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The basics of restructuring property ownership

The basics of restructuring property ownership

  • 25 April 2018
  • Hin Tat Augustine & Partners

The two common scenarios which may occur when there is a change in property ownership.

When two (or more) persons own a property and one co-owner transfers his/her share in the property to the other co-owners, it is commonly referred to as a “part-share transfer”. This is how property ownership can be restructured and there are 2 common scenarios where a part-share transfer can take place:

1. Pursuant to divorce proceedings

In a divorce, one spouse may be ordered by the Court or it may be agreed between the spouses that one spouse may transfer his/her share in the matrimonial home or any other property or properties the couple may own, to the other spouse, with or without monetary consideration. No stamp duty is payable to whom the share is transferred as the stamp duty is remitted under current legislation.

2. Pursuant to an agreement between the co-owners (“Decoupling”)

An owner (Party A) of a property may decide to transfer his/her share in the property to the remaining co-owner(s) (Party B) so that he/she can be free to purchase another property. This is commonly known as Decoupling.

As the transaction involves both a sale (by Party A) and a purchase (by Party B) of Party A’s share in the property, both Party A and Party B would need to engage separate lawyers to act for them. The lawyers will draw up a contract setting out the agreed selling price of the share and other salient terms for the transaction as may be agreed to between both parties. A valuer should therefore be engaged by either party to ascertain the value of the share of the property being transferred as Buyer’s Stamp Duty is payable by Party B on the market value of the share transferred.

Additional Buyer’s Stamp Duty may also be payable by Party B if he/she already owns another residential property or is not a Singapore Citizen.

Apart from stamp duty payable by Party B, Party A may also have to pay Seller’s Stamp Duty if the share is transferred within 3 or 4 years from the date of Party A’s acquisition of the property.

For both scenarios above, any existing mortgage on the property will have to be discharged on or before the completion of the part-share transfer. Depending on the terms of the Court Order (under scenario 1 above) or the contract (under scenario 2 above), the person transferring his/her share has to repay his/her share of the outstanding loan and refund all monies withdrawn by him/her from his/her Central Provident Fund (CPF) account towards the property. The person to whom the share is transferred to will also have to secure a fresh loan from a financial institution in his/her own name to finance the transaction. Monies in his/her CPF account can also be used as well, depending on the availability of funds and approval from the financial institution.


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