When A “Common” Property Strategy Becomes A $180K Problem

What sort of advice do you expect a realtor to give, when it comes to your property transaction? 

Sometime back, I wrote about the 99-1 arrangement and how it relates to property ownership and the legal issues surrounding it. Just last month, a case related to this issue came to an end when a buyer dropped their lawsuit against ERA Realty, the agent in question, and a conveyancing law firm.

In brief, the buyer had used a 99-1 ownership structure when purchasing a new launch unit at Normanton Park, with his father taking a one per cent share of the property. It was reported that the arrangement was meant to reduce the Additional Buyer’s Stamp Duty (ABSD) payable.

In a typical 99-1 arrangement, the ABSD would apply only to the 1% share held by the ABSD-liable party, rather than to the full property value.

In December 2024, however, IRAS disregarded the structure and imposed $180,945 in additional stamp duty and penalties. The buyer then sued the agent, agency and law firm, alleging that the 99-1 arrangement that was presented to them as a common and accepted method.

The defendants, in turn, denied giving tax or legal advice and argued that their roles did not extend to guaranteeing the legality of the arrangement.

This case garnered a lot of attention, but before it could be tested in court, the buyer discontinued the lawsuit (with each party bearing its own costs)

I do feel for the buyer here.

From personal experience, I saw on the ground that the 99-1 arrangement was widely known. It was discussed online, surfaced regularly in public Q&A forums, and was treated as normal as a discussion on sell-one-buy-two tactics. It was a part of the property buying discourse.

For almost a decade, this went on with no high-profile public enforcement to shut it down. It was only in recent years that scrutiny tightened and some uncertainty began to set in among those who’d used the structure.

A lot of this, I feel, comes down to what kind of agents should give, and what kind of advice we should be taking from them.

Far be it from me to blame agents for all of this or their clients. My point is that more often than not, buyers and sellers are seldom experts (barring a few seasoned investors) to the nuances of financing, tax laws, and transaction processes. Prevailing market knowledge tends to blur into one face: that of their realtor.

The expectation is that the agents should know everything. From how to get a different valuation (a mortgage broker’s job), to how the CPF rules work (something they should be calling CPF about), to, yes, the consequences of arrangements like 99-1 holding structures.

There’s a tendency for agents to appear to look inexperienced, or sometimes even incompetent (depending on how judgmental a client might get) if they don’t at least appear familiar with all this.

And that’s not really the fault of the client either, since most buyers and sellers go through only a handful of property transactions in their entire lives. Most are highly dependent on the licensed professionals who guide them, amid a sea of migraine-inducing jargon and acronyms. 

CEA does have requirements that property agents act in their clients’ best interests. 

But this could place a disproportionately high burden on agents. Providing the best advice on tax questions, financing rules, and regulatory interpretations is a big challenge since these are entire professional domains in their own right. There’s a big difference between knowing about stack facings and buyer profiles in Bedok vs. Jurong, versus knowing how IRAS might interpret a complex ownership structure. 

These obligations set out by CEA also seem to be grounded in the principles. They define what agents should aim to do with their advice, but they’re less explicit about how the advice should be framed, where its boundaries lie, or how those boundaries are relayed to clients.

Now I’m not saying agents should be completely barred from giving this sort of tangential advice. 

I know that’s unrealistic, given how much overlap there is between these topics. What may be workable is a requirement for agents to clearly flag when a discussion strays beyond their core role. Agents can still explain how bank valuations or a 99-1 arrangement is commonly interpreted, but they should also put it in writing that this is not their main field.

Saying “your lawyer is the one who should be doing this, take their word over mine” doesn’t weaken the agent’s role but strengthens it.

Requiring this to be explicit and written down also protects agents in turn. It helps prevent conversational opinions from being mistaken as professional advice or actual endorsement. And if something ever does go wrong, it will be much clearer where the bad or negligent advice came from. 

There really isn’t much incremental cost to doing this, and it may help to prevent these sorts of messy lawsuits in future. 

Meanwhile, in other property news…

• The February BTO launch sites are out, and as always, here’s the Ultimate Guide for them so you can start planning. 
• There may have been fewer BTO launch sites for February, but that’s because it’s part of something bigger. Check out these upcoming areas, some of which are the first in 40 years. 
• Singapore’s CBD office rents have now been rising for seven straight quarters; but who’s behind this? 
• HDB flats have an unusual relationship with lease decay, and that’s what we’re taking a look at on Stacked Pro. Find out the truth about how lease decay sinks in. 

Weekly Sales Roundup (26 January - 01 February)

Top 5 Most Expensive New Sales (By Project)

PROJECT NAME	PRICE S$	AREA (SQFT)	$PSF	TENURE
NEWPORT RESIDENCES	$8,650,000	2067	$4,185	FH
ZYON GRAND	$4,875,000	1518	$3,212	99 yrs (2024)
THE CONTINUUM	$4,769,000	1690	$2,822	FH
NAVA GROVE	$4,585,100	1722	$2,662	99 yrs (2024)
GRAND DUNMAN	$4,352,000	1690	$2,575	99 yrs (2022)

Top 5 Cheapest New Sales (By Project)

PROJECT NAME	PRICE S$	AREA (SQFT)	$PSF	TENURE
NARRA RESIDENCES	$998,000	517	$1,932	99 yrs
NEWPORT RESIDENCES	$1,298,000	431	$3,015	FH
THE COLLECTIVE AT ONE SOPHIA	$1,363,000	484	$2,814	99 yrs (2023)
THE CONTINUUM	$1,428,000	560	$2,551	FH
COASTAL CABANA	$1,614,000	915	$1,764	99 yrs

Top 5 Most Expensive Resale

PROJECT NAME	PRICE S$	AREA (SQFT)	$PSF	TENURE
SEVEN PALMS SENTOSA COVE	$23,892,159	8794	$2,717	99 yrs (2007)
TWENTYONE ANGULLIA PARK	$10,800,000	3122	$3,460	FH
CUSCADEN RESERVE	$6,000,000	1873	$3,204	99 yrs (2018)
URBAN SUITES	$5,600,000	2045	$2,738	FH
MARINA BAY RESIDENCES	$5,398,000	1981	$2,725	99 yrs (2005)

Top 5 Cheapest Resale

PROJECT NAME	PRICE S$	AREA (SQFT)	$PSF	TENURE
HIGH PARK RESIDENCES	$656,888	388	$1,695	99 yrs (2014)
THE OCTET	$670,000	431	$1,556	FH
METRO LOFT	$715,000	452	$1,582	FH
KINGSFORD WATERBAY	$720,000	484	$1,486	99 yrs (2014)
EASTWOOD REGENCY	$735,000	452	$1,626	FH

Top 5 Biggest Winners

PROJECT NAME	PRICE S$	AREA (SQFT)	$PSF	RETURNS	HOLDING PERIOD
VILLAGE TOWER	$3,800,000	1830	$2,077	$2,140,000	17 Years
THE LUCENT	$3,358,000	2422	$1,387	$1,908,000	17 Years
THE SHELFORD	$2,680,000	1076	$2,490	$1,779,342	24 Years
COSTA RHU	$3,231,000	1776	$1,819	$1,707,500	30 Years
KOVAN RESIDENCES	$3,158,000	1776	$1,778	$1,684,000	16 Years

Top 5 Biggest Losers

PROJECT NAME	PRICE S$	AREA (SQFT)	$PSF	RETURNS	HOLDING PERIOD
CUSCADEN RESERVE	$3,042,000	936	$3,248	-$523,000	4 Years
MARINA BAY SUITES	$2,900,000	1593	$1,820	-$368,000	16 Years
120 GRANGE	$1,610,000	570	$2,822	-$210,000	8 Years
THE URBANITE	$1,225,000	936	$1,308	-$105,000	13 Years
UPTOWN @ FARRER	$1,070,000	538	$1,988	-$1,740	5 Years

Top 5 Biggest Winners (ROI%)

PROJECT NAME	PRICE S$	AREA (SQFT)	$PSF	ROI (%)	HOLDING PERIOD
SIGNATURE PARK	$1,740,000	1033	$1,684	225%	19 Years
PINEHURST CONDOMINIUM	$2,425,000	1475	$1,644	223%	19 Years
THE SHELFORD	$2,680,000	1076	$2,490	198%	24 Years
SPRINGDALE CONDOMINIUM	$1,520,000	926	$1,642	183%	19 Years
QUEENS	$2,138,000	1184	$1,806	175%	26 Years

Top 5 Biggest Losers (ROI%)

PROJECT NAME	PRICE S$	AREA (SQFT)	$PSF	ROI (%)	HOLDING PERIOD
CUSCADEN RESERVE	$3,042,000	936	$3,248	-15%	4 Years
120 GRANGE	$1,610,000	570	$2,822	-12%	8 Years
MARINA BAY SUITES	$2,900,000	1593	$1,820	-11%	16 Years
THE URBANITE	$1,225,000	936	$1,308	-8%	13 Years
UPTOWN @ FARRER	$1,070,000	538	$1,988	0%	5 Years

Transaction Breakdown

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