What's Happening?
A couple is suing a real estate agency, a property agent, and a law firm for over S$406,285 following a '99-1' property transaction that was intended to minimize stamp duty costs. The arrangement involved one partner owning 99% of a property and the other owning 1%, which was meant to reduce the additional buyer's stamp duty (ABSD) payable. The Inland Revenue Authority of Singapore discovered the arrangement, leading to a penalty for the couple. The couple claims they were misinformed about the legality of the arrangement, while the defendants argue that the couple was aware of the risks and that the arrangement was a legitimate commercial strategy.
Why It's Important?
This case highlights the complexities and potential pitfalls in property transactions, especially
those involving tax avoidance strategies. It underscores the importance of understanding legal and tax implications in real estate deals. The outcome of this lawsuit could influence future practices in the real estate industry, particularly regarding the advice given by agents and lawyers. It also raises questions about the responsibilities of legal and real estate professionals in ensuring clients are fully informed of the risks involved in such arrangements.
