Couple caught in 99-1 property transaction sue salesperson, PropNex and law firm for S$586,172

A PropNex : OYY 0% subsidiary has been sued, along with its salesperson and a law firm, over a so-called “99-1” property transaction, by a couple who allege a breach of duty by the three parties.

The couple are claiming a sum of S$586,172, the amount in additional tax and surcharge that the taxman had asked them to pay, for having avoided paying the relevant stamp duty for their purchase of a condo unit.

Neo Say Chuan, 47, and his wife Tiong Bock Lian, 43, are represented by WongPartnership’s Gavin Neo. They have named PropNex Realty, salesperson Don Tay and Anthony Law Corporation as defendants in the lawsuit.

The claimants identified Tay as an agent of PropNex Realty, but the agency, in its defence, has denied he is one. It instead described him as an “independent contractor”.

The Neos claim that Tay told them that 99-1 deals were legitimate and legal, and that Anthony Law Corporation, which handled the transaction, failed to inform them that the arrangement was unlawful or could be viewed as an illegal act of avoiding stamp duty.

In their statement of claim filed in early November, the pair alleged that Tay presented them a two-step 99-1 arrangement when he learned that Tiong, the wife, would not qualify for a loan to buy a four-room unit in The Gazania based on her salary alone. She had refused to buy a lower-priced three-room apartment in the development, which is located near Bartley MRT station.

She was already an owner of an apartment in another condo development, and her husband was an owner of a Housing & Development Board flat.

Singapore citizens buying their second residential property at that time were required to pay an additional buyer’s stamp duty (ABSD) of 17 per cent.

Tay allegedly suggested to them that Tiong first sell her other apartment to avoid paying that level of ABSD. She was then to buy The Gazania unit in her sole name, and then sell 1 per cent of the property to Neo, her husband, so that they would be able to use their joint salaries to qualify for a higher loan amount.

Under this arrangement, Neo would pay the 17 per cent ABSD on only 1 per cent of the purchase price, since it was his second residential property.

If the unit had been bought in the couple’s names from the start, he would have had to pay the 17 per cent ABSD on the full price of the unit.

The claimants alleged that Tay told them that the two-step 99-1 arrangement was a legal and legitimate way to reduce the ABSD payable. Persuaded by his representations, Tiong bought the S$2.8 million unit on Apr 14, 2022, and then sold a 1 per cent stake to her husband four days later.

The claimants also alleged that they had sought clarifications and confirmation from Anthony Law Corporation regarding the legality of the arrangement, and that lawyers from the firm made the same representations as Tay.

A year after they bought the unit, the couple read about the taxman probing this method of tax avoidance. They checked with Tay, who allegedly reassured them that it was legal for cases where qualifying for a loan was an issue for married couples.

After this, the claimants decided against voluntarily disclosing their transaction to the Inland Revenue Authority of Singapore (Iras), the statement of claim said.

In August 2025 – more than three years after their purchase – a notice from the taxman came, informing the couple that their property transaction was a case of the illegal avoidance of stamp duty.

They owed the taxman S$586,172. The sum comprised S$477,360, the 17 per cent ABSD liability on the full price of the property, and a 25 per cent surcharge of S$117,234. (The surcharge would have been twice that, but the couple appealed successfully for it to be halved.)

The claimants said Tay owed them a duty of care to tell them the truth, and that PropNex owed them a duty to ensure that Tay was well-versed in the law as an agent, and would not make false representations. The agency is liable for Tay’s misrepresentations as well, the claimants argued.

Further to this, the couple argued that the law firm also had a duty to ensure that the structure of the transaction was not an illegal avoidance of stamp duty, and to advise them that the two-step 99-1 arrangement could be construed as such.

Defence

PropNex Realty, in its defence on Tuesday (Nov 25), denies breaching a duty of care, even if it owed the Neos one. The agency contended that it is not liable to the claimants, and that the Neos are not entitled to any of the reliefs claimed against it.

It described Tay as an independent contractor and its salesperson, but not its servant, agent or employee, and that it had prohibited him from making representations or encouraging the claimants to go into arrangements to avoid stamp duty.

PropNex Realty further argued that Tay and its other salespersons were provided with updated information on transaction structures, and trained on developments in the property market, including the applicable ABSD rules and guidelines.

Tay has agreed to abide by the law and regulations stipulated by the Council of Estate Agents, PropNex Realty added.

Meanwhile, Tay and Anthony Law Corporation have said they would contest the claims against them, and their defences are pending.

Rajah & Tann Singapore is acting for PropNex Realty, Allen & Gledhill for Anthony Law Corporation, and Withers KhattarWong, for Tay. A case conference will take place on Dec 23.

This case is PropNex Realty’s third reported lawsuit involving 99-1 transactions.

The first reported case, in which the agency is being sued for about S$1.2 million, is pending.

PropNex Realty’s parent announced earlier that the second reported lawsuit, involving a claim of about S$850,000, has been withdrawn, for reasons that have not been made public,

Source: The Business Times © SPH Media Limited. Permission required for reproduction.

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