When a Singapore company buys an office, shop, factory or warehouse unit, it pays Buyer’s Stamp Duty (BSD) at the non-residential rates: 1% on the first S$180,000, 2% on the next S$180,000, 3% on the next S$640,000, 4% on the next S$500,000 and 5% on the remainder, based on the higher of the price or market value. Additional Buyer’s Stamp Duty (ABSD) does not apply to purely non-residential property. If the seller is GST-registered, GST is usually charged on top, and a GST-registered buyer may be able to claim it back. Duty is generally due within 14 days of signing.
Raffles Corporate Services works with a panel of experienced Singapore law firms who offer cost-effective and efficient legal service and advice. This article is general information only and is not legal advice.
This guide is for directors and finance managers of companies buying business premises in Singapore, including foreign-owned companies.
Which stamp duties apply when a company buys business property?
Stamp duty is a tax on documents, not on the property itself. When your company signs the document that commits it to buy, that document becomes chargeable. For a company buying business premises, three duties are worth checking.
| Duty | Who pays | Applies to commercial (office, shop)? | Applies to industrial (factory, warehouse)? |
|---|---|---|---|
| Buyer’s Stamp Duty (BSD) | The buyer | Yes, at non-residential rates | Yes, at non-residential rates |
| Additional Buyer’s Stamp Duty (ABSD) | The buyer | No, unless part of the property is residential | No, unless part of the property is residential |
| Seller’s Stamp Duty (SSD) | The seller | No SSD regime for commercial property | Yes, if sold within 3 years of acquisition |
SSD is paid by the seller, but it matters to your company as a buyer of industrial property, because it affects your exit options if plans change in the first three years.
How is Buyer’s Stamp Duty calculated on non-residential property?
The IRAS Buyer’s Stamp Duty page sets out these rates for non-residential property acquired on or after 15 February 2023. BSD is computed on the purchase price or the market value, whichever is higher, and is rounded down to the nearest dollar.
| Portion of price or market value | Non-residential BSD rate |
|---|---|
| First S$180,000 | 1% |
| Next S$180,000 | 2% |
| Next S$640,000 | 3% |
| Next S$500,000 | 4% |
| Remaining amount above S$1.5 million | 5% |
Residential property has a further 6% tier for amounts above S$3 million. Non-residential property stops at 5%, which makes a real difference on larger industrial or commercial purchases.
The “higher of price or market value” rule matters in related-party deals. If your company buys premises from a director or a sister company at a discount, BSD is still charged on market value. Keep a valuation on file for these transactions.
Example: a hypothetical industrial unit purchase
Example: a hypothetical Singapore trading company, ABC Logistics Pte Ltd, agrees to buy a strata warehouse unit for S$2,000,000 (excluding GST) from a GST-registered developer. Market value is not higher than the price. The BSD works out as follows.
| Band | Amount in band | Rate | BSD |
|---|---|---|---|
| First S$180,000 | S$180,000 | 1% | S$1,800 |
| Next S$180,000 | S$180,000 | 2% | S$3,600 |
| Next S$640,000 | S$640,000 | 3% | S$19,200 |
| Next S$500,000 | S$500,000 | 4% | S$20,000 |
| Remainder | S$500,000 | 5% | S$25,000 |
| Total BSD | S$2,000,000 | S$69,600 |
On top of that, the developer charges GST at 9%, which is S$180,000. ABC Logistics is GST-registered and uses the warehouse only for its taxable trading business, so it expects to claim that GST back as input tax in the return for the period in which it receives the tax invoice. The company still needs the S$180,000 in cash at completion, so the board plans the bank drawdown and GST refund timing together. No ABSD is payable because the unit is not residential. If ABC Logistics sells the unit within three years, it will face industrial SSD as the seller.
When must the stamp duty be paid?
IRAS requires duty to be paid within 14 days of the date the document is signed, if it is signed in Singapore. If the document is signed outside Singapore, the deadline is 30 days after it is received in Singapore. This is relevant for foreign directors who sign from overseas.
For a property purchase, the chargeable document is the first one that binds the buyer, usually the exercise (acceptance) of the option to purchase. Where no option is granted, it is the sale and purchase agreement. Full duty is charged on that first document, and later documents for the same purchase are not charged full duty again. In practice, this means your 14-day clock usually starts when the company exercises the option, not at completion months later.
Late stamping attracts penalties. IRAS imposes a penalty of S$10 or the amount of duty, whichever is greater, for delays of up to three months, and S$25 or four times the duty, whichever is greater, for delays beyond three months. On a S$69,600 BSD bill, a long delay could cost far more than the duty itself.
How does a company stamp and pay?
Stamping is done electronically through IRAS e-Stamping on the myTax Portal, using the company’s Corppass. In most purchases, the conveyancing lawyer handles stamping as part of the transaction, but the company remains the party liable for the duty. A practical sequence looks like this.
- Before signing, confirm whether the property is purely non-residential, residential or mixed-use, using the approved use and Master Plan zoning.
- Obtain board approval for the purchase, the financing and the stamp duty and GST cash outlay. Record it in a directors’ resolution.
- Confirm whether the seller is GST-registered and whether the price stated is inclusive or exclusive of GST.
- Exercise the option to purchase (or sign the sale and purchase agreement). Note the date: this starts the 14-day stamping period.
- Arrange for the lawyer to e-Stamp the document and for the company to pay BSD within the deadline. Keep the stamp certificate.
- On receipt of the seller’s tax invoice, record the GST and claim input tax in the correct GST return if the conditions are met.
- Book the property, stamp duty and legal costs correctly in the accounts. Stamp duty on an acquisition generally forms part of the cost of the property, not an immediate expense.
How does GST work on a commercial or industrial property purchase?
GST is separate from stamp duty. A sale of non-residential property by a GST-registered seller is generally a standard-rated supply, so GST at 9% is charged. Sales of residential property are exempt from GST.
Whether your company can claim that GST back depends on its own position, as explained in the IRAS GST guidance for the real estate sector.
- GST-registered buyer making taxable supplies: generally able to claim the GST as input tax, subject to the usual conditions such as holding a valid tax invoice. Our guide to input tax claims covers those conditions.
- Buyer making exempt supplies as well (for example, residential rental income or certain financial services): recovery may be restricted to the taxable proportion.
- Non-GST-registered buyer: the GST is a real cost. A large capital purchase is also a good moment to review whether the company should register, which our guide on how to apply for GST registration explains.
Ask your conveyancing lawyer to confirm how GST is reflected in the contract price and in the value used for stamping, because the contract wording affects both.
What about mixed-use properties and shophouses?
Mixed-use properties need extra care because the residential part can attract residential BSD rates and ABSD, while the non-residential part is charged at non-residential rates. IRAS applies each set of BSD rates to its own component and adds the results together. For land zoned “Commercial and Residential”, IRAS deems 60% of the gross floor area to be residential.
For companies, the ABSD exposure is the expensive part. Under the IRAS ABSD rules, entities buying residential property on or after 27 April 2023 pay ABSD at 65%. IRAS treats shophouses with a portion permitted for residential use as residential property, and for an HDB shop with living quarters, ABSD applies to the apportioned value of the living quarters. A shophouse that looks commercial from the street can therefore carry a large ABSD bill. Our guide on ABSD for companies buying residential property covers that scenario in detail.
A separate regime, Additional Conveyance Duties, applies when shares in a company that mainly holds residential property are transferred. It does not apply to a direct purchase of commercial or industrial property. If you are considering buying a property-holding company instead of the property, read our guide to Additional Conveyance Duties on property-holding entities first.
Why does Seller’s Stamp Duty matter if you are buying industrial property?
The IRAS industrial SSD page states that SSD applies to industrial properties and industrial land acquired on or after 12 January 2013 and sold within the holding period.
| Holding period before sale | Industrial SSD rate |
|---|---|
| Up to 1 year | 15% |
| More than 1 year, up to 2 years | 10% |
| More than 2 years, up to 3 years | 5% |
| More than 3 years | No SSD |
SSD is charged on the higher of the sale price or market value. If your company may need to relocate, downsize or sell the unit to raise cash within three years, factor SSD into the decision before you buy, or consider leasing instead. Where parts of a property were acquired at different times, each part has its own holding period.
Document checklist before your company signs
- Directors’ resolution approving the purchase, financing and authorised signatories
- Option to purchase or sale and purchase agreement, with the price and GST wording reviewed
- Evidence of approved use and zoning (for example, the title, Master Plan zoning and any written permission)
- Valuation report, especially for related-party purchases
- Seller’s GST registration status and, later, the tax invoice
- Bank facility letter covering the purchase price and the timing of GST and stamp duty
- Stamp certificate and proof of payment, filed with the company’s records
Property ownership also brings ongoing costs. Our guide to property tax for companies explains annual value and how property tax is billed on owner-occupied and let premises.
Frequently asked questions
Does a foreign-owned Singapore company pay more BSD on commercial property?
No. BSD applies at the same rates whatever the buyer’s nationality or ownership. ABSD, which does vary by buyer profile, only applies to residential property.
Is stamp duty charged when the option is granted or when it is exercised?
For a typical purchase, duty is charged on the document that commits the buyer, usually the exercise or acceptance of the option to purchase. The 14-day stamping period runs from that date.
Can our company claim stamp duty as a tax deduction?
Stamp duty paid on acquiring property is generally a capital cost, so it is not deducted as a business expense in the year paid. It usually forms part of the cost of the property in the accounts.
Does SSD apply if we sell an office unit after one year?
No. SSD applies to residential and industrial property. There is no SSD regime for commercial property such as offices and shops, although income tax may still need to be considered if the company is treated as trading in property.
Who pays stamp duty on a commercial lease instead of a purchase?
Leases are stamped under different rules, with duty generally payable by the tenant. If you are deciding between buying and leasing, compare the full cost of both routes, including SSD exposure on an early industrial sale.
Need help with a company property purchase?
If your company is buying commercial or industrial premises, the Raffles Corporate Services team can prepare the directors’ resolutions, check the GST position and input tax claim, record the purchase and stamp duty correctly in the accounts and keep the company’s records in order. Contact us at [email protected] or on WhatsApp at +65 8501 7133. Your conveyancing lawyer handles the purchase documents and stamping. This article is general information, not tax or legal advice.
Kevin Yeo, Raffles Corporate Services