When Property Becomes a Problem: Estate Planning Pitfalls in Singapore Real Estate
- Ong Xiang Zheng
- Jul 28
- 6 min read
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"This property is one of the rarest in the market! My dream home is a reality now, not an imagination."
It’s always exciting to attend a housewarming party. Watching proud new homeowners settle into their abode evokes a deep sense of joy.
In Singapore, home ownership feels like a rite of passage. With government policies that tightly regulate the real estate market, property prices remain relatively stable, barriers to entry are low, and mortgage structures prevent over-leveraging. This unique landscape has made real estate a cornerstone of financial planning for Singaporeans.
But as attractive as property ownership may be, especially in a high-demand and racially harmonious society like ours, are there hidden challenges when it comes to passing on real estate to the next generation?
Today, we explore how property—if not properly planned for—can complicate succession, and potentially cause more harm than good.
🧾 How You Own Determines How You Pass It On
In estate planning, property is considered an immovable asset. Its distribution is governed by the laws of the country where it's located. For instance, a condo in Malaysia follows Malaysian laws, while one in Singapore abides by HDB and Singapore estate succession rules.
Remember when you sign the home purchase agreement, somewhere on it, it stated the ownership arrangement. But the overwhelming excitement and focus on obtaining the house key would probably make you forgot about the ownership arrangement. So what are they? 🏡 Types of Property Ownership in Singapore (And How They Affect Succession)
Joint Tenancy
This is the most common arrangement among married couples. Under the Right of Survivorship, when one owner dies, their share automatically transfers to the surviving owner—regardless of any Will or Trust instructions of the deceased owners
🔒 You cannot pass on your share in a Will under joint tenancy.
Tenancy-in-Common: In this setup, each co-owner holds a specific share of the property (e.g., 40/60). This structure is typical among siblings or investment partners. Each owner can will away their share, or if no planning is done, intestacy laws apply.
📌 This setup is popular among siblings or investment partners.
Occupier/Living Interest: An occupier or living interest does not own any part of the property. They are the identified people who have beneficial interests in the property. Usually, such arrangement comes in when there is only a sole breadwinner in the family nucleus as the other spouse does not benefit from the Central Provision Fund (CPF) contributions to service the mortgage. 🚫 Occupiers have no automatic legal claim unless specified in a Will or trust.
Understanding these ownership types is critical. You cannot bequeath property held under joint tenancy, and tenancy-in-common may result in multiple fractional owners. Occupiers may wrongly assume they are next in line.
⚠️ When Property Inheritance Turns Into Conflict
Let’s consider a common scenario:
A family home is left to three adult children—A, B, and C—in equal shares.
A wants to sell and use the proceeds for his upcoming marriage.
B wants to live in the home, being single and without housing.
C plans to emigrate and prefers to rent out the property for passive income.
Here’s the challenge: all co-owners must agree to sell, rent, or transfer the property—even if one owns just 10%.
💬 Questions to Consider:
1. Beneficiaries' Circumstances
Are the children minors or adults? Do they already own a home? Are they financially independent? As a beneficiary, a sudden inheritance might upset their plans, such as incurring property count under their name, stamp duties, or affecting their financial goals. If they are a minor, how to ensure that they have a roof over their head, without the risk of being evicted due to malicious intents?
🏘️ Not All Properties Are Created Equal
Is it an HDB flat, private condo, landed home, or shophouse? Is it freehold or leasehold? Prime or non-prime? A property that has lower demands may not have good resales value, buyer markets or good rental yield. Holding onto such property becomes a burden instead. Not all properties are created equal. Thus, the misconception of hedging net worth through property may backfire and do more harm.
⚖️ Fairness Is Relative: The Emotional Toll of Property Disputes
Not everything can be quantified, especially when fairness can be interpreted differently. When the outcome is not in favour of personal agenda, the beneficiaries may cry foul and that is when dispute erupted.
In theory, distributing property “equally” seems fair. In practice, it can lead to deep conflict.
Back to the earlier example:
A now owns a property share and has to pay ABSD on his own matrimonial home.
B refuses to sell because she needs a place to live.
C wants passive income but isn’t interested in co-owning or managing the home.
With such conflicting interests, unanimous consent is required for any sale, rental, or transfer—regardless of each person’s share.
🤝 What Are the Options?
Buy out the other shares – Since B need the house, she can buy over the shares of A and C. But at what price should she pay for the shares? Lowest possible value in the market or the highest possible value? How is she able to fork out large sum of monies to A and C?
Sell the property and divide proceeds – This outcome despite being the most straightforward, leave bitterness behind. Siblings may not keep in contact thereafter, or worse still, taking legal actions against each other.
Hold the property together – risking future disputes and legal entanglements. Because of unresolved dispute, ownership of the property are now co-own with each other. When there is a change in ownership in the future, the transfer of shares might incur stamp duties, which will be discuss later in the article.
Even close-knit families can face fractured relationships when large assets and money are involved.
Now, let's examine the core issues that often arise:
💰 Stamp Duty and Property Inheritance: What You Should Know
It is important for all homeowners in Singapore to note and understand the impact of Stamp Duty on property. Buyer Stamp Duty (BSD) and Additional Buyer Stamp Duty (ABSD) are probably more familiar to most when it comes to home purchase. Good news! Inherited property are not subjected to any stamp duties, but beneficiaries may be affected by it indirectly because of the number of property they own.
In the above example, if A inherited a share of the property, his property count will be 1. That would means when he wants to buy his own matrimonial home, it will be considered as second property, thus incurring ABSD.
Seller Stamp Duty (SSD) is payable when the residential property is sold within the Minimum Holding Period a.k.a MHP. This applies regardless the residential property is public or private. It is important to note that if the assigned beneficiaries inherit the property, they will need to fulfil MHP from the date of their inheritance to avoid incurring SSD. This is regardless of the number of years held by the previous owner before the inheritance came into effect.
Of course, if there is an unanimous agreement among all the beneficiaries to put the property on sale, they can choose to sell it before inheriting it, so that SSD will not come into play, granted that the deceased owner had fulfilled the MHP.
In rare occurrence, where the property was purchased and the MHP is not fulfilled before the owner's demise, the beneficiaries will still have to pay the SSD if they wish to sell the property. Even if the owner's Will states that the property to be sold off with the MHP unfulfilled, the Estate will be liable to pay the SSD.
In summary, stamp duties may creep through the cracks in a poorly planned succession. Although one may not need to pay stamp duties just by inheriting, stamp duties may come into play through sales or future purchases.
🔑 Conclusion: Property Can Be a Blessing—Or a Burden
Real estate is often one of the largest assets we own. It provides stability, appreciation, and security. But when poorly planned, property can become a source of dispute, tax liability, and emotional distress. Property is not just an asset. It comes with sentimental and emotional attachment. Buying our first matrimonial home, or a house that witnessed the growth of our children
Not all properties are created equal. Not all distributions are equal. And not all successors are ready.
Estate planning isn’t just about passing down wealth—it’s about preserving harmony, minimising disputes, and ensuring the next generation receives assets in a meaningful and manageable way.
There’s no one-size-fits-all solution. Every family is different, and every property comes with its own considerations.
🏠 Let’s Plan a Smooth Property Legacy Together
If you own property and care about the people you’ll leave it to—don’t leave it to chance. Let’s sit down for a discovery session and explore your options.