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Paper 2 · Lesson 8 — Taxes on Property — Property Tax, Stamp Duties, Income Tax and GST

Seller stamp duty

Seller's Stamp Duty on residential and industrial property: the holding-period bands and current rates.

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Question 1

A buyer has duly paid his Buyer's Stamp Duty, but the seller has not paid the Seller's Stamp Duty on the same sale contract. The buyer assumes this is entirely the seller's problem. Which statement is correct?

  1. A. The contract is fully stamped once the buyer has paid BSD, regardless of the SSD.
  2. B. The buyer can never be affected by the seller's unpaid SSD.
  3. C. IRAS will simply waive the SSD because the buyer has paid BSD.
  4. D. The contract is not duly stamped until the SSD is paid, so the buyer is exposed.
Show the answer and full explanation

Answer: D

The rule. If the seller fails to pay SSD, the sale contract is not duly stamped even though the buyer paid BSD — so the contract is unenforceable and a penalty of up to four times the duty can follow. The buyer therefore has a real interest in ensuring the seller pays.

Why D is correct. Outstanding SSD leaves the contract not duly stamped and thus unenforceable — a genuine risk to the buyer, not just the seller.

The other options.

  • A — paying BSD does not fully stamp a contract on which SSD is outstanding.
  • B — an unstamped contract is unenforceable, which is the buyer's concern too.
  • C — IRAS does not waive SSD because BSD was paid; a penalty up to 4× may apply.

Exam note. The buyer is not insulated from the seller's unpaid SSD — the contract stays "not duly stamped" until all duty is paid.

The buyer therefore has a real interest in ensuring the seller pays →

Practise it under exam conditions

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