If you are acquiring or selling equity interests in a Property-Holding Entity (PHE) in Singapore, you may be subject to Additional Conveyance Duty (ACD). This tax ensures that transfers of property ownership through share deals attract duties similar to direct property sales. Understanding the rules is crucial for investors, developers, and companies engaged in real estate transactions.
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🏢 1. What is Additional Conveyance Duty (ACD)?
ACD is a tax levied on the acquisition or disposal of equity interests in a Property-Holding Entity (PHE) — a company, partnership, or trust that holds primarily residential properties in Singapore. This ensures that parties cannot bypass stamp duty by transferring shares instead of the property itself.
📋 2. When Does ACD Apply?
ACD applies if:
- The entity is a PHE, meaning ≥50% of its total tangible assets (directly or indirectly) comprise residential properties in Singapore.
- You acquire or dispose of significant equity interest — generally 50% or more of the equity in the entity (or 50% of the voting power).
- The transaction results in a change of control over the residential property assets.
💰 3. ACD Rates
ACD rates mirror the Buyer’s Stamp Duty (BSD) and Additional Buyer’s Stamp Duty (ABSD) for residential properties:
| Duty Type | Rate | Remarks |
|---|---|---|
| ACD (BSD Component) | 1% to 6% | Progressive rates based on market value of underlying property |
| ACD (ABSD Component) | Up to 60% | Rate depends on buyer profile and number of properties owned |
🔍 4. How to Calculate ACD
The ACD is calculated on the proportionate share of the market value of the underlying residential properties owned by the PHE.
Example:
- PHE owns a residential property valued at $5 million.
- You acquire 60% of the PHE’s shares.
- ACD is calculated on 60% × $5 million = $3 million at applicable BSD and ABSD rates.
📅 5. Filing & Payment Deadlines
- ACD returns must be e-filed with IRAS within 14 days (30 days if executed overseas).
- Payment must be made promptly to avoid late payment penalties.
⚖️ 6. Exemptions & Reliefs
Some exemptions from ACD include:
- Acquisitions due to inheritance or court order
- Intracorporate restructurings meeting specific IRAS conditions
- Transactions involving publicly listed companies
💡 7. Practical Tips for Investors
- Conduct due diligence to confirm if the entity is a PHE.
- Factor ACD costs into your acquisition budget.
- Seek professional tax advice before structuring transactions.
📍 Final Thoughts
The Additional Conveyance Duty plays a crucial role in preventing tax avoidance in Singapore’s property market. For high-value transactions involving property-holding entities, knowing the ACD rules can save significant costs and prevent compliance issues.
