Buyer Stamp Duty at the STB

JULY 2009

The STB now insist that the stamp duty on the S&P must be paid upfront, before an application is made to the Board. Stamp duty is usually paid within 2 weeks of the sale and purchase agreement being signed, but this rule has not been enforced for en blocs up until now. For a multi-million dollar deal (eg, $400m) the stamp duty payable is considerable (approx $12m). A late payment incurs a heavy penalty by the IRAS. If the STB does not approve a sale then the stamp duty is returned but not the penalty. Regent Court's en bloc sale was thrown out by the STB at the second visit - even though it had just been approved at the High Court - because the Stamp Duty had not been paid.
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Registrar's Circular 1/2009 on Stamping of Agreements Related to the Collective Sale of Property under the Land Titles (Strata) Act, Part VA

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From the High Court decision (Regent Court)

Suit No:

OS 17/2008, SUM 3938/2009

28 I would add that I was informed by Mr Low that there is apparently now a practice direction that an applicant for approval of a collective sale is to adduce evidence that the relevant sale and purchase agreement is stamped in support of the application.

What is Stamp duty?
 

From IRAS Website:

Stamp duty is a tax on executed documents relating to properties or interest in properties and shares or interest in shares. Stamp duty is payable only on documents described in the First Schedule to the Stamp Duties Act (Cap 312). These documents include a lease, sale and purchase, gift or mortgage of property. It is not a tax on transactions.
Liability arises once the document is executed. Hence, even if the transaction has been aborted, stamp duty is still payable on the document.

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A document can be presented for stamping at any time before executing (signing). However, once a document is executed (signed), stamp duty must be paid within:
14 days from the date of execution if the document is signed in Singapore;

30 days of its receipt in Singapore if the document is signed overseas.

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An enbloc purchase or ‘block’ purchase is regarded as a single sale transaction, notwithstanding that multiple documents may have been executed. Stamp duty is therefore computed on the collective sale price or block purchase price (i.e. total consideration).

IRAS CIRCULAR on Stamp Duty Treatment for Properties acquired on an En Bloc or "Block" Basis

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4. The Stamp Duties Act provides for a penalty of up to 4 times the amount of deficient duty for a document that is insufficiently stamped. Similarly, a penalty of up to 4 times the stamp duty due may be imposed for stamping after the stipulated time period.

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