Even the savviest investor might get into trouble regarding conveyancing fees and stamp duties, even if they believe they are fully informed about the process.
While it may not be customary, three senior judges of Singapore’s Supreme Court believe you should receive a larger share. Even though they were not requested to rule, Justices Belinda Ang, Chua Lee Ming, and Woo Bih Li clarified the situation.
Stamp duties maybe can have a big impact
Normally, each will hold a 50% stake if two persons pay equal amounts to purchase a $1 million property as first-time owners. The roughly $30,000 in legal fees and stamp duties wouldn’t raise many objections because both parties would naturally split these expenses.
Each bidder would receive $1 million if the home were later sold for $2 million.
However, the judges’ revised strategy would allow for the inclusion of additional expenditures in the computation. Therefore, if you had contributed $530,000 of the $1,030,000 total purchase and fee cost, you would have received an additional 1.5% of the selling revenues. In contrast, your co-investor would receive $970,000.
Consider two investors who are purchasing a $2m third home. The Additional Biyer’s Stamp Duty alone would cost $500,000; thus, whoever pays that sum should receive 60% of the shares. He would receive $2.4m, and the other buyer would receive $1.6m if the property were sold for $4m.
Consistent with international standards
The judges researched international and Singaporean practices before drawing their decisions. Buyers can pay for their property purchases and associated charges like legal and stamp duties by utilising their Central Provident Fund contributions.
To determine the parties’ respective shares, courts in Australia and Hong Kong have also chosen to take stamp duties and other expenditures of purchasing a property into account.
However, Singaporean courts still need to decide whether financial donations to cover ancillary expenditures associated with buying a property should be considered to determine the beneficial interest.
I am Tyson Yuk, the founder of the blog Commercial Realty Singapore. With over 15 years of experience, my forte is in the commercial and luxury property line. With my blog, I aim to educate, advise and share tips and tricks with potential property buyers and investors to help them make successful property ventures.
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