99-to-1 Shareholding: Smart Move or ABSD Loophole Gone Wrong?

If you’ve been following property news lately, you’d confirm—this “99-to-1 loophole” thing has been everywhere. Headlines like “IRAS to claw back S$60 million from buyers who used 99-to-1 loophole” sure caught a lot of eyeballs.

So what’s the big deal? Is 99-to-1 shareholding illegal? Or is it just another creative hack to siam (avoid) ABSD? Let’s break it down simply.

What’s this 99-to-1 arrangement all about?

In Singapore, when two people co-own a property, there are two main ways to do it:
1) Joint Tenancy – both own equally, 50-50, no separate shares. Common for couples or family.
2) Tenancy-in-Common – each person owns a specific share. Could be 50:50, 70:30, or even 99:1.

So technically, 99-to-1 is not illegal. It’s just another way of splitting ownership. One person holds 99%, the other 1%. Simple.

Then why is IRAS cracking down?

Here’s where things get tricky. The cases IRAS is after are those so-called “two-step” transactions.

How it works:

Party A (who doesn’t own any property yet) buys the whole house under their name.

Shortly after, they transfer 1% to Party B (who already owns another property).

Why do this? Because if Party B bought together with A from the start, they’d need to pay ABSD on the entire property. But by doing this trick, Party B only pays ABSD on that tiny 1%. That’s what IRAS calls tax avoidance.

And now, they’re clawing back millions and slapping a 50% surcharge on the ABSD amount. Ouch.

Are there legit reasons to use 99-to-1?

Yes, of course. Not everyone is trying to game the system. Some valid uses include:

Fairness: If one person puts in more money, then it’s fair they hold a bigger share.

Bigger loan eligibility: With two names, banks assess combined income, so easier to get a bigger loan.

Future planning (decoupling): Couples may plan ahead. With a 99:1 split, later the 1% owner can transfer their share, “freeing” themselves to buy another property without ABSD (since they technically don’t own any property after that).

That’s different from the “100-sell-1” loophole, because here, both parties were co-owners right from the start.

So what now for buyers?

Bottom line—don’t play play with these “shortcuts.” IRAS has made it very clear: if you try funny business just to avoid ABSD, you’ll kena clawback plus penalty.

If you’re thinking of doing any 99-to-1 structure, make sure you talk to a proper tax advisor or lawyer. Otherwise, what looks like a clever trick now could end up costing way more later.

👉 What do you think? Is 99-to-1 still worth considering, or better to stay away given the recent crackdown?