Buying property in a child's name to avoid ABSD is legally permitted in Singapore but typically uses a trust structure rather than direct minor ownership. From 9 May 2022, ABSD Trust at 65% applies when residential property is acquired by a trustee for a beneficial owner who is a child or any natural person. This effectively eliminated the strategy as a tax-avoidance tool.
ABSD Trust rules
The ABSD (Trust) is a flat 65% on the property's market value for any transfer of residential property into a trust where the beneficial owner is identifiable. Source: IRAS ABSD Trust.
The 65% rate applies regardless of the beneficiary's status — SC child, PR child, foreign child, or adult. It was introduced on 9 May 2022 specifically to close the previous loophole where wealthy buyers transferred property into trusts to avoid ABSD.
Refund of the 65% trust ABSD down to the beneficiary's individual rate is possible only if specific conditions are met: identifiable beneficial owner, trustee holding for the named beneficiary, no settlor retention of beneficial interest.
Worked example: Trust property for an SC minor
| Item | Amount |
|---|---|
| Property price | S$1,500,000 |
| BSD | S$44,600 |
| ABSD Trust (65% upfront) | S$975,000 |
| Refund eligibility (SC child first property) | S$975,000 (full refund) |
| Net ABSD after refund | S$0 |
| If trust refund denied | S$975,000 net cost |
The trust ABSD refund is conditional on documented beneficial ownership and proper trust deed structure. Errors at setup can permanently forfeit the S$975,000 refund.
Why the strategy rarely works
- Upfront capital lock: S$975,000 cash is tied up for months pending refund — most buyers cannot afford this even temporarily.
- Refund conditions: Strict — any retained settlor benefit or trust mechanism that diverts economic value back to the parent will forfeit the refund.
- Legal costs: Trust setup typically S$10,000–S$20,000 plus ongoing trustee fees.
- Future flexibility: Property held in trust is harder to refinance, sell, or use as collateral.
For legal ABSD-reduction strategies see the Singapore ABSD framework.
Frequently asked questions
Can I directly transfer property to my adult child?
Yes, via gift or sale. The child pays ABSD based on their personal status and property count — no trust premium. Stamp duties on the transfer itself apply.
Does the trust ABSD apply to nominee arrangements?
Yes. Any beneficial ownership arrangement that's not a registered legal owner triggers ABSD Trust.
Can a minor own property directly in Singapore?
Singapore law allows minors to own property only through guardian / trustee arrangements. Direct minor ownership is not possible.