During kopi, I was reading this https://www.channelnewsasia.com/singapore/99-1-property-arrangement-tax-mother-and-son-charged-4620016
I wonder who is the mastermind. The mum, the son, or the agent(s).
This is a showcase of a very painful lesson that awaits those who think they can outsmart the tax man by exploiting so-called loopholes. TBH, if it is a loophole and you think it is there for you to exploit, do think twice or even twice-twice-twice. This isn't a game of DOTA. The downside of being caught is way too high vs the gains you can get.
Imagine being forced to cough up the owed ABSD plus up to 50% of it as a penalty. If you can't afford to pay the ABSD in the first place, I cannot imagine what shit hole you are digging yourself now that you have to add 1.5x of the same amount. Probably have to sell home or take a loan from others.
Uncle bought a condo as 2nd property with Aunty back when we still had our matrimonial HDB. At that time, ABSD for SC for 2nd property was 7%. (It was initially 3%, but was raised to 7%). Our condo costs about 1.1M, so we coughed up about 80k cash for ABSD. Huge amount for us, but we rather pay up and sleep well and not worry about breaking any regulations. We then rented out our full paid HDB for 3-5 years, which basically recovered the ABSD amount, before we decided to let the HDB go as it was getting rather old with many maintenances needed.
Granted, the same ABSD is now 20% (OMFG), which effectively means a large chunk of commoners (like uncle) who started with HDB, has no way to upgrade easily, but have to do it the more troublesome ways, which I think ( I could be wrong, please don't rely on this for your property planning) are:
1. sell HDB first before buying condo. If condo is still pending construction, then have to rent a place while waiting for condo to TOP. If condo is resale, still have to rent a place while doing renovation. Move multiple times. Rental costs, moving costs, stressed like siao
2. buy condo while holding to HDB, fork up the 20% ABSD, but sell HDB within 6 months of taking keys of condo, which will allow the 20% ABSD to be refunded to you. For this, you need to have that cash to pay the ABSD first. Not everyone can do that, since you also need cash to downpay/renovate the new condo. This can easily reach 500k or more, assuming condo is at least 1M. Plus if you sibei suay, HDB prices could be depressed during the 6 month period you have to let it go at fire sale due to time constraint.
3. Like 2, but you simply pay the ABSD, and keep both condo and HDB, likely renting out the HDB, but it will take a pretty long time to recover the large ABSD amount via HDB rental, even if HDB is fully paid up.
Method 1 seems to cost less than 2/3 in terms of outlay you need, but at the expense of stress to family during this "musical chair" dance. This is especially hard if you have kids in school. They have to adapt to new place, deal with exams, deal with the multiple times of relocating. Such stress can be massive and can cause permanent damage to family relations. Don't take it lightly. Method 2 is likely the safer option, but only for cash rich people, since if you have to borrow to pay the ABSD, that itself will be stressful. Plus you could potentially get less profits from your HDB due to rushed sale.
Method 3 is simplest but very costly since you literally pay 20% extra on your condo. How to break even huh? 1M condo, becomes 1.2M. Immediately you are at 200k disadvantage compared to your new neighbour when it comes to selling.
Regardless, these methods are legit ways and let you sleep well at night lol. Don't do 99-1 or whatever shit that smart-ass people comes up with on internet media. They have no skin in the game, its your skin leh.
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