Buying Property Through Trust Singapore 2025: Legal and Tax Implications Guide

Executive Summary

Singapore's property trust framework enables individuals and entities to hold residential and commercial real estate through trust structures, subject to specific legal requirements and tax obligations. The regulatory landscape encompasses the Trustees Act 1967, Residential Property Act, and various tax statutes that govern trust property ownership. Recent regulatory updates in 2025 have enhanced disclosure requirements for ultimate beneficial owners and strengthened anti-money laundering obligations for trustees. Property acquisitions through trusts attract standard stamp duties including Additional Buyer's Stamp Duty (ABSD) where applicable, while trust income distributions are subject to income tax provisions under the Income Tax Act 1947.

Legal Framework in Singapore

The legal foundation for property trusts in Singapore operates under multiple legislative instruments. The Trustees Act 1967 establishes the fundamental framework for trust creation, administration, and trustee duties, while the Residential Property Act regulates foreign ownership restrictions for residential properties held through trust structures [1].

Trust structures must comply with the Conveyancing and Law of Property Act 1886 for property transfers and registrations. The Housing and Development Act contains specific provisions prohibiting certain trust arrangements over HDB properties, particularly section 58(9)-(11) which restricts resulting and constructive trusts over public housing units [2].

The regulatory framework distinguishes between express trusts, resulting trusts, and constructive trusts, each carrying different legal implications for property ownership. Express trusts created through deliberate trust deeds face fewer restrictions compared to resulting or constructive trusts, which are subject to stricter regulatory oversight particularly for residential properties.

Trust Structures for Property Ownership

Singapore recognizes several trust arrangements for property acquisition, each serving distinct purposes and carrying specific legal characteristics:

Express Trusts - Created through formal trust deeds where settlors deliberately transfer property to trustees for specified beneficiaries. These trusts provide maximum flexibility and clarity in property ownership arrangements.

Resulting Trusts - Arise by operation of law when property is purchased in one person's name but another person provides the purchase consideration. These arrangements face significant restrictions under residential property legislation.

Constructive Trusts - Imposed by courts to prevent unjust enrichment or fraud, typically arising from informal arrangements or contributions to property purchases without legal title.

Bare Trusts - Simple arrangements where trustees hold legal title but beneficiaries retain beneficial ownership and control over property decisions.

Discretionary Trusts - Complex structures where trustees exercise discretion over benefit distributions among multiple potential beneficiaries, commonly used for family wealth planning.

Property Acquisition Process Through Trusts

The process for acquiring property through trust structures involves several sequential steps:

1. Trust Establishment - Draft and execute trust deed specifying trustee powers, beneficiary rights, and property management provisions
2. Trustee Appointment - Select qualified trustee (individual or corporate) meeting regulatory requirements
3. Property Selection - Identify suitable property considering trust objectives and regulatory restrictions
4. Purchase Agreement - Execute sale and purchase agreement in trustee's name as legal owner
5. Financing Arrangements - Secure mortgage financing if required, noting trust structure implications
6. Stamp Duty Payment - Calculate and pay applicable stamp duties including ABSD where relevant
7. Property Registration - Register legal title with Singapore Land Authority in trustee's name
8. Ongoing Compliance - Maintain trust records, file tax returns, and fulfill regulatory obligations

Trustees must ensure compliance with foreign ownership restrictions when beneficiaries include non-Singapore citizens or permanent residents. The government maintains strict approval requirements for foreign beneficiaries acquiring residential properties through trust arrangements [3].

Tax Implications and Obligations

Property trusts in Singapore face multiple tax obligations across different categories:

Stamp Duties - Trust property acquisitions attract standard stamp duty rates plus Additional Buyer's Stamp Duty (ABSD) based on beneficiary profiles. ABSD rates vary depending on whether beneficiaries are individuals, entities, Singapore citizens, permanent residents, or foreigners [4].

Property Tax - Annual property tax applies to trust-owned real estate based on annual value, with rates varying between owner-occupied and non-owner-occupied properties.

Income Tax - Rental income generated by trust properties is subject to income tax under the Income Tax Act 1947. Trust income distribution to beneficiaries follows specific tax treatment rules depending on beneficiary residence status and income character.

Goods and Services Tax (GST) - Commercial property transactions may attract 9% GST, while residential properties are generally exempt unless sold by GST-registered developers.

Capital Gains - Singapore does not impose capital gains tax, but gains from property flipping or trading activities may be treated as income subject to tax.

Regulatory Compliance Requirements

Trustees managing Singapore property must fulfill comprehensive compliance obligations:

• Anti-Money Laundering (AML) - Implement customer due diligence procedures and report suspicious transactions
• Ultimate Beneficial Owner (UBO) Disclosure - Maintain and update beneficial ownership information for regulatory reporting
• Trust Record Keeping - Preserve trust documents, accounts, and transaction records for minimum prescribed periods
• Tax Filing - Submit annual income tax returns for trust income and property tax declarations
• Regulatory Reporting - Comply with specific reporting requirements for residential property trusts with foreign beneficiaries

The 2025 regulatory updates enhanced trustee obligations regarding record-keeping standards and disclosure requirements, particularly for trusts involving high-value residential properties or foreign beneficial interests [5].

Comparison of Trust Types for Property Ownership

Foreign Ownership Restrictions

Singapore maintains strict controls over foreign ownership of residential properties through trust structures. The Residential Property Act requires government approval for foreign persons (including companies with foreign shareholding above specified thresholds) to acquire residential properties.

Key restrictions include:

• Foreign individuals generally prohibited from acquiring landed residential properties without specific approval
• Trust companies with foreign beneficiaries face enhanced scrutiny for residential property acquisitions
• Good Class Bungalow (GCB) properties subject to additional restrictions for foreign ownership
• No approvals granted for foreign GCB purchases since 2021, including through trust structures [3]

Trustees must obtain prior approval from the Ministry of Law for residential property acquisitions where beneficiaries include foreign persons. The approval process considers economic contribution, Singapore nexus, and compliance with broader property market policies.

Recent Legal Developments

The Singapore legal landscape for property trusts has evolved significantly with 2025 regulatory updates:

• Enhanced disclosure requirements for ultimate beneficial owners in property transactions
• Strengthened anti-money laundering obligations for trustees and trust service providers
• Updated record-keeping standards requiring detailed documentation of trust arrangements
• Increased penalties for non-compliance with trust regulatory requirements
• Streamlined approval processes for certain categories of trust property acquisitions

These developments reflect Singapore's commitment to maintaining transparency in property ownership while facilitating legitimate trust arrangements for wealth management and succession planning.

Conclusion

Property acquisition through trust structures in Singapore operates within a comprehensive legal framework balancing wealth management flexibility with regulatory oversight. The system accommodates various trust types while maintaining strict controls over foreign ownership of residential properties. Trustees must navigate complex compliance requirements including tax obligations, disclosure duties, and ongoing regulatory responsibilities. Recent 2025 updates have enhanced transparency requirements without fundamentally altering the core trust framework, ensuring Singapore remains an attractive jurisdiction for legitimate property trust arrangements while meeting international standards for anti-money laundering and beneficial ownership disclosure.

Sources

[1] Trustees Act 1967 - Primary legislation governing trust creation and administration in Singapore

[2] Entitlement and Eligibility – Regulating Trusts Over HDB Properties - Legal analysis of HDB trust restrictions by Singapore Law Gazette

[3] Written Answer by Second Minister for Law Edwin Tong to PQ on Good Class Bungalows Sold to Trust Companies - Official government statement on foreign ownership restrictions through trusts

[4] Private Client Laws and Regulations Singapore 2025 - Comprehensive analysis of Singapore tax and regulatory framework for private clients

[5] Trust Regulatory Regime Updated June 2025 - Legal analysis by Rajah & Tann on 2025 trust regulatory updates

[6] Written Answer by Second Minister for Law on Ultimate Beneficial Owners - Government disclosure on beneficial ownership reporting requirements

[7] Property Trust Formation (Singapore Legal Advice) - Legal Article

[8] Singapore Trust Act Analysis (Attorney-General’s Chambers) - Official Legislation