceland pay the same stamp duty rates as Singapore citizens.

Seller’s Stamp Duty (SSD) – Applied to residential property only, the seller shoulders this tax. This duty encourages to investors to hold on to their property for longer periods to discourage wild inflations in property values.

No SSD fee is levied of at property is held for four years or more. Sellers trying to turn a quick profit by selling within a year of purchase will pay a SSD fee of a minimum of 16% of the selling price. Within two to three years, the sellers SSD fee is 12% and selling between two and three years after the purchase, the SSD is 8%.