Eligible single Singaporean citizens aged 55 and above will now be able to claim the additional buyer's stamp duty (ABSD) refund on their second private property if they are downsizing, announced Deputy Prime Minister and Finance Minister Lawrence Wong in his Budget speech on Friday (Feb 16).

Seniors will be eligible to claim a refund of ABSD paid on their lower-value replacement private residential property if they sell their first residential property within six months. The ABSD refund will take effect from Feb 16.

Previously, only Singaporean married couples with an existing residential property enjoyed the ABSD refund on their replacement private property.

Read also: OPINION: Is it time to review ABSD rates?

According to Marcus Chu, CEO of ERA Singapore, the change is "timely". "The ABSD concession extended to eligible seniors will help them unlock some monies from their existing property to support their retirement," he says.

The ABSD on the second property is 20% for Singaporeans since April 2023. This group of homebuyers have, therefore, been restricted to HDB resale flats when downsizing.

Besides helping seniors cash out for retirement, Lee Sze Teck, senior director of data analytics at Huttons Asia, says that the change may increase the demand for smaller private homes, such as one- and two-bedroom units.

According to Ismail Gafoor, CEO of PropNex Realty, the ABSD concession for this segment of buyers is unlikely to affect sales volume. "The new policy is needs-based and focuses on a specific market segment," he says. "It will likely not move the needle much when it comes to spurring sales."

The policy change is mainly to help seniors who wish to right-size by cashing out of their first property to shore up their retirement fund, adds Gafoor.