RES exam question on Private Property Sale: Party A purchases a new-launch condominium unit from a developer for $1,500,000…
Party A purchases a new-launch condominium unit from a developer for $1,500,000 in January 2025 and pays Buyer's Stamp Duty (BSD). In September 2025 — before TOP — Party A sub-sells his interest to Party B for $1,700,000. Consider the following statements: (i) Party A paid BSD on $1,500,000 at the time of the developer purchase. (ii) Party B must pay BSD on $1,700,000 as the sub-purchaser. (iii) IRAS may assess Party A's $200,000 profit as trading income subject to income tax if it treats him as a property trader. (iv) No Seller's Stamp Duty (SSD) is payable by Party A because the property is still under construction and TOP has not been issued. Which statements are CORRECT?
- A(ii), (iii) and (iv) only
- B(i), (ii) and (iv) only
- C(i), (iii) and (iv) only
- D(i), (ii) and (iii) only
Show answer & explanation
Answer
D. (i), (ii) and (iii) only
Explanation
Statements (i), (ii) and (iii) are correct. BSD is payable by each buyer at each stage. IRAS can treat repeated sub-sale profits as trading income. Since Party A sub-sells in September 2025, less than 1 year from January 2025, SSD at 12% applies on the sub-sale consideration. Under-construction status does not exempt a sub-sale from SSD.
Why the other options are wrong
- Statement (iv) is INCORRECT — SSD is computed from the date of the original S&P agreement, not from TOP.
Study the concept behind this question: En Bloc, Auction & the Private Sale Process (Singapore)
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