Purchasing property in Singapore via a trust structure has become an increasingly discussed strategy, particularly among affluent individuals planning for long-term wealth preservation. While it offers certain advantages—especially for legacy planning—it also comes with financial and regulatory implications that buyers should carefully evaluate. Let’s explore the key pros and cons of using a trust to buy a condo in Singapore.
What Is a Trust Purchase?
A trust purchase involves buying a property under a trust arrangement, typically for the benefit of a child or family member. This is common among high-net-worth individuals who want to secure assets for their children, often under the age of 21. Properties such as The Continuum Condo, a freehold project in the popular District 15, are often targeted by such buyers due to their long-term investment value and family-friendly appeal.
When buying through a trust, legal ownership belongs to the trustee (usually a parent), while the beneficial ownership lies with the child. This arrangement is governed by the Trustees Act and must be structured with legal and tax advisors to comply with local regulations.
Pros of Buying a Condo via a Trust
One of the most significant benefits of a trust purchase is wealth preservation and legacy planning. By securing a condo such as W Residences Marina View, located in the prime District 1 Marina Bay area, families can lock in premium real estate for future generations. This ensures that the property remains within the family, bypassing potential challenges with will disputes or inheritance distribution.
Another advantage is avoiding Additional Buyer’s Stamp Duty (ABSD) in some cases. If the beneficiary has no other property, the trust purchase might be structured to avoid higher ABSD rates that would otherwise apply to the trustee owning multiple properties—though the Inland Revenue Authority of Singapore (IRAS) has tightened rules around this.
Cons and Financial Commitments
However, there are also critical downsides to consider. For one, 100% payment in cash is required upfront—no bank financing is allowed when a property is purchased under a trust. This makes it a viable option only for those with substantial liquid assets. Additionally, the full ABSD (currently 65% for trusts without an irrevocable clause) must be paid upfront and only refunded if stringent criteria are met.
Another con is limited flexibility. Once the trust is set up and the condo is purchased—be it The Continuum Condo or W Residences Marina View—the property cannot be easily sold or transferred without legal hurdles. This could reduce investment liquidity and complicate future asset reallocation.
Should You Consider a Trust Purchase?
Ultimately, the decision to use a trust to purchase a condo in Singapore depends on your financial goals and family planning needs. If your objective is long-term asset protection and intergenerational transfer, a trust can be a powerful tool—especially when acquiring high-value assets in prime locations like W Residences Marina View.
However, if your aim is short- to mid-term capital growth or rental income, it may be more strategic to purchase the property directly. Projects like The Continuum Condo offer attractive investment potential without the complexities and upfront capital outlay that a trust requires.
