At a recent Precepts Academy (PAC) event, Estate Planning as the Cornerstone of Financial Planning 2025, Darren Tan (DT), a Senior Estate and Succession Practitioner with Precepts, hosted a discussion on real estate succession challenges in Singapore.
He was joined by AEPP® Advanced Module Trainer Ku Swee Yong (KSY) and PAC Associate Director Eliss Chen (EC).
Ku Swee Yong, an expert in Singapore real estate and CEO of International Property Advisor Pte Ltd, frequently shares his insights in the media and on his YouTube channel.
Current Real Estate Succession Challenges
DT: What are the key challenges in real estate succession for property owners in Singapore?
KSY: There are two primary regulatory frameworks affecting real estate succession in Singapore.
1. HDB Ownership Rules
HDB ownership rules apply to Singaporeans and Permanent Residents, restricting eligibility and ownership transfer. HDB flat owners often worry whether their beneficiaries can inherit the HDB flat after their demise.
A major concern is ensuring their surviving spouse, children, or parents retain a roof over their heads. One key rule is that an individual cannot own more than one HDB flat.
For example, if a couple passes away and leaves their HDB flat to their two children, complications can arise—such as one child being ineligible to co-own the flat because they already own an HDB, while the other, still in university, cannot afford to take over the property on their own. The inherited flat may need to be sold, potentially leaving the younger child without housing options.
DT: What other challenges do HDB owners face?
KSY: Unlike private properties, HDB flats cannot generally be placed in a trust. While this policy ensures public housing remains transparent and accessible, it also limits an owner’s ability to protect vulnerable beneficiaries.
If beneficiaries are financially irresponsible or easily influenced, they may sell the inherited flat and mismanage the sales proceeds. Private property owners, on the other hand, can place their properties in trust to prevent premature sales.
2. Landed Property Ownership Restrictions
KSY: For landed properties, a common issue arises when beneficiaries are no longer
Singaporean citizens. Under Singapore’s laws, foreigners generally cannot own landed properties, so if a child marries a foreigner and acquires foreign citizenship, the child will not be eligible to continue to own the landed property. They will be forced to sell the inherited property. While rare, this situation does occur.
Misconceptions About Real Estate Succession
DT: What are some common misconceptions about real estate succession?
EC: A common misconception that people believe in is when a beneficiary cannot
legally own a property, they are ineligible to benefit from it. In reality, though the
beneficiary cannot legally own the property, they can inherit from the proceeds of the property sale and need not be excluded from the inheritance.
KSY: Another common misconception involves Additional Buyer’s Stamp Duty (ABSD). Many assume that beneficiaries must pay ABSD when inheriting a property if they own another property currently. However, ABSD applies only to property purchases, not inheritances.
The Impact of ABSD on Estate Planning
DT: Does ABSD still influence estate planning?
KSY: Absolutely. One key concern is that inheriting a partial share of a property may
incur ABSD liability when a beneficiary later purchases a home.
For example, if a young man inherits a share of his father’s property, then later buys a marital home, his purchase is considered a second property—triggering ABSD. Many beneficiaries worry about this added financial burden.
The Role of Financial Advisors in Real Estate Succession
DT: Can financial advisors add value to clients navigating these issues?
KSY: Real estate is illiquid and often indivisible, creating challenges for succession planning. Financial advisors, who typically manage liquid assets, can help clients establish liquidity pools to cover tax obligations and facilitate equitable distributions. This reduces conflicts and the need to sell inherited properties.
EC: I agree. Insurance is a powerful tool in estate planning, providing liquidity to maintain inherited properties. Rising property taxes may put strain on beneficiaries, making liquid assets essential for sustaining real estate holdings.
The Role of Trusts in Real Estate Succession
DT: Given the current ABSD regime—where trust held properties can incur up to 65% ABSD—are trusts still viable for estate planning?
EC: ABSD policies may change over time, though there’s no indication of imminent abolishment. When planning for intergenerational wealth transfer, estate planners must consider the long term viability of trusts.
KSY: Singapore’s real estate landscape is dynamic, with properties often being redeveloped or en bloc sales occurring. Estate planners must anticipate such events and structure plans accordingly. Most Singaporean families value real estate as a key asset, making it crucial for wealth managers to integrate real estate strategies into their estate planning services.
Financial advisors should deepen their expertise in real estate succession to offer holistic solutions beyond simple property transactions.
Where to Learn More
DT: Where can financial advisors and wealth managers acquire deeper knowledge to assist clients?
EC: Our AEPP® Advanced Module: Wealth Transfer of Real Estate for Financial Services Professionals, led by Swee Yong, is an excellent resource. It covers in-depth estate planning concepts and real-world case studies.
This article was first published in our newsletter, The Custodian Issue 33. Click here to access our latest newsletter
