Commercial property in Singapore is subject to 9% GST on purchase but exempt from ABSD. This is the inverse of residential property which has ABSD (up to 60%) but no GST. GST-registered buyers can claim back the 9% as input tax credit; non-GST-registered buyers absorb the cost. Commercial property has no minimum holding period (unlike SSD for residential).
Commercial vs residential tax treatment
| Tax | Commercial property | Residential property |
|---|---|---|
| ABSD | None | 0-65% (by buyer status) |
| BSD (basic stamp duty) | Applies (commercial rates differ) | Applies |
| GST on purchase | 9% | 0% (residential exempt) |
| SSD | None | 16/12/8/4% in 4-yr window |
| Annual property tax | 10% of AV | 4% owner-occupied; 12% non-owner |
| CPF usage | Not allowed | Allowed (subject to rules) |
Recovering the 9% GST
If you purchase commercial property for business use as a GST-registered entity, the 9% GST is recoverable as input tax credit. Conditions:
- Buyer must be GST-registered (≥S$1M annual taxable supplies)
- Property must be used for taxable business activities
- GST is recoverable progressively over 7 years (Capital Goods Adjustment)
Source: IRAS commercial property GST.
Strategic implications
- Commercial for SME owners: GST recoverable; effective cost much lower
- Commercial for non-GST individuals: 9% GST absorbed; raises true entry cost
- Foreign buyers: No ABSD = significant advantage vs residential
FAQ
Can I avoid GST on commercial property?
No — commercial sales are GST-taxable unless under a TOGC (Transfer of Going Concern) framework.
Is commercial rental income GST-able?
Yes for GST-registered landlords. Most commercial leases stipulate GST-inclusive or plus-GST.
Is there commercial property tax relief?
10% AV property tax is standard; specific exemptions for charity-occupied properties.