When investing in commercial property in Singapore – whether it’s an office unit, retail shop, shophouse, or industrial space – one of the most common questions investors ask is:

“What taxes do I need to pay?”

Unlike residential property, commercial property comes with a very different tax framework. Understanding these taxes upfront helps you budget better, avoid surprises, and calculate your true investment returns.

This guide covers all the key taxes in 2025: BSD, ABSD, SSD, GST, and property tax.

1. Buyer’s Stamp Duty (BSD) – Mandatory for All Buyers

All buyers of commercial property in Singapore must pay Buyer’s Stamp Duty (BSD).

As of 2025, BSD is calculated as:

  • 1% on the first S$180,000

  • 2% on the next S$180,000

  • 3% on the next S$640,000

  • 4% on the next S$500,000

  • 5% on the next S$1.5 million

Example:
For a S$5 million commercial property:

  • BSD = S$219,600

Applies to both locals and foreigners.

Budget 2023 BSD

2. Additional Buyer’s Stamp Duty (ABSD) – Not Applicable

One of the biggest advantages of commercial property investment in Singapore is that ABSD does not apply.

  • Residential property buyers (especially foreigners and companies) face ABSD rates of up to 60% and 65% respectively.

  • Commercial property buyers (locals and foreigners) do not pay ABSD at all.

This makes commercial property highly attractive for foreign investors who want to avoid cooling measures.

3. Seller’s Stamp Duty (SSD) – Only for Industrial Properties

SSD is not applicable to most commercial properties like offices or retail. However, it applies to industrial properties (factories, warehouses, etc.) if sold within a short holding period.

As of 2025, SSD on industrial property:

  • Sold within 1 year: 15% of price

  • Sold within 2 years: 10%

  • Sold within 3 years: 5%

  • Sold after 3 years: No SSD

No SSD for offices, shops, or commercial shophouses.

4. Goods and Services Tax (GST) – 9% in 2025

If you buy commercial property from a GST-registered seller (usually developers or corporations), GST is chargeable at 9% (2025 rate).

  • GST applies to the purchase price.

  • If you’re buying from an individual seller who is not GST-registered, no GST applies.

Example:

  • A retail shop sold at S$2 million by a GST-registered company → GST = S$180,000.

Investors who own GST-registered businesses may be able to claim input tax credits.

5. Property Tax (Annual)

All property owners in Singapore must pay annual property tax.

  • For commercial and industrial properties, tax is calculated at 10% of the Annual Value (AV) of the property.

  • The AV is the estimated gross annual rent if the property were rented out.

Example:

  • Office unit with AV of S$120,000 → Property tax = S$12,000 per year.

6. Income Tax on Rental Income

If you rent out your commercial property, the net rental income (after deducting allowable expenses) is taxable.

  • For individuals: Taxed at personal income tax rates (up to 24%).

  • For companies: Taxed at corporate tax rate (17%).

Allowable expenses include:

  • Property tax

  • Maintenance costs

  • Loan interest

Summary of Taxes on Commercial Property (2025)

Tax Type Applies? Key Points
BSD Yes Progressive rates up to 5%
ABSD No Big advantage vs residential
SSD Yes (only for industrial) 15% → 10% → 5% → 0%
GST Yes (if seller is GST-registered) 9% in 2025
Property Tax Yes 10% of Annual Value
Income Tax Yes (if rented) Personal or corporate rate applies

Practical Tips for Investors

  • Always factor BSD + GST into your purchase budget.

  • If buying industrial property, plan to hold at least 3 years to avoid SSD.

  • Check if seller is GST-registered – this can add a big cost if you are not GST-registered.

  • Consider setting up a company structure to optimise tax on rental income.

External References

Conclusion

When buying or selling commercial property in Singapore, taxes are a key consideration. The good news is that ABSD does not apply, which gives commercial assets a strong advantage over residential property.

However, investors must account for BSD, GST, SSD (for industrial), property tax, and rental income tax. By factoring these in, you’ll get a clearer picture of your net returns.

If you’re exploring commercial investments – from offices to shophouses – visit ShophouseOffice.com for listings and tailored advice.