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SINGAPORE – The Inland Revenue Authority of Singapore (Iras) has uncovered 166 cases of private home purchases that involved the use of the so-called “99-to-1” or similar arrangements to dodge and about $60 million in ABSD and surcharges will be clawed back. As of April 2024, Iras has completed the review of 187 “99-to-1” cases, of which 166 cases were found to have involved tax avoidance, said Deputy Prime Minister and Finance Minister Lawrence Wong in a written parliamentary reply on May 7. Responding to Ms He Ting Ru (Sengkang GRC), Mr Wong said that the “99-to-1” arrangement is a tax avoidance arrangement used by some property buyers to reduce the rightful ABSD payable on the purchase of a residential property. “When such property purchase arrangements are made to reduce the tax payable, the Commissioner of Stamp Duties is empowered under Section 33A of the Stamp Duties Act to disregard the individual transactions and assess them as a single joint purchase, and to recover the rightful amount of ABSD due, along with a 50 per cent surcharge,” he said. In relation to the investigations, Ms He asked DPM Wong how many referrals Iras has made to the Council for Estate Agencies (CEA) and the Law Society and if the Government will look into assisting individuals who have been misadvised by estate agents and lawyers to obtain compensation. Mr Wong noted that of the 166 tax avoidance cases, about 10 with evidence of potential involvement by property agents are currently under review by the CEA. In April 2023, The Straits Times reported that Iras has offered a reward of up to $100,000 to whistle-blowers who call out private property buyers who use the “99-to-1” or similar arrangements to evade or reduce the ABSD on their purchase. A reward based on 15 per cent of the tax recovered – capped at $100,000 – for each case will be given to informants if the information and/or documents provided lead to tax recovery, the tax regulator had told ST. ST also reported that Iras sent letters to some first-time buyers asking them to explain why they sold just 1 per cent of the property to a relative within a short period after exercising the purchase option. In April 2023, that about 0.5 per cent of private residential properties transacted in the period from 2018 to 2021 involved “99-to-1”, or similar, purchase arrangements, where the owners sold a partial interest in the home to another buyer within a short period, The loophole enables those who already own property to reduce or avoid paying ABSD while still becoming the additional property’s co-owner and a co-applicant for a loan to finance the purchase. Property curbs such as ABSD were introduced in December 2011, with a 3 per cent duty tacked on Singaporeans’ third and subsequent property purchases. Permanent residents buying a second or subsequent residential unit had to pay ABSD of 3 per cent, while foreigners paid 10 per cent ABSD for every property. These rates have been raised a few times since 2011. Following the April 2023 round of cooling measures, Singaporeans now pay 20 per cent ABSD on their second property, and 30 per cent on their third, and Separately, Ms Foo Mee Har (West Coast GRC) asked National Development Minister Desmond Lee if his ministry will consider requests for the Voluntary Early Redevelopment Scheme (Vers) from residents living in ageing blocks older than 50 years but less than 70 years that have substantially deteriorated. In a written reply, Mr Lee noted that “the primary objective of Vers is to stage out the redevelopment of ageing towns in an orderly manner.” “We will consider resident feedback, alongside other broader considerations for the staging of Vers. For example, we will need to carefully ... stage Vers in the older parts of each town, while minimising dis-amenities to residents in newer parts. “We will also need to ensure sufficient construction capacity to support both Vers and new housing demand. We are also working through the package for Vers, and the detailed mechanics and processes for polling and relocation. “We want to ensure that residents’ needs are taken care of, that there will be sufficient new homes at the right time for them, and a range of housing options to meet the needs and aspirations of Singaporeans at different life stages. We are working through the details and plans, and will share more details in due course,” he said.