Condo buyers, agents jailed for backdating Option to Purchase to evade higher ABSD

27-Sep-2021 Intellasia | PropertyGuru | 3:52 AM Print This Post

The buyers, who are a married couple, were sentenced to six weeks’ jail and fined $276,000. The property agent and seller’s agent were handed an eight-week jail term each.

A married couple and two property agents were jailed on 24 September for backdating an Option to Purchase (OTP) to avoid paying higher Additional Buyer’s Stamp Duty (ABSD), reported Channel News Asia (CNA).

Daniel Halim and his wife Lee Liu Ying were sentenced to six weeks’ jail and fined $276,000, which is four times the amount of ABSD evaded.

Property agents Mu Shen and Loy Thye Wei were sentenced to eight weeks’ jail each.

CNA noted that the case was the “first prosecution under the Stamp Duties Act for executing an OTP when all the facts and circumstances were not fully set out”.

The court heard that Mu served as the couple’s property agent in 2018, while Loy was the agent for the seller.

Halim and Lee – who already owned a condominium unit in West Coast Crescent and an HDB unit in Strathmore Avenue – wanted to purchase a fourth-floor condominium unit at Sandy Palm in Loyang, which they viewed on 7 July 2018.

However, the Government introduced cooling measures on 5 July 2018, in which the ABSD for Singaporeans purchasing their third and subsequent residential property was raised from 10% to 15%.

During their second viewing of the property on 8 July 2018, the couple agreed to the purchase price of $1.38 million, but told Mu that they would only push through with the transaction if the OTP was backdated as they no longer had enough cash to cover the higher ABSD.

With this, Mu instigated Loy to backdate the OTP to 4 July.

This comes as residential properties bought on or after 6 July could still qualify for the 10% rate, subject to certain conditions. These included the OTP being granted on or before 5 July.

To add a “cloak of legitimacy”, Halim also backdated his option cheque to 4 July 2018.

On 24 July 2018, the couple executed the OTP, and evaded $69,000 in ABSD.

The seller, who was unaware that Loy had backdated the OTP, raised the latter’s commission to 1.5% from 1% as a reward for closing the deal at that selling price. Loy agreed to share the higher commission with Mu.

Court records did not indicate how the offences were discovered, stating only that a principal tax investigator with the Inland Revenue Authority of Singapore (IRAS) had investigated the case.

In a statement following the sentencing, the IRAS stated that it “takes a very serious view of any individual who evades stamp duty by executing instruments containing false information”.

It also urged individuals who have knowledge of such evasions to contact IRAS, adding that a reward based on 15% of the tax recovered, but capped at $100,000, awaits informants of successful cases.

For omitting information in the OTP with the intention of evading duties, the accused could have been sentenced to up to three years of imprisonment, fined up to $10,000, or both.

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Cheryl Chiew, Digital Content Specialist at PropertyGuru, edited this story. To contact her about this story, email: [email protected]

 

Category: PRAsia, PropertyAsia

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