Purchase Property in Trust to Save On ABSD

What is a Trust? How It Can Help Property Owners with Cash To Save on ABSD?


A trust is a fiduciary relationship in which one party, known as a trustor, gives another party, a trustee, the right to hold title to property or assets for the benefit of a third party, the beneficiary. As an example, a trust can be used if a beneficiary in minor under the age of 21, or has a mental disability that impairs the person’s ability to maintain his or her own real estate. Once the beneficiary is deemed able to manage the real estate by the terms dictated under the deed of trust, the beneficiary will receive possession of the trust. Deed of Trust is a document that lay out the conditions of the trustor-trustee relationship.

Trustee has fiduciary duties to act with honesty, to render proper account of his dealings, to act for the best interest of the beneficiaries), and not to gain any profit for himself or to misappropriate of trust assets or funds. Trustee has the right to make decisions based on due diligence, and  can be held personally liable for their actions if the beneficiary deems there was a breach of trust.

Purchasing Property in Trust to Save On Additional Buyer’s Stamp Duty (ABSD)

One can purchase a property for one’s minor child(ren) under the age 21 in a trust.  When buying properties held in trust, ensure that trustee has the right to make decisions. It is important to ensure who has the legal interest and deal with the person who has the legal interest of the property.

There is misconception that Additional Buyer’s Stamp Duty (ABSD) is not payable for property purchased in a trust. This is clearly not true. The Stamp Duty liability for purchasing a property in a trust will be based on the beneficiary’s residency status, and number of residential properties presently held in a trust. If one and spouse has both owned residential properties, this may be an option to purchase additional property without paying for the ABSC. The drawback of purchasing a property under trust is that the purchase has to be in full cash with no CPF or mortgage as the property must be free from encumbrances. The purchaser is unable to leverage with low cost of borrowing, and utilisation of fund from CPF Ordinary Account.


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Pinnacle Estate Agency (CEA Licence No.: L3010718G) is the leading real estate agency in Singapore providing unparalleled personalised services, effective real estate marketing strategies, and Singapore property guides to everyone. Our real estate services include sale and leasing of HDB resale flats, private residential properties i.e. apartments & condominiums, and commercial properties e.g. HDB shophouses, private shophouses, retail shops, offices, and industrial properties.

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