Estate duty in Singapore was abolished in Singapore on 15 February 2008.
The abolishment of estate duty in Singapore does not mean that there is no tax to pay if a beneficiary inherits a property.
The big question remains: do I have to pay stamp duty for inherited properties in Singapore?
Generally, you do not need to pay stamp duty for inherited properties in Singapore if you meet the following criteria:
1. It was a residential home.
2. And inheritance was by way of a grant of probate, grant of letters of administration or the Administration of Muslim Law Act.
Even if there is no stamp duty when you inherit a property, you may still need to pay stamp duties:
1. When you sell the inherited property. If the inherited property is acquired after 20 February 2010 and it is sold within the stipulated time period, you may need to pay the SSD (i.e. Seller’s Stamp Duty). To find out the SSD payable, you should refer to IRAS’ website.
2. When you buy a new property, the inherited property will count towards the number of properties you own and you may need to pay ABSD (i.e. additional buyer’s stamp duty). ABSD is based on the number of properties that you currently own.
What if the Inherited Property is a HDB Flat?
If the inherited property is a HDB flat, you may need to sell it if:
1. You already own a HDB flat. HDB does not allow you to own more than one HDB flat.
2. You do not meet HDB’s eligibility criteria. You will need to form a family nucleus to own a HDB flat. If you are a single Singapore citizen, you will need to be above the age of 35 to own a HDB flat by yourself.
3. You already own a private property and the inherited flat was bought after 30 August 2010 or bought with government grants.
What if the Inherited Property is a Private Property?
If you are not a Singapore citizen and the inherited property is a landed property, you will need the approval of the Singapore Land Authority. The SLA is more likely to consider the application favourably if the applicant is a Singapore PR for at least 5 years and made an exceptional economic contribution to Singapore.
Other Fees Payable
You may have to pay the following fees (other than stamp duties) if you were to inherit a property successfully.
1. Maintenance fees. This is in the form of town council conservancy fees if you inherit a HDB flat or maintenance fees for a condominium apartment.
2. Property tax. This is payable annually and is assessed based on a percentage of the annual value (i.e. market rental rate) of the property. The property tax is lower for owner occupied properties.
While there are obvious financial advantages to inheriting a property, there are hidden costs (other than stamp duties) which you may not be aware of. If you are considering leaving your property for your loved ones, you may wish to discuss with them on their ability to manage the costs involved with the inheritance. If they are not able to, you may wish to make alternate plans on your property.
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