Every property transaction in Singapore is now recorded online, and IRAS is good at spotting patterns. Two recent High Court cases show exactly what happens when a stamp-duty workaround stops being a workaround and becomes a legal problem.
Buying a property in someone else's name — a spouse, child, parent or friend — to reduce or avoid Additional Buyer's Stamp Duty (ABSD) has become significantly riskier now that all property transactions are recorded and cross-checked digitally. Two recent High Court cases show how differently these arrangements can end up.
Property columnist Tan Ooi Boon put it plainly in a recent piece: never use a proxy to buy property just to save on taxes — it can cause much bigger losses later. That warning has extra weight in Singapore today, where every property transaction is recorded online and the tax authority is practised at spotting suspicious patterns designed to sidestep Additional Buyer's Stamp Duty.
The most well-known version of this workaround is the so-called "99-to-1" arrangement: a buyer purchases a property in their own name for the overwhelming majority — 99% — and transfers a token 1% stake to a relative, usually a parent, who needs to hold enough of a stake to qualify for a bank loan. In practice, this structure has often been used to disguise what is really an attempt to avoid the ABSD that would apply if the true ownership split were declared upfront.
IRAS has cracked down hard on this pattern. Because every transaction is logged and timestamped, unusual sequences — a property bought, then a small stake transferred to a relative shortly after, particularly around the time ABSD rates changed — are exactly the kind of pattern the tax authority is set up to flag.
Before ABSD was extended to properties held in trust for identifiable beneficiaries in May 2022, it wasn't uncommon for parents to buy investment properties in their children's names. The catch: doing so means the property legally belongs to the child, not the parent — however much of the purchase price the parent actually paid.
In one case now before the courts, a woman had put a S$2 million apartment in trust for her son when he was six years old. Years later, after the property's value had risen by about S$500,000, she wanted to sell it. The High Court rejected her application, because she was unable to demonstrate that the sale would actually benefit her son — the legal owner — rather than simply return capital and gains to her.
The rule that trips people up: even where a court does approve the sale of a child's trust property, the parent cannot simply pocket the proceeds. The money must go into a separate account held for the beneficiary. A parent who disregards this, or who is found to have set up the trust purely as a sham to avoid ABSD, becomes liable for the duty itself plus a 50% penalty surcharge — which can rise to as much as four times the duty owed in more serious cases.
A second case shows the opposite outcome, and illustrates just how fact-specific these disputes are. A man bought a S$5 million home in trust for his adult son, using proceeds from his other properties — an arrangement likely intended, at least in part, to manage his ABSD exposure. About a year later, his marriage broke down and headed toward divorce. His son then applied to the court to terminate the trust and become the property's immediate legal owner.
The father pushed back, arguing the asset had always really been his, and that the trust was a sham designed to avoid ABSD. The High Court disagreed. The evidence showed the father had genuinely intended to give the property to his son — he had engaged a lawyer to set up what was explicitly an "irrevocable trust," and would have been advised at the time that he could not later claim the property back for himself. The court ordered the trust terminated and the home transferred outright to the son.
"As the buyers in these cases already own properties, they should do their sums properly and consider whether it is still worth investing in another property if the arrangements they use put them at risk of losing more later," Tan wrote.
A third example underscores that these arrangements aren't limited to parent-child structures. A woman originally bought a property solely in her own name, then transferred a 1% stake to another woman she regarded as her "godmother" — who had actually paid the down payment and mortgage — and signed an agreement stating that the godmother was the property's true owner. IRAS caught the arrangement, and the outcome was the same: liability for the ABSD owed, plus the 50% penalty surcharge.
The common thread across all three examples is that the legal form of ownership, not who actually paid or who was "meant" to benefit, is what the law and the courts ultimately look to. Getting that structure wrong — whether by accident or by design — can mean losing control of an asset entirely, owing significant back taxes and penalties, or both.
What strikes me most about these two High Court cases is that the outcome had nothing to do with intent to save on ABSD — plenty of legitimate trusts are set up partly for tax reasons. What decided each case was whether the paperwork and conduct matched a genuine, irrevocable gift, or whether it looked like the "owner" never really let go. The father in the second case lost his property precisely because he did the trust properly — with a lawyer, with irrevocable terms — and then tried to walk it back once his circumstances changed.
If you're considering any arrangement involving a relative's name on your property: get proper legal advice before signing anything, and go in assuming the structure you choose will be treated exactly as written — because that's what both of these cases confirm the courts will do. This article explains the mechanics reported in these cases; it isn't a substitute for advice from a property lawyer on your own situation, and I'd always recommend speaking to one before entering into any trust or nominee arrangement.
Weighing a property purchase that involves more than one name on the title?
WhatsApp Bryan → More guides →Source: The Straits Times, 6 September 2026, "The risk of buying properties in someone else's name" by Tan Ooi Boon. This article is for informational purposes only and does not constitute financial, legal or investment advice — consult a qualified property lawyer before entering into any trust or nominee ownership arrangement.
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