So Is The 99-1 Property Split Strategy Legal Or Not?

Most people assume it is, since it’s something that’s been going on for over a decade.

The idea is that one co-owner (most often a spouse) owns 99 per cent of the property, whilst another owns just one per cent.

Later, when the funds exist for each one to own a separate property, the owner of the one per cent transfers it to her spouse, thus incurring Buyers Stamp Duty on just the one per cent. She’s then free to buy a property without incurring Additional Buyers Stamp Duty (ABSD), since she has a property count of zero.

For the longest time, this has been the basis of the “sell one, buy two” strategy. But there was an interesting case of late that shed light on an unasked question: is there any illegality involved here?

Here’s the case in question:

A couple bought a Hillcrest Arcadia condo in a 99:1 ownership split. One spouse claimed she owned 99 per cent of the $1.865 million unit, because – well, that’s what the title said. It was a sweet gesture from her then-boyfriend to soothe her fears of infidelity. Would he do something like that if he were intending to cheat? Of course not, he’d lose his home.

(And, ahem, there’s the added side benefit of buying a second home without ABSD if the chance comes.)

But love is eternal for as long as it lasts. So when the couple split less than a year later, she declared the whole 99 per cent to be hers, since that’s what it said on paper.

But two things happened:

First, the High Court wasn’t having it: since her boyfriend bankrolled most of the purchase, the judge ruled he actually owned 54 per cent, based on the paper trail of payments; so her 99 per cent claim was a no-go (Moral of the story: you can fake your relationship on paper, but not your CPF contributions.)

Second, this interesting bit from the case:

“The pair admitted that they planned for Mr Ngor to transfer and pay taxes on his one per cent share to Ms Wong when they decide to buy a second property. Justice Lee said there was no nefarious intention or knowledge that this would be an unlawful act. Moreover, the plan was never carried out.”

The important turn of phrase here is “would be an unlawful act.” This would suggest that, whilst the Court didn’t punish them – partly because the plan was never executed – it wasn’t okay for them to plan to dodge the ABSD.

Here’s something from a parliamentary response to take note of:

“Whether a ‘99-to-1’ arrangement involves tax avoidance depends on the facts and circumstances surrounding the specific case. Should IRAS determine that tax avoidance has occurred, it will recover the rightful amount of stamp duty from the buyers, and may impose a 50 per cent surcharge on the additional stamp duty payable. There is no statutory time limit for stamp duty audits.”

That would suggest holding a property in a 99-1 tenancy-in-common split is not per se illegal under Singapore law. But, and this is a big “but,” authorities can treat any contrived use of that structure as tax avoidance.

But I wonder how clearly all of this is communicated to us

I’ve spoken to more than a few people who said their property agent or lawyer assured them it was perfectly fine – no risks, no problem. And then they get an audit letter a year later and realise they’ve been sold half a story.

Maybe it’s time we stop giving buyers unrealistic expectations and sending them into legal grey areas. If someone is going to recommend 99-1 as a strategy, then they’d better spell out the risks; not just the headline savings. And if they provided any kind of guarantees they shouldn’t, well, they should shoulder more of the responsibility when the reckoning comes.

This is especially true in 2025 when property prices are higher, and penalties hit harder.

Meanwhile, in other property news:

• There are plenty of factors to consider when buying a property, but what are the most important? Here’s a look at what to prioritise.
• Subletting is hardly a new idea; and for some it can be a great way to secure a much desired location. But it carries hidden risks that you need to brace for.
• The former Robertson Walk is back, but now as Robertson Opus. Is this 999-year project worth considering?
• District 7 now has one of the biggest price gaps between new and resale condos; join our Stacked Pro readers in finding whether resale is simply the wiser choice here.

For more on the Singapore property market as it unfolds, follow us on Stacked.

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