ABSD and the 99-to-1 Arrangement: What the Policy Change Means for Buyers

The 99-to-1 property arrangement was one of the most widely discussed ABSD workarounds in Singapore over the past few years. IRAS has made its position unambiguous: this is tax avoidance, and buyers caught using it face the full ABSD plus a significant surcharge. Here is everything you need to know.

What Is the 99-to-1 Arrangement?

The 99-to-1 arrangement involves two buyers purchasing a property with ownership split as 99% and 1%. The structure was typically used by a married couple where one spouse already owns a property, making any additional property subject to ABSD at 20% or higher.

The intended mechanics were as follows: the spouse who already owns a property purchases just 1% of the new property, while the spouse without a property purchases 99%. Since the 99% buyer has no prior ownership, they are buying as a first-time purchaser - theoretically attracting zero or lower ABSD on the 99% share. The 1% share owned by the property-owning spouse would attract ABSD, but only on 1% of the purchase price.

The 1% owner would then transfer their share back to the 99% owner shortly after purchase, completing the effective transfer of the whole property at a fraction of the ABSD cost that would otherwise have been payable.

Why IRAS Treats This as Tax Avoidance

IRAS has been explicit that it will look through arrangements designed to artificially reduce stamp duty liability. The 99-to-1 structure has no commercial substance - its sole purpose is stamp duty reduction. Under section 33A of the Stamp Duties Act, IRAS has the power to disregard or vary any arrangement that has the effect of reducing stamp duty where the arrangement lacks genuine commercial justification.

When IRAS determines that a 99-to-1 arrangement was entered into primarily to avoid ABSD, it treats the entire property as having been purchased by the 99% buyer and assesses ABSD on the full purchase price at the rate that reflects the true ownership intent. The 50% surcharge on the underpaid amount is then added on top.

The Financial Consequence

To understand the financial risk, consider a couple buying a $1.5 million property where one spouse already owns a property. The ABSD that should have been paid is 20% on $1.5 million = $300,000. If IRAS catches and reverses the arrangement, the couple faces $300,000 in ABSD plus a $150,000 surcharge - a total of $450,000 in tax and penalties, significantly more than the original ABSD they tried to avoid.

Legal Alternatives That Actually Work

The good news is that there are fully legal and IRAS-compliant ways to manage ABSD exposure for couples and investors. These involve real ownership changes and genuine commercial substance - not artificial splits.

Decoupling - The Legal Version

True decoupling involves one spouse genuinely buying out the other's share of a jointly-owned property at market value. The exiting spouse becomes a non-owner and can subsequently purchase a new property as a first-time buyer with zero ABSD. This involves paying BSD on the transferred share, but the combined cost is typically far less than the 20% ABSD on a second property.

Decoupling must be a genuine arm's-length transaction - not a paper transfer with no cash changing hands and no intention to actually separate ownership.

Single-Name Ownership from the Start

If a couple purchases their first property in one spouse's name only, the other spouse retains their first-property status and can purchase the second property as a first-time buyer with zero ABSD. This must be a genuine ownership decision - the non-owning spouse truly has no ownership interest in the first property. Loan eligibility under TDSR is assessed on the sole owner's income, which may affect the loan quantum available.

Sell Before You Buy

The most straightforward approach remains selling an existing property before purchasing the next one. Once the existing property's OTP has been exercised by your buyer, you are considered not to own that property, and your next purchase is treated as a first or reduced-count purchase accordingly.

This article is for general information and educational purposes only.Estimates only, not guaranteed, figures may change. ABSD rules and anti-avoidance provisions are governed by IRAS under the Stamp Duties Act. If you have concerns about past or planned transactions, consult a qualified property lawyer immediately. Information accurate as at March 2026.