The Inland Revenue Authority of Singapore (IRAS) has uncovered 166 instances of tax avoidance related to private property purchases, resulting in plans to recover approximately S$60 million in Additional Buyer’s Stamp Duty (ABSD) and related surcharges. This follows a review of 187 “99-to-1” cases completed as of April 2024.

On May 7, Deputy Prime Minister and Minister for Finance Lawrence Wong explained that the “99-to-1” arrangement enables certain property buyers to circumvent their legitimate ABSD obligations. Under this scheme, buyers sell a fractional interest in a property to another party shortly after the initial purchase, effectively reducing their tax burden.

In his parliamentary statement, Wong emphasized that the Commissioner of Stamp Duties has the authority to disregard individual transactions made under these arrangements. Instead, these transactions will be assessed as a single joint purchase, allowing authorities to reclaim the correct amount of ABSD owed, along with a 50% surcharge.

As of the review’s conclusion, 166 out of the 187 scrutinized cases were confirmed to involve tax avoidance. Wong also noted that among these, around ten cases are currently under further examination by the Council for Estate Agencies due to potential involvement of property agents in the tax evasion schemes.

Senior Minister of State for Finance Chee Hong Tat highlighted in Parliament that about 0.5% of private residential properties sold between 2018 and 2021 involved the “99-to-1” arrangement or similar tactics. He pointed out that property agents implicated in these breaches may face significant penalties, including financial fines or registration suspensions, depending on the severity of their involvement in these tax avoidance strategies.