Sept 2021 - 3 min read
As a property agent, your clients put their trust in you to conduct proper due diligence checks and provide accurate information. It is important for you to provide accurate advice to your clients as property transactions involve one of the biggest financial commitments they will make in their lifetime.
A case in point is the Seller’s Stamp Duty (SSD) that a seller has to pay when he sells a property within the specified holding period. To compute the SSD, the holding period starts from the purchase date of the property, which can only be verified either from:
- the Sale and Purchase (S&P) Agreement or
- the Singapore Land Authority’s INLIS (Integrated Land Information Service) portal
Salespersons should note that the SRX app and the Urban Redevelopment Authority’s REALIS (Real Estate Information System) portal do not provide the purchase date; both show the date that the Option To Purchase (OTP) was issued, which is not the date used to calculate the SSD.
In a recent case, a real estate salesperson (Salesperson A) approached a seller to market her property for sale. On 24 March 2020, Salesperson A found a buyer for the property and a selling price was agreed upon.
Before signing the OTP, the seller asked Salesperson A to confirm whether she would incur SSD. Salesperson A checked the SRX app and informed the seller that she would not incur SSD after 23 March 2020, not realising that the SRX app does not show the date the seller purchased the property. Salesperson A added that the buyer was willing to delay the transaction in order for the seller to avoid incurring SSD. Salesperson A also recommended a law firm for the transaction and assured the seller that he would confirm the purchase date with the lawyer, but he did not do so. With that assurance, the seller signed the OTP, which was to be exercised by 14 April 2020.
On 14 April 2020, the seller’s lawyers informed the seller that the OTP was exercised and that she had to pay 4% of the selling price as SSD. This was because the sale of the unit was within the four-year holding period from the date that the seller had purchased the unit on 10 May 2016. As a result of Salesperson A’s failure to check the correct sources for the property’s purchase date, the seller incurred over $26,000 for the SSD due on the sale of the property.
Take note that when you are helping your seller client to calculate SSD or find out if SSD is payable by your client, use only the S&P agreement or INLIS to determine the correct purchase date.
Information accurate as at 2 Sept 2021