Many parents view purchasing a home or investment property for their children as an act of love and security. It seems like the ultimate head start in a competitive housing market, ensuring that their child never has to worry about where they’ll live. However, good intentions can lead to complicated financial, legal, and emotional outcomes. Before making that commitment, it’s worth examining the potential downsides.

1. Tax and legal complications

Buying or transferring property under your child’s name is far more complex than simply paying for it.

• Additional Buyer’s Stamp Duty (ABSD): In Singapore, parents who already own residential property must pay Additional Buyer’s Stamp Duty if they purchase another home. Some parents try to avoid ABSD by buying under their child’s name, but authorities have tightened rules to block such loopholes.
• Gift tax considerations: Singapore does not impose gift tax, but gifting property still triggers Buyer’s Stamp Duty and other obligations.

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