Buying Property Through a Trust in Singapore: ABSD Rules 2026

Disclaimer (Block 1): This article is for educational purposes only and is intended to assist CEA-registered property agents in understanding regulatory frameworks. It does not constitute financial, tax, or legal advice. LEVR's calculations are indicative only. Always verify rates and eligibility with your bank, HDB, CPF Board, or a licensed financial advisor before advising clients.

Why Clients Ask About Property Trusts

Clients who already own residential property and face high ABSD on additional purchases sometimes explore alternative ownership structures to reduce stamp duty exposure. Before 2023, purchasing property through a discretionary trust — where the beneficial ownership was not yet assigned to a specific individual — created a situation where the ABSD was assessed based on the trustee's profile rather than the ultimate beneficiary's.

This structure was used by some high-net-worth families to hold residential property for minor children, where the child (as future beneficiary) would be a first-time owner with zero ABSD exposure, rather than paying ABSD at the parent's higher rate.

The May 2023 IRAS Changes: 35% ABSD on Trusts

With effect from 9 May 2023, IRAS introduced a specific ABSD rate for residential property transferred into or purchased by a trust: 35% ABSD applies on the purchase price or market value (whichever is higher), where the residential property is held on trust and at least one beneficial owner is not yet identified or is not an individual.

This 35% ABSD applies regardless of:

• The citizenship or residency status of the trustee or beneficiaries
• Whether the trust is discretionary or fixed
• Whether the beneficiaries are identified or unborn
• Whether the trustee is an individual or a company

The 35% ABSD is non-remissible in most cases — it cannot be refunded even if the property is subsequently distributed to a beneficiary who would have attracted a lower ABSD rate on an individual purchase.

The Exception: Identified Beneficiary Is an Individual

The 35% trust ABSD applies where beneficial ownership is not identified, or where the beneficial owner is not an individual. There is a limited exception: if all beneficial owners of the trust are identified individuals at the time of purchase, ABSD is assessed as if the individuals purchased the property directly.

In practice, this means that a bare trust where the sole beneficiary is a named individual SC who has never owned property could in theory attract zero ABSD (SC first-property rate). However:

• The beneficiary's property ownership history is assessed as if they purchased directly — if the beneficiary already owns a property, their second-property ABSD rate applies.
• IRAS scrutinises trust structures carefully. A bare trust used primarily to hold property for a named individual is functionally equivalent to direct purchase — there is no stamp duty benefit over buying directly.
• Legal costs of establishing and maintaining a trust (trustee fees, trust deed preparation, annual reporting) add costs that eliminate any residual benefit.

Company Purchase: Also No ABSD Advantage

Some clients ask whether purchasing residential property through a Singapore-incorporated company avoids ABSD. It does not. Singapore companies (and foreign companies) purchasing residential property are subject to ABSD at the entity rate:

• Singapore-incorporated companies: 35% ABSD on all residential property purchases (same rate as trusts with unidentified beneficial ownership).
• Foreign companies: 65% ABSD — the same rate applicable to foreigners purchasing residential property.

There is no scenario in which purchasing residential property through a company results in lower ABSD than purchasing as a Singapore Citizen individual. Companies cannot access the SC first-property zero ABSD or second-property 20% rates.

Legitimate Uses of Property Trusts (Non-ABSD)

Property trusts remain valid instruments for estate planning and succession purposes, independent of their ABSD implications:

• Holding property for minor children: A parent may hold property on trust for a minor child for succession planning — but must accept the 35% ABSD cost as the price of that structure if the child is not yet an identified individual adult beneficiary.
• Asset protection: Trusts are used to separate property from personal assets in business or professional contexts. The ABSD cost is a known expense for clients who prioritise structural protection over minimising stamp duty.
• Succession planning across generations: Distributing a property portfolio across generations via trust remains a valid estate planning tool — the ABSD cost on trust acquisition must be factored into the overall estate plan.

What Agents Should Tell Clients Who Ask About Trust Purchases

When a client raises the idea of buying through a trust to save ABSD, the agent's role is to direct them to qualified legal and tax advisors while providing accurate initial framing:

• Since May 2023, the ABSD on residential property held in trust is 35% — higher than any individual buyer category except foreign individuals (60%). There is no ABSD saving through this structure.
• The correct advice is to assess whether the client's goals can be achieved through direct individual purchase, decoupling, or by disposing of an existing property before the new purchase.
• Agents should not attempt to advise on trust law or tax structuring — this falls outside the CEA scope of practice. Refer the client to a qualified lawyer or tax advisor.

Frequently Asked Questions

Disclaimer (Block 3): LEVR's calculator outputs are estimates based on inputs provided and current regulatory parameters as known at time of publication. They are not a guarantee of borrowing capacity, stamp duty liability, or CPF eligibility. Regulatory thresholds and rates may change. Always verify with IRAS, your bank, or a licensed financial advisor before making financial decisions.