I Realised This About The "ABSD LOOPHOLE" | These Property Buyers May Not Be Stupid...

[@joshconsultancy]

Disclaimer: I'm trying to figure out why it may have been a loophole. The narration is from my best assumption on how it works and may contain inaccuracies. Consult a proper lawyer with regards to home ownership structure. Article source: www.singaporelawwatch.sg/Headlines/iras-probes-home-buyers-who-used-99-to-1-loophole-to-avoid-paying-absd

[@hatchegg80]

It's clearly designed to avoid ABSD, the govt should do the right thing and make all these people pay absd and fine them

[@joshconsultancy]

From news articles, now is a period for voluntary admission

[@DonYang73]

I agree. The authorities should hammer them. Clear cut evasion. Secondly, foreign properties also count as additional property, authorities should hammer them accordingly, otherwise authorities can take a hike. Toothless tiger

[@jennylim1558]

Respect you Josh, for your integrity in not supporting all these loopholes and sneaky ABSD defaulters! 👏👍. If one can afford another property for investment or whatever, then they should pay their fair share of ABSD else properties would become too expensive for our own Singapore young 1st time buyers.

[@joshconsultancy]

Thank you for the high praise and I agree with your point of view

[@Stothereal]

few scenarios: a) a SG citizen and foreigners/EP spouse: if they buy together, absd is 30% on the entire purchase. Loophole: the SG spouse buy first, then sell 1% to the foreign spouse, 30% of the absd is paid on 1% of the purchase price. b) a couple in which one of the spouse already owns a property c) rich speculator who owns property, can ask his family members who own no property to buy first, then resell 1% to him. ABSD on that 1% only, then when the unit TOP, they flip the unit Also, I hope the government will close that "loophole" allowing HDB owners to decouple and buy a private condo

[@joshconsultancy]

Good narration on the scenarios above. Hdb cannot decouple. That “gift of home to spouse” loophole has long been banned already from what I hear

[@mkt282]

Case #1 loophole need to be addressed

[@Stothereal]

@@joshconsultancy A married couple owning a BTO should NOT be allowed to buy a private condo, and should be forced to sell the HDB once one of the spouse buys a condo.

[@june1040]

How can the Buyer buy first & immediately sell 1% away to "relative", No need pay SSD? I think Govt should ban Developer from allowing sub sale?!?

[@NEAAFFAIRS]

@june1040 the pay all stamp duties which some agents tout is still cheaper than paying full absd

[@bahbahbah8460]

aren't loopholes supposedly legal? or is it the intention to evade tax that is the crime?

[@joshconsultancy]

Guess its intention to exploit and indeed paying a wrongly lower amount which could make it illegal

[@stevenheng3336]

Likely also agents are 'advising' them..

[@sgdadbored]

Pretty sure IRAS knows the “loophole” and allow it to happen for as long as possible and sweep them all up when time comes for redemption or bonuses 🎉 here’s the time.

[@joshconsultancy]

ohzz dangerous statement to make 😅

[@JJ-iu6sr]

Hi Josh, in this 1 to 99 arrangement, when the property is sold for a profit, will the master owner, who owns 1% of the property but paid 100% of the mortgage, be entitled to 100% of the profit? Or he/she will get 1% while puppet owner receives 99%?

[@joshconsultancy]

Legally only entitled to 1%. That’s why if the puppet wants to take advantage it is possible. Hence you realize, it’s all “relative” where there is some trust.

[@kangjingtan7312]

What do you think about this common scenario ? Buying HDB with 1 as owner and other as essential occupier with the intention of the 'essential occupier' purchasing a private property after 5 year MOP and avoiding ABSD.

[@joshconsultancy]

This is similar to 99-1 planning for first time owners and imo not tax evasion. The cases highlighted are those buying NOT their first, possibly exploiting the 1% transfer mechanism

[@malita354]

❤ Great Episode! Kudos to you for your the Investigative efforts and findings. Its an opinion we appreciate 👍 Technically speaking a simple query to the hdb database will flag out every 99-1 lease owners . Then one by one investigate them will reveal a pattern. Interesting that there is such a "loophole"😅

[@joshconsultancy]

Thank you for high praise. Hdb cannot transfer btw. On private front, 99-1 is not a problem. As the rule suggest now, both being first time owners is allowed for planning and these are not abusers It’s only when 1% from the 100% that is transferred to someone who has existing properties. That is a sign of deliberate abuse of the loophole

[@malita354]

@@joshconsultancy Intent need to be proven which i feel be very difficult. Cheers

[@2011crane]

I dont understand the use of probe. To me it seems that a potential crime was comitted. I think they should do an internal revieww and be held responsible for losses due to these loopholes

[@joshconsultancy]

Innocent until proven guilty but your opinion noted

[@NEAAFFAIRS]

This was quite common and is on some property agents podcast. Im surprise the figure is that low at 160ish

[@joshconsultancy]

Maybe more to come?

[@Longtermalwayswins]

Please take this in good faith. The youtube premieres feature is an extremely annoying feature that tells someone something is happening and does nothing but this. If possible, disable it and see if it helps increase your subs. 👍🏻keep up the good work.

[@joshconsultancy]

Noted, thank you and cya around zack

[@DonYang73]

I like the terms you use, puppet and puppet master. 😂😂💪👍

[@markchan6923]

I’ve a fren who claimed that she decoupled her first property with her husband and her husband in turns bought another property co-own under this 99-1 structure with their son. I doubt she actually decoupled d first property with her husband. If she had decoupled, and after decoupling, why is it that her husband only own 1% of d new property and d son owns 99%. Clearly, her husband is d one with d financial capacity. Make no sense.

[@joshconsultancy]

The new IRAS guidelines on only first time property buyers will eliminate some of these intentions

[@ocswoodlands]

the best property strategy is buy the 1st HDB flat using tenancy in common structure.

[@joshconsultancy]

Owner - occupier u mean?

[@RenoKong]

@@joshconsultancy when will owner-occupier be treated as a "loop-hole" as well?

[@joshconsultancy]

@@RenoKongit’s more of tax planning like 99-1 for first time owners. Hdb eligibility again are ALL first time owner. I interpret as no one in that application has evaded absd?

[@RenoKong]

@@joshconsultancy Wife owner while occupier husband buy condo so that each has 1 property. That’s two property under one nucleus without ABSD. Does this sorta be classed under “avoiding” ABSD?

[@joshconsultancy]

@@RenoKongone in each name by default is not avoiding absd in todays context. In the scenario mentioned in this video, “puppet master” owns 1 or more already in his/her name and paid absd on 1% which may be tax avoidance

[@malita354]

If all 99-1 need to pay full tax if buy 2nd property, why need whistle blowers when all data can be found by querying the database?😅

[@joshconsultancy]

Not ALL. It's those that TRANSFERRED 1% ownership after exercising option. TRANSFERRED so as to pay ABSD on only 1% Not first timers who dont need to pay absd anyway and structured 99-1% at start Hope it clarifies

[@malita354]

@@joshconsultancy Thanks Josh! Is this data (the actual affected transactions) not also at a click of a button?

[@chengjm7696]

Hi Josh, I own a property and am blessed to have inherited another property from my late parents. For inherited property there is no payment of ABSD. In future if I were to buy another property, will this new property be considered as my second or third property as the amount of ABSD payable is hugely different. Thank you.

[@joshconsultancy]

Hi Cheng, in my understand it is 3rd. Do double check w lawyers 👌🏻

[@chengjm7696]

@@joshconsultancy Thks

[@kenlim5315]

Tax Evasion and Tax Avoidance are 2 different terms. Do use it carefully. :)

[@joshconsultancy]

Certainly The cases highlighted are those individuals who have already at least one property in their name and possibly exploiting the 1% transfer mechanism. That could be evasion depending on the finding

[@jennylim1558]

What's the difference? Same intent!

[@lyonlee86]

Nice 👍

[@steven298]

There are legit cases that need to sell that 1% if buyer can't enough loan yet want to invest or for ownstay which might need parent help on loan due to tdsr & increasing interest rate stress test. I think the problem now are some buyers might exploit hence iras is checking.. if its really illegal, URA can simply don't allow to add new owner/buyer to the property ownership 😅

[@Ben-gp5ty]

Cannot afford then don buy Condo, whether its investing or for own stay, its still tax evasion

[@RenoKong]

@@Ben-gp5ty then why still allowed in the first place if not legit case?

[@joshconsultancy]

Personally I don’t think that’s a valid reason. Parent can fund more down payment to solve it If there were correct intentions, it should be structured 99-1% right at the start and absd on full amount. Might as well full purchase in child’s name. Again it highlights the transfer mechanism was exploited.

[@MsCorydorus]

@@joshconsultancy But is not a tax evasion issue but more URA one.

[@LanceTeo-yr7qp]

@@MsCorydorus Not tax evasion, but is confirmed tax avoidance. Not criminal, but still need to pay back nonetheless.

[@lishr4536]

omg ppl actually talk about divorce and transfer hdb flat?! who sia lol

[@joshconsultancy]

there are real cases unfortunately

[@lishr4536]

confirm HDB not so stupid la. they confirm will keep an eye also right. once kena thats it..@@joshconsultancy