Guide · 2026
ABSD on commercial and mixed-use property: what actually applies
By Winfred Quek · 9-minute read · Last reviewed May 2026
Facts verified: May 2026 · Sources linked below
Key Takeaways
- • ABSD is a residential-only duty. Buying commercial property does not trigger ABSD, even as a third or fourth purchase.
- • A mixed-use shophouse is apportioned. ABSD is charged only on the value attributable to the residential part.
- • Commercial property still carries Buyer's Stamp Duty on the non-residential BSD scale.
- • A commercial purchase from a GST-registered seller may attract GST, a cost that does not exist for residential.
- • Buying commercial is a legitimate way to step around ABSD, but the asset has its own economics and risks.
Every few months a buyer comes to me having read that ABSD has made residential property "uninvestable" for them, and asks whether commercial property is the answer. It is a fair question, and the answer is genuinely useful: ABSD does not touch commercial property. But the way that fact is often repeated, second-hand and half-understood, leads people to overlook the duties and costs that do apply.
This piece sets out exactly where ABSD stops, how a mixed-use shophouse is split, and what stamp duty and GST you should still budget for on the commercial side.
Does ABSD apply to commercial property?
No. According to IRAS, Additional Buyer's Stamp Duty is charged on the acquisition of residential property. The legislation defines residential property by zoning and permitted use, and commercial property simply falls outside that definition.
That means a pure commercial asset, a strata office, a shop unit, a warehouse, an industrial B1 or B2 unit, attracts zero ABSD. It does not matter whether it is your first commercial property or your fifth. It does not matter whether you are a Singapore Citizen, a Permanent Resident, a foreigner, or a company. The ABSD rate on commercial property is 0% for everyone.
This is the structural reason commercial property is sometimes used by investors who are priced out of the residential market by ABSD. The 60% foreign rate and the 20% and 30% citizen second and third rates simply do not exist on the commercial side. For a foreign buyer in particular, that is the difference between a viable purchase and an unviable one.
How is ABSD apportioned on a mixed-use shophouse?
The interesting case is the mixed-use property: most commonly the classic Singapore shophouse with a shop or restaurant on the ground floor and a residential unit on the floors above. Here, ABSD does not apply to the whole property and does not skip it entirely. It is apportioned.
According to IRAS, where a property has both a residential and a non-residential component, the consideration is split between the two parts, and ABSD is charged only on the portion attributable to the residential component. The non-residential portion is free of ABSD.
A simplified worked illustration of the principle:
| Component | Apportioned value | ABSD treatment |
|---|---|---|
| Ground-floor shop (commercial) | Portion of price | 0% ABSD |
| Upper-floor residence (residential) | Portion of price | ABSD at buyer's applicable rate |
| Whole shophouse | Total price | ABSD on residential portion only |
Principle illustration only. The actual apportionment is determined by IRAS based on the property's components. Confirm before stamping.
So if you buy a shophouse and the residential portion is assessed at, say, $1.5M of the total, a Singapore Citizen buying it as a second property pays 20% ABSD on that $1.5M residential slice, $300,000, and 0% on the commercial slice. The apportionment is a matter for IRAS to determine; it is not something the buyer and seller can simply agree between themselves to minimise the duty.
What stamp duty does apply to commercial property?
Commercial property is not duty-free. It does not attract ABSD, but it does attract Buyer's Stamp Duty, on a separate scale from residential.
According to IRAS, the BSD scale for non-residential property differs from the residential scale at the top end. Both share the same lower tiers, 1% on the first $180,000, 2% on the next $180,000, 3% on the next $640,000, but the non-residential scale uses a 4% rate on the remaining amount above $1M, rather than the 5% and 6% upper tiers that apply to residential property. Always confirm the current non-residential BSD scale with IRAS before stamping, as the structure can be revised.
Where a property is mixed-use, the BSD itself is also apportioned: the residential portion is charged on the residential BSD scale and the non-residential portion on the non-residential scale.
And then there is GST
This is the cost that catches commercial buyers who came from the residential world. The sale of commercial property by a GST-registered seller is a taxable supply and may attract GST. The sale of residential property is exempt from GST, so a residential buyer never sees this line.
A buyer who is itself GST-registered may be able to recover the GST as input tax, subject to the GST rules. A buyer who is not GST-registered cannot, and for them the GST is a real, unrecoverable cost on top of the price and the BSD. Anyone modelling a commercial purchase must check the seller's GST status and their own ability to claim input tax before assuming the headline price is the cost.
Commercial vs residential: the stamp duty picture side by side
| Cost | Residential property | Commercial property |
|---|---|---|
| Buyer's Stamp Duty | Residential BSD scale | Non-residential BSD scale |
| Additional Buyer's Stamp Duty | 0% to 60%+ by profile | None |
| GST on purchase | Exempt | May apply (GST-registered seller) |
| Counts toward residential property count | Yes | No |
General comparison. Mixed-use property is apportioned across both columns. Confirm specifics with IRAS and your conveyancing lawyer.
Winfred's Take
"No ABSD on commercial" is true, and for some buyers it genuinely reopens the door. But I am cautious when a client wants to buy commercial only because of the ABSD saving. Commercial property is a different asset class: financing terms differ, the loan-to-value can be tighter, tenants and vacancy behave differently, and you take on GST exposure you never had with residential. The right reason to buy commercial is that the commercial asset, on its own merits, is a sound investment. The ABSD saving should be a tailwind, not the whole thesis. If the only thing making the deal work is the absence of ABSD, the deal is probably not strong enough.
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Winfred Quek · CEA R073319H · Crestbrick
Frequently asked questions
Do foreigners pay ABSD on commercial property in Singapore?
No. The 60% foreign ABSD rate applies only to residential property. A foreigner buying a pure commercial asset, such as a strata office or shop, pays no ABSD. They still pay the non-residential BSD and any applicable GST.
Does buying commercial property count toward my residential property count?
No. Commercial property does not count toward the residential property count that determines your ABSD rate. You can own commercial property and still buy a residential home at the first-property ABSD rate.
How is ABSD calculated on a shophouse with a shop and a flat?
The purchase price is apportioned by IRAS between the commercial and residential components. ABSD is charged at the buyer's applicable rate on the residential portion only; the commercial portion attracts no ABSD.
Is GST payable when I buy commercial property?
The sale of commercial property by a GST-registered seller may attract GST. Residential property sales are exempt. A GST-registered buyer may be able to claim the GST as input tax; an unregistered buyer generally cannot. Check both parties' GST positions before committing.
If I convert a commercial unit to residential use, does ABSD apply later?
ABSD is assessed at the point of purchase, based on the property's status at that time. A later change of use does not retroactively impose ABSD on a past purchase, but use changes have their own planning and regulatory requirements. Take advice before assuming any conversion is permitted.
Sources & References
Winfred Quek is an Associate Marketing Consultant at Crestbrick Pte Ltd (CEA Licence L31010886H), advising Singapore upgraders, investors, and family offices. CEA R073319H. The information on this page is general and does not constitute financial, investment, tax, or legal advice.