RES exam question on Private Property Sale: Mr Tay buys a new-launch condominium unit from a developer for $1,500,000 under…
Mr Tay buys a new-launch condominium unit from a developer for $1,500,000 under an option granted in January 2025, and pays Buyer's Stamp Duty. In September 2025, before TOP, he sub-sells the unit to Ms Wee for $1,700,000. (i) Mr Tay's Buyer's Stamp Duty was charged on $1,500,000, or on the market value if that was higher. (ii) Ms Wee pays Buyer's Stamp Duty on $1,700,000 as the sub-purchaser. (iii) IRAS may tax Mr Tay's $200,000 gain as trading income if it treats him as trading in property. (iv) Since the unit is still under construction, therefore Mr Tay pays no Seller's Stamp Duty on the sub-sale. Which statements are correct?
- A(i), (ii) and (iii) only
- B(ii), (iii) and (iv) only
- C(i) and (iii) only
- D(i), (ii) and (iv) only
Show answer & explanation
Answer
A. (i), (ii) and (iii) only
Explanation
Answer: (i), (ii) and (iii) only. Seller's Stamp Duty applies to uncompleted units too, so Mr Tay owes it on a sale within a year.(i) True. Every buyer pays BSD on the higher of price and market value.(ii) True. A sub-purchaser pays BSD on her own price.(iii) True. A gain may be taxed as income where IRAS finds the seller is trading in property.Watch out: Being under construction does not exempt a unit from SSD.Rule: SSD applies to residential property sold within the holding period, counted from the date of acquisition. For property acquired from 11 Mar 2017 to 3 Jul 2025 the rates are 12%, 8% and 4% over three years; on or after 4 Jul 2025 they are 16%, 12%, 8% and 4% over four years.Source: IRAS, Seller's Stamp Duty, read 1 Oct 2026; IRAS, Income tax on property gains, read 1 Oct 2026
Why the other options are wrong
- (iv) False. SSD applies to residential property, completed or not. Mr Tay acquired in January 2025 and sold within a year, so SSD at 12% applies: 12% x $1,700,000 = $204,000.
Study the concept behind this question: En Bloc, Auction & the Private Sale Process (Singapore)
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