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Singapore Law Watch
28-04-2025
- Business
- Singapore Law Watch
PropNex faces 2 lawsuits from property buyers who were penalised over ‘99-to-1' deals
PropNex faces 2 lawsuits from property buyers who were penalised over '99-to-1' deals Source: Straits Times Article Date: 28 Apr 2025 Author: Selina Lum Iras had found the property transactions to be tax avoidance arrangements. Real estate agency PropNex Realty is being sued by private property buyers who were penalised by the taxman for using the so-called '99-to-1' arrangement to reduce the additional buyer's stamp duty (ABSD) on their purchases. The property agents and law firms involved in the transactions have also been sued. In one case, a couple have sued PropNex, property agent Amos Koh and law firm CK Tan Law Corporation. Mr Kevin Rahim, 28, and Ms Jessica Tjitra, 32, are claiming a sum of nearly $850,000 that they had to pay the Inland Revenue Authority of Singapore (Iras) over their purchase of a unit at Riviere condominium. In the other case, Mr Melvin Li, 43, has sued PropNex, property agent Ian Sng and law firm City Law. Mr Li is claiming a sum of nearly $1.2 million he had to pay Iras over his purchase of a 1 per cent stake in his father's condo unit at Piccadilly Grand and in his mother's condo unit at Pullman Residences. In both cases, the buyers contended that they had relied on the representations made by property agents about the legality of the 99-to-1 arrangement. PropNex denied that it should be held liable for the acts of the property agents. ABSD is an extra tax on property purchases that applies to Singaporeans who already own a home, and to permanent residents and foreigners. The 99-to-1 structure was often used as a tax avoidance arrangement by buyers to reduce the rightful ABSD payable. The arrangement typically involves a first-time buyer purchasing a property and, within a very short period of time, selling a 1 per cent share of the property to a person who owns another property. It was used by those who already own a home to reduce the ABSD they pay as co-owner of an additional property. The Straits Times reported in May 2024 that Iras was set to claw back about $60 million in ABSD and surcharges after it uncovered 166 cases of private property purchases that involved the use of the 99-to-1 or similar arrangements to dodge ABSD. Couple said they were told it was legal Mr Rahim and Ms Tjitra, who are from Indonesia, filed their lawsuit in the High Court in February 2025. The couple, who are now permanent residents, are represented by Mr Gavin Neo of WongPartnership. They said in their statement of claim that Mr Koh had told them the 99-to-1 method was a legal and workable structure to reduce the ABSD payable. In July 2022, Ms Tjitra bought the condo unit in her sole name for $3.3 million, shortly after she obtained permanent residency. The ABSD rate for PRs buying their first property was 5 per cent, compared with 30 per cent for foreigners. The following month, she sold a 1 per cent share of the flat to Mr Rahim, who paid the 30 per cent rate on only this share. In August 2024, Iras notified the couple that the arrangement amounted to illegal stamp duty avoidance. Iras imposed a 30 per cent ABSD rate on the entire purchase price, as well as a 5 per cent surcharge. In his defence filed in court, Mr Koh admitted making the alleged representations. He said he learnt of this method from presentation slides prepared by CK Tan Law, and he believed it was a legitimate way to save on stamp duty. PropNex contended in its defence that Mr Koh was an independent contractor, and not its employee. It said he undertook that he would be personally liable for any unauthorised acts, wrongdoing, misrepresentations or fraud committed in the course of his work. The agency added that Mr Koh did not act for the couple; his commissions were paid solely by the developer of Riviere for introducing buyers and brokering sales. The law firm argued that the possibility that Iras could exercise its powers under the law to vary such an arrangement and impose a surcharge did not make it an illegal arrangement. The case is scheduled for an administrative hearing on April 30. Man said he was assured by property agent Mr Li's lawsuit was filed in January 2025. He is represented by Mr Quek Mong Hua of Lee and Lee. Mr Sng was the property agent who handled the sale of Mr Li's parents' house and the subsequent purchase of a semi-detached house in the names of Mr Li's brother and sister-in-law. Mr Li said his parents, who lived with his brother, wanted properties of their own, but were not eligible for a bank loan. According to Mr Li, his parents were advised by Mr Sng to each buy a unit at the Piccadilly Grand and Pullman Residences. Mr Sng suggested that Mr Li then buy 1 per cent of both properties, which would enable him to take out a loan in his name. Mr Li asked Mr Sng over WhatsApp if the transactions were legal, and the agent assured him that he did only 'legal stuff' because his livelihood was at stake. Mr Li said Mr Sng also told him that the transactions were proposed by his manager and teammates from PropNex, and that they never had any issues. To further assure him, Mr Sng recommended City Law to act for him and his parents. Mr Li later sought clarification from Iras after he became aware that it was investigating similar deals. Iras said his transactions contravened the law, and he was found liable to pay the full ABSD on both properties – at a 17 per cent rate for one, and 25 per cent for the other – as well as surcharges. A joint defence filed by PropNex and Mr Sng noted that he acted as the marketing salesperson for the developers of both Piccadilly Grand and Pullman Residences. The defence stated that Mr Sng told Mr Li he had learnt about a method commonly referred to as the '100-sell-1' method – another name for the 99-to-1 arrangement – from training sessions conducted by law firms and bankers. After checking with law firms including City Law on whether the method could be used for this situation, Mr Sng passed the information to Mr Li. Mr Sng denied making false representations. City Law asserted in its defence that it did not advise or affirm that the transactions were legal. The firm added that by the time it dealt with Mr Li, he and his parents had already committed to the purchases using the 99-to-1 arrangement. The case is understood to be headed for mediation. Selina Lum is senior law correspondent at The Straits Times. Source: The Straits Times © SPH Media Limited. Permission required for reproduction. Print
Straits Times
27-04-2025
- Business
- Straits Times
PropNex faces 2 lawsuits from property buyers who were penalised over ‘99-to-1' deals
Iras had found the property transactions to be tax avoidance arrangements. PHOTO: ST FILE PropNex faces 2 lawsuits from property buyers who were penalised over '99-to-1' deals SINGAPORE – Real estate agency PropNex Realty is being sued by private property buyers who were penalised by the taxman for using the so-called '99-to-1' arrangement to reduce the additional buyer's stamp duty (ABSD) on their purchases. The property agents and law firms involved in the transactions have also been sued. In one case, a couple have sued PropNex, property agent Amos Koh and law firm CK Tan Law Corporation. Mr Kevin Rahim, 28, and Ms Jessica Tjitra, 32, are claiming a sum of nearly $850,000 that they had to pay the Inland Revenue Authority of Singapore (Iras) over their purchase of a unit at Riviere condominium. In the other case, Mr Melvin Li, 43, has sued PropNex, property agent Ian Sng and law firm City Law. Mr Li is claiming a sum of nearly $1.2 million he had to pay Iras over his purchase of a 1 per cent stake in his father's condo unit at Piccadilly Grand and in his mother's condo unit at Pullman Residences. In both cases, the buyers contended that they had relied on the representations made by property agents about the legality of the 99-to-1 arrangement. PropNex denied that it should be held liable for the acts of the property agents. ABSD is an extra tax on property purchases that applies to Singaporeans who already own a home, and to permanent residents and foreigners. The 99-to-1 structure was often used as a tax avoidance arrangement by buyers to reduce the rightful ABSD payable. The arrangement typically involves a first-time buyer purchasing a property and, within a very short period of time, selling a 1 per cent share of the property to a person who owns another property. It was used by those who already own a home to reduce the ABSD they pay as co-owner of an additional property. The Straits Times reported in May 2024 that Iras was set to claw back about $60 million in ABSD and surcharges after it uncovered 166 cases of private property purchases that involved the use of the 99-to-1 or similar arrangements to dodge ABSD. Couple said they were told it was legal Mr Rahim and Ms Tjitra, who are from Indonesia, filed their lawsuit in the High Court in February 2025. The couple, who are now permanent residents, are represented by Mr Gavin Neo of WongPartnership. They said in their statement of claim that Mr Koh had told them the 99-to-1 method was a legal and workable structure to reduce the ABSD payable. In July 2022, Ms Tjitra bought the condo unit in her sole name for $3.3 million, shortly after she obtained permanent residency. The ABSD rate for PRs buying their first property was 5 per cent, compared with 30 per cent for foreigners. The following month, she sold a 1 per cent share of the flat to Mr Rahim, who paid the 30 per cent rate on only this share. In August 2024, Iras notified the couple that the arrangement amounted to illegal stamp duty avoidance. Iras imposed a 30 per cent ABSD rate on the entire purchase price, as well as a 5 per cent surcharge. In his defence filed in court, Mr Koh admitted making the alleged representations. He said he learnt of this method from presentation slides prepared by CK Tan Law, and he believed it was a legitimate way to save on stamp duty. PropNex contended in its defence that Mr Koh was an independent contractor, and not its employee. It said he undertook that he would be personally liable for any unauthorised acts, wrongdoing, misrepresentations or fraud committed in the course of his work. The agency added that Mr Koh did not act for the couple; his commissions were paid solely by the developer of Riviere for introducing buyers and brokering sales. The law firm argued that the possibility that Iras could exercise its powers under the law to vary such an arrangement and impose a surcharge did not make it an illegal arrangement. The case is scheduled for an administrative hearing on April 30. Man said he was assured by property agent Mr Li's lawsuit was filed in January 2025. He is represented by Mr Quek Mong Hua of Lee and Lee. Mr Sng was the property agent who handled the sale of Mr Li's parents' house and the subsequent purchase of a semi-detached house in the names of Mr Li's brother and sister-in-law. Mr Li said his parents, who lived with his brother, wanted properties of their own, but were not eligible for a bank loan. According to Mr Li, his parents were advised by Mr Sng to each buy a unit at the Piccadilly Grand and Pullman Residences. Mr Sng suggested that Mr Li then buy 1 per cent of both properties, which would enable him to take out a loan in his name. Mr Li asked Mr Sng over WhatsApp if the transactions were legal, and the agent assured him that he did only 'legal stuff' because his livelihood was at stake. Mr Li said Mr Sng also told him that the transactions were proposed by his manager and teammates from PropNex, and that they never had any issues. To further assure him, Mr Sng recommended City Law to act for him and his parents. Mr Li later sought clarification from Iras after he became aware that it was investigating similar deals. Iras said his transactions contravened the law, and he was found liable to pay the full ABSD on both properties – at a 17 per cent rate for one, and 25 per cent for the other – as well as surcharges. A joint defence filed by PropNex and Mr Sng noted that he acted as the marketing salesperson for the developers of both Piccadilly Grand and Pullman Residences. The defence stated that Mr Sng told Mr Li he had learnt about a method commonly referred to as the '100-sell-1' method – another name for the 99-to-1 arrangement – from training sessions conducted by law firms and bankers. After checking with law firms including City Law on whether the method could be used for this situation, Mr Sng passed the information to Mr Li. Mr Sng denied making false representations. City Law asserted in its defence that it did not advise or affirm that the transactions were legal. The firm added that by the time it dealt with Mr Li, he and his parents had already committed to the purchases using the 99-to-1 arrangement. The case is understood to be headed for mediation. Selina Lum is senior law correspondent at The Straits Times. Join ST's WhatsApp Channel and get the latest news and must-reads.
Straits Times
25-04-2025
- Business
- Straits Times
Iras Board to welcome new chairman on May 1
Mr Lai Chung Han (left) will take over from Mrs Tan Ching Yee (right) from May 1. PHOTO: PUBLIC SERVICE DIVISION Iras Board to welcome new chairman on May 1 SINGAPORE - The Board of Inland Revenue Authority of Singapore (Iras Board) will welcome Mr Lai Chung Han as its new chairman on May 1 . Appointed by the Minister for Finance , Mr Lai, 52 , will take over from Mrs Tan Ching Yee , according to a media statement from the Ministry. Mr Lai, who is also the incoming permanent secretary (finance) , was previously appointed as the p ermanent secretary (development), Ministry of Finance in July 2024. In 2022 , he was awarded the Public Administration Medal ( G old) by the President of Singapore. Mr Lai has also held various command staff appointments throughout his military career, serving as d eputy secretary (policy), Ministry of Defence from 2012 , and as c hief of Navy from 2014. He was appointed second permanent secretary (education) and second permanent secretary (home affairs) in 2017 , and later served as permanent secretary (education) from 2019. Serving as the board's chairman since May 1, 2016 , Mrs Tan, who is 60 , has led Iras in strengthening its international standing to better serve the R epublic. Iras represented Singapore on the Organisation for Economic Cooperation and Development (OECD) Forum on Tax Administration as a b ureau member. Iras has also administered national grants schemes such as the Uplifting Employment Credit, the Progressive Wage Credit Scheme, and the Rental Support Scheme, to support businesses and workers alike. With Mrs Tan helming the board, Iras upgraded its digital infrastructure to serve taxpayers better and enhance compliance efforts. This include d successful generational upgrade in the information technology system for property tax, stamp duties and individual income tax, among other improvements. 'The Ministry of Finance and the Inland Revenue Authority of Singapore welcome Mr Lai to the board and would like to express our deep appreciation to outgoing chairman, Mrs Tan Ching Yee, for her significant contributions to the Iras Board,' the statement read. Join ST's WhatsApp Channel and get the latest news and must-reads.
Business Times
25-04-2025
- Business
- Business Times
Minister for Finance appoints new Iras board chairman Lai Chung Han
[SINGAPORE] Lai Chung Han, 52, incoming permanent secretary for finance, has been appointed chairman of the board of the Inland Revenue Authority of Singapore (Iras), effective May 1. He succeeds Tan Ching Yee, 60, who has served as chairman since 2016, the Ministry of Finance said in a statement on Friday (Apr 25). Lai has held several leadership roles in the Singapore Armed Forces and the Ministry of Defence. He became deputy secretary (policy) at the Ministry of Defence in 2012 and Chief of Navy in 2014. In 2017, he was appointed second permanent secretary for both education and home affairs. He was appointed as permanent secretary (education) in 2019 and, in 2024, took on the role of permanent secretary (development) at the Ministry of Finance. In 2022, he received the Public Administration Medal (Gold) from the president. Under Tan's leadership, Iras participated in major international platforms and represented Singapore as a bureau member on the Organisation for Economic Cooperation and Development Forum on Tax Administration. It grew beyond its traditional role to become the centre of excellence for national grant disbursement, rolling out schemes such as the Rental Support Scheme, Jobs Support Scheme and Wage Credit Scheme, to support businesses and workers. The company also upgraded its digital systems and used artificial intelligence to improve services for taxpayers. 'The Ministry of Finance and the Inland Revenue Authority of Singapore welcome Mr Lai to the Board and would like to express our deep appreciation to outgoing chairman, Mrs Tan Ching Yee, for her significant contributions to the Iras board,' the statement noted.
Business Times
25-04-2025
- Business
- Business Times
Minister for Finance appoints new Iras chairman Lai Chung Han
[SINGAPORE] Lai Chung Han, 52, incoming permanent secretary for finance, has been appointed chairman of the board of the Inland Revenue Authority of Singapore (Iras), effective May 1. He succeeds Tan Ching Yee, 60, who has served as chairman since 2016, the Ministry of Finance said in a statement on Friday (Apr 25). Lai has held several leadership roles in the Singapore Armed Forces and the Ministry of Defence. He became deputy secretary (policy) at the Ministry of Defence in 2012 and Chief of Navy in 2014. In 2017, he was appointed second permanent secretary for both education and home affairs. He was appointed as permanent secretary (education) in 2019 and, in 2024, took on the role of permanent secretary (development) at the Ministry of Finance. In 2022, he received the Public Administration Medal (Gold) from the president. Under Tan's leadership, Iras participated in major international platforms and represented Singapore as a bureau member on the Organisation for Economic Cooperation and Development Forum on Tax Administration. It grew beyond its traditional role to become the centre of excellence for national grant disbursement, rolling out schemes such as the Rental Support Scheme, Jobs Support Scheme and Wage Credit Scheme, to support businesses and workers. The company also upgraded its digital systems and used artificial intelligence to improve services for taxpayers. 'The Ministry of Finance and the Inland Revenue Authority of Singapore welcome Mr Lai to the Board and would like to express our deep appreciation to outgoing chairman, Mrs Tan Ching Yee, for her significant contributions to the Iras board,' the statement noted.
