Buying property in someone else's name: what it actually costs you

The pitch is familiar. Buy the second property in your adult child's name, keep the money in the family, and skip the 20% additional buyer's stamp duty (ABSD). What you are actually doing is lending several hundred thousand dollars to another person, unsecured, against an asset you do not own, while the tax you avoided stays recoverable with a surcharge.

Why the arrangement looks attractive

ABSD is the whole motive. On the rates in force since April 2023, a Singapore citizen pays 20% on a second residential property and 30% on a third or subsequent one. A permanent resident pays 5% on the first, 30% on the second and 35% thereafter. Foreigners pay 60% and entities 65% (IRAS). On a S$1.8 million purchase, the second-property rate alone is S$360,000 in cash, due within 14 days of exercising the option.

A property bought to be held on trust has attracted ABSD (Trust) since 9 May 2022, with the rate raised to 65% from 27 April 2023, payable upfront, with remission available only where the beneficial owners are identifiable and the strict conditions are met. That is the legitimate route, and it is priced accordingly.

Every transaction now leaves a trail

The assumption that a nominee purchase is invisible is out of date. Every Singapore property transaction is recorded electronically and cross-referenced against stamping records, ownership histories and loan data, which means the arrangement is permanent and searchable rather than deniable.

IRAS has already run the sweep. Roughly 187 cases of 99-to-1 and similar fractional purchases were audited, recovering about S$60 million in ABSD and surcharges. Section 33A of the Stamp Duties Act is the tool: where an arrangement's purpose is tax avoidance, IRAS can claw back the duty avoided plus a 50% surcharge on the additional duty.

Four ways to hold a second property

The table below compares the four structures on the things that matter: cash out today, who holds title, whose borrowing capacity is spent, and what happens if it unravels.

Arrangement	Stamp duty upfront	Legal owner	Loan capacity and TDSR used	Main downside risk
Own name, second property	BSD plus 20% ABSD	You	Yours	High cash cost, no legal risk
Wholly in a child's or sibling's name, your money	BSD only if it is their first property	The named person	Theirs, entirely	s33A clawback plus 50% surcharge; asset exposed to their divorce, bankruptcy or death
99-to-1 or fractional split	BSD on the transferred share	Both parties on title	Both, proportionately	Audited category; ABSD reassessed on full value plus surcharge
Held on trust for a beneficiary	ABSD (Trust) at 65%	Trustee holds legal title	Trustee's	Remission refused if beneficial owners are not identifiable

The honest reading: only the first and fourth rows give you enforceable control over the asset.

The arithmetic on a S$1.8 million condo

Assume a Singapore citizen buyer, a S$1.8 million private condo as a second residential property, purchase price equal to market valuation, and no remission or trust exemption claimed.

In your own name: 20% of S$1,800,000 = S$360,000 ABSD, plus buyer's stamp duty (BSD), which is payable in every scenario.

In a relative's name, where it is their first property: S$0 ABSD. Apparent saving, S$360,000.

If IRAS reassesses under s33A: S$360,000 in additional duty, plus a 50% surcharge on that additional duty (S$180,000), for a total of S$540,000. That is S$180,000 worse than having paid it correctly, before legal fees and any interest. The saving is not a saving. It is a contingent liability with a 50% penalty attached, and it does not expire on a schedule you control.

What it does to the loan

A housing loan taken in the nominee's name is their outstanding housing loan. That is the consequence people underestimate, because it prices their next purchase rather than yours.

On a first housing loan, the loan-to-value (LTV) limit is 75%. On S$1.8 million, that is S$1,350,000 borrowable. With one outstanding housing loan, the limit falls to 45%, or S$810,000 on the same price, a cash gap of S$540,000 (MAS limits; the 45% tier assumes tenure within 30 years and within the age limits, otherwise 25% applies). The monthly repayment on the nominee purchase also counts against their 55% total debt servicing ratio (TDSR), including for the HDB flat or private property they may want in three years.

So the arrangement quietly reallocates borrowing capacity from you to them, then locks it there for as long as the loan runs. Both parties should model what either can borrow next before anyone signs anything.

Who actually owns it

The person on the title is the legal owner. Your protection depends on proving a resulting or express trust, which means asserting the beneficial ownership that creates the tax exposure in the first place. You cannot claim the asset without handing IRAS the case.

And the risks that follow sit outside your control: the nominee's divorce settlement, their bankruptcy, their death and intestacy, or simply a change of heart. If the intention is genuinely to give a child a property, do it in the open, on trust, with the documentation and the duty that go with it.