Understanding the 99-1 Property Arrangement in Singapore Correct vs. Wrong Practices

99-1 Property Arrangement in Singapore cover photo

Navigating the real estate market in Singapore can be complex, especially with various regulations designed to maintain stability and affordability. Among these regulations, the Additional Buyer’s Stamp Duty (ABSD) plays a crucial role in cooling the market and deterring speculative buying. However, some buyers have sought ways to circumvent these measures, leading to the controversial 99-1 property arrangement. This article delves into the nuances of the 99-1 arrangement, distinguishing between correct and wrong practices, and exploring the risks, rewards, and consequences involved.

Additional Buyer’s Stamp Duty Rates

Buyer profileABSD (rates on/after 27 April 2023)
SCs buying their first property0%
SCs buying their second property20%
SCs buying their third and subsequent properties30%
SPRs buying their first property5%
SPRs buying their second property30%
SPRs buying their third and subsequent properties35%
Foreigners buying any property60%
Entities (companies or associations) buying any property65%
Trustees for any residential property65%
Housing developers for any residential property35% (additional 5%; non-remittable)

Source: IRAS

What is the wrong 99-1 Arrangement?

The wrong 99-1 property arrangement involves one party (usually a first-time buyer) purchasing 100% of a property and later selling a small share (typically 1%) to a co-owner who owned 1 or some properties. This arrangement makes use of the loophole to avoid paying a large sum of ABSD and still allow the purchasing parties to get a larger housing loan.
Mary, a Singaporean, already owns one property and is subject to 20% ABSD on her second property purchase. To avoid this, she arranges to buy a second property with her friend Tom, who does not own any property. Tom buys 100% of the property. After the transaction, Tom sells 1% of the ownership to Jessica.
  1. Tom buys 100% of the property as a first-time buyer, thus no ABSD is involved.
  2. After the transaction, Tom sells 1% of the property to Mary, who pays ABSD only on that 1% share.
  • Property Purchase Price: $1,000,000.
  • Tom purchased 100% of the property, with no ABSD.
  • Tom sells 1% to of the property to Mary after the transaction for $10,000.
  • Mary only needs to pay $2,000 of ABSD (20% of $10,000), instead of the full ABSD of $200,000.
  • Able to use both incomes to assess for a larger loan.
The Consequences: 
In such a 99-1 transaction arrangement, Tom and Mary were considered to be engaging in a tax avoidance scheme. IRAS can order them to pay the full ABSD of $200,000 and a 50% penalty, amounting to an additional $100,000 for this case.

What is the correct 99-1 Arrangement?

The correct 99-1 property arrangement involves one party purchasing 99% of a property, while another party purchases the remaining 1%. If both the purchasing parties do not own any residential property, they are not liable to pay ABSD. However, if one of the purchasing party already owns a residential property, they are liable to pay the full ABSD.
Mary, a Singaporean, already owns one property and decided to purchase another residential property with Tom. They decided to do the correct 99-1 property arrangement with Tom holding 99% and Mary holding 1% of the property from the beginning..
  1. Tom holds 99% of the property and Mary holds 1% of the property
  • Property Purchase Price: $1,000,000.
  • Tom holds 99% of the property and Mary holds 1% of the property.
  • Pay $200,000 of ABSD since this is 2nd residential property for Mary.
  • Able to use both incomes to assess for a larger loan.
IRAS allows this arrangement as it is not used to avoid paying ABSD.

Penalties and Fines:

  • Clawback of ABSD: IRAS can claw back the unpaid ABSD, requiring the parties to pay the full amount they initially sought to avoid.
  • Monetary Penalties: On top of the ABSD, IRAS can impose a penalty of up to 50% of the underpaid duty.
  • Legal Consequences: Persistent or egregious tax avoidance cases may lead to legal action, further financial penalties, and reputational damage.
  • Interest on Late Payments: Additional interest may be charged on overdue payments, compounding the financial burden.

Recent Enforcement Actions:

In May 2024, IRAS reviewed 187 cases involving the 99-1 property scheme and found 166 cases involving ABSD avoidance. The authority recovered $60 million in ABSD and imposed significant penalties on those involved. This highlights the stringent measures taken to curb tax avoidance practices and the financial risks of engaging in such schemes.

Legal Safeguards and Best Practices

To ensure compliance and avoid the pitfalls of wrong 99-1 arrangements, buyers and investors should adopt best practices and seek professional advice.

  1. Document Genuine Intent: Ensure that the commercial intent behind any property arrangement is documented. This includes detailed agreements outlining the rationale behind ownership splits and contributions from each party.
  2. Seek Professional Advice: Engage legal and financial professionals to guide you through the process. This helps in structuring the arrangement correctly and ensuring compliance with all relevant regulations.
  3. Full Disclosure: Maintain transparency in all transactions. Disclose the nature of the arrangement to relevant authorities and ensure that all documentation is accurate and complete.
  4. Stay Informed: Keep abreast of changes in regulations and guidelines issued by authorities such as IRAS. Regularly review your property arrangements to ensure ongoing compliance.


The 99-1 property arrangement in Singapore can be a legitimate tool for structuring property investments, provided it is used with genuine commercial intent and full compliance with regulations. However, when used primarily to evade ABSD, it becomes a wrong practice with severe consequences.

As the Singapore government continues to enforce strict measures against tax avoidance, buyers and investors must understand the fine line between correct and wrong practices. By adhering to best practices, seeking professional advice, and maintaining transparency, individuals can navigate the complexities of the property market while avoiding potential pitfalls and penalties.

Understanding the legal landscape and ensuring compliance not only safeguards against financial and legal repercussions but also contributes to a stable and fair property market in Singapore.


Share the article