Eligibility to Buy Private Property
In the year 1973, the Singapore Government has imposed
restrictions on foreign ownership of all private residential property in
Singapore. Such ownership is governed by the Residential Property Act.
The Act aims to give Singaporeans a stake in the country by
being able to buy and possess their own residential property at an affordable
price and also encourage foreign talent by allowing permanent residents and
foreign companies who make an economic contribution to Singapore to purchase
such properties for their own occupation.
The Residential Property Act (RPA) is then amended on 19
July 2005 to allow foreigners to purchase apartments in non-condominium developments of
less than 6 levels without the need to obtain prior approval.
For restricted property such as vacant land, landed
properties such as bungalows, semi-detached and terrace houses, prior approval
is still needed if foreigners wish to buy. Landed properties is a special class
of residential property that Singaporeans aspire to own, and should remain
restricted. Foreigners need to apply for approval from Singapore Land Authority
before buying.
If you are a foreigner (or expatriate) and you wish to
purchase a restricted residential property, you need to download the application
form at
http://www.sla.gov.sg/htm/ser/ser0307.htm#d You can
submit the form together with the relevant supporting documents such as your
entry and re-entry permits and qualifications to:
Land Dealings (Approval) Unit
No. 8 Shenton Way,
#27-02 Temasek Tower,
Singapore 068811
What are the non-restricted residential properties?
Foreigners are not restricted from acquiring:
-
Developments approved as a condominium development under
the Planning Act
-
A flat in a building of 6 levels or more including the
ground level and any level below the ground level including HUDC Phase I,
Phase II flats and privatised HUDC Phase III and IV flats
-
A leasehold estate in restricted residential property
(refer to A) for a term not exceeding 7 years including any further term
which may be granted by way of an option for renewal
What are the restricted residential properties?
Foreign persons (including natural persons, foreign companies
and societies) are restricted from purchasing:
-
Vacant land
-
Landed residential property, such as bungalows, terrace
houses, semi-detached houses
-
Residential property in a building of less than 6 levels
Other restricted properties
-
A HDB Shophouse
-
A HDB flat purchased directly from HDB
-
A resale HDB flat where HDB has consented to the sale
-
Executive Condominium bought under the Executive
Condominium Housing Scheme Act, 1996
Eligibility to Buy HDB Property and Executive Condominiums
HDB Flats are apartments built and maintained by the Housing
Development Board (HDB). More than 80% of Singaporeans live in HDB housing
estates. HDB housing estates are usually self-contained towns with clinics,
schools, supermarkets, food centres, as well as sports and recreational
facilities. For the classification of HDB flats, the living room is counted as
one room.
To buy a flat directly from HDB, you must be a Singapore citizen, must include another Singapore citizen or Singapore permanent resident to form a family nucleus. To buy a flat from the resale market, you must be a Singapore citizen or Singapore permanent resident. Include at least one listed occupier who is a Singapore permanent resident or Singapore citizen. Please visit the
HDB website for more details.
Executive Condominiums (EC) were introduced to cater to
Singaporeans, especially young graduates and professionals who can afford more
than an HDB flat but find private property out of their reach. ECs are
comparable in design and facilities to private condominiums as they are
developed and sold by private developers.
The first owner of a Executive Condominium are not allowed to
re-sell their unit in the secondary market within the first 5 years. After the
initial 5 years, owners are allowed to sell their units to Singaporeans.
Foreigners can be only buy a Executive Condominium after 10 years, in which all
restrictions will be lifted.
For HDB flats, HDB shophouse and Executive Condominiums, eligibility is subjected to the Housing And Development Board.
Interested purchasers can approach HDB directly to enquire on their eligibility
to purchase a HDB unit or Executive Condominium unit.
For more information/queries, please contact:
Housing and Development Board
HDB HUB
480 Lorong 6 Toa Payoh,
Singapore 310460
Tel : (65) 6490 1111
Tel : (65) 6397 2477
Email: hdbmailbox@hdb.gov.sg
Property Investments for
Permanent Resident Application
Under the Global Investor Programme (GIP) administered by the
Economic Development Board (EDB), foreigners can be considered for Permanent
Resident (PR) status if they invest a certain minimum sum in business set-ups
and/or other investment vehicles such as venture capital funds, foundations or
trusts that focus on economic development.
Private residential properties investment will be considered
for application for Permanent Resident application. A foreigner can be
considered for PR status if he invests at least S$2 million in business set-ups,
other investment vehicles such as venture capital funds, foundations or trusts,
and/or private residential properties. Up to 50% of the investment can be in
private residential properties, subject to foreign ownership restrictions under
the Residential Property Act (RPA). This is to attract and anchor foreign talent
in Singapore.
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 Property Search |
Engage a Realtor
A professional property agent in Singapore will assist you and protect your interest throughout the purchase, secure the offer for you at the best possible price. With a much better knowledge of Singapore, the agent will be in a better position to recommend and advice on the choice of property. He will also ensure that all documents are in order and you are dealing with the rightful owner of the property.
Use Only 1 Agent
Most property companies share the same database of property listings in Singapore. Therefore use only ONE agent at a time. If you approach many agents at the same time, very likely that they will show you the same property. Much confusion and embarrassment will arise if you engage many agents. Using 1 agent, you will save valuable time for yourself and the agent. He will then understand your needs and requirements better after a few viewings. Only if they are incompetence, unresponsive or not showing the correct property you wanted, then start to look for another agent.
Singapore Expats Team has seen thousands of properties in
Singapore throughout the years. Therefore, you can trust on us to provide
tenants or buyers the correct recommendations. We have the largest property
database in Singapore, it would be totally unnecessary for tenants and buyers to
go through other realtors except us to avoid repetitive viewings of the same
property.
Our
Singapore Online Property Classifieds consist of a vast selection of apartments, houses, flats and commercial properties in Singapore.
If it is for sale, you will find it here. Do send us a
mail or call us at +65 61000 300 if you would like
to engage SingaporeExpats.com to do the search and recommendation for you. Read
more about SingaporeExpats.com at
About Us and
Our Testimonials.
It isn't difficult to understand why thousands of clients every month selected
us as their sole agent. After all, we are the Number 1 Property Portal in Singapore.
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Location, Budget,
Rental Yield |
Location
Depending whether you are buying the property for own stay or
investment, location plays an important role. Properties in prime districts
retain their value very well and they usually have the highest capital gain in a
bullish property market. Properties in the suburbs are lower in price and may be
more suitable for own stay than investment. If you can purchasing the property
for investment, the properties in prime districts like district 09, 10, 11 or
the Central Business District are the safest buy. Properties with sea view at
the East Coast are also great for a resort home or investment.
Budget
How much cash upfront you willing to pay for the property? How much CPF in your ordinary account that you can use for the purchase? The latest MAS ruling allows purchaser to loan up to 80% of the valuation or purchase price, whichever is lower. 10% must be paid in cash and the other 10% can be paid using CPF or cash.
Rental Yield
If you are buying the property for investment and intend to
rent out the property, calculate the yearly rental yield versus the purchase
price. Properties at district 09, 10 and 11 easily yield the highest rental
returns. Due to the premium in price for freehold properties, they most likely
have lower rental yields than leasehold properties.
If you are a non-residential foreigner (no valid employment
permit or pass for long stay) purchasing a property for rental returns, do not
forget to factor the personal income tax, which is moderately high at 20%. For
foreigners who are working in Singapore with valid employment status, the tax
rate will be much lower. Visit the
IRAS website for more info
on taxes.
Valuation
& Loan
Check the indicative valuation for the property you intending to buy. Valuation directly affects the amount of loan you can get for the property. Take into account the number of years that you can loan, the monthly instalments,
etc.
You need to check whether your credit status and income proof
can enable you to loan (with effect from 19 July 2005) 90% of the of the valuation or sale price
(whichever is lower). For a foreigner, major banks or financial institutions in
Singapore can only loan up to 70% or 80% of the valuation or sale price
(whichever is lower).
If you are looking for competitive housing loan and
indicative valuation, we have contacts with major banks and can help you get a
good financial package. We can help you check for indicative valuation, apply for a
housing loan or get an Approval-In-Principle before the purchase.
Contact us for more
details.
For HDB flats, you may want to check the eligibility to get a
concession loan from HDB. If you are not entitled to get the loan from HDB, the
other way is to get it financed by a commercial bank.
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Documentation for Private Property |
Option to Purchase
You have decided to purchase a property. Prepare 1% of the purchase price
(as a consideration) in exchange for the Option to Purchase from the seller. Option to Purchase is usually prepared by the seller's (vendor) solicitor or property agent. You are usually given 14 days to decide whether to proceed with the purchase. If you decide to proceed, exercise the option by signing
in your solicitor's office and forward it to the seller's solicitor together with another
4% or 9% (agreement between the vendor and purchaser) of the purchase price.
Offer to Purchase
Alternatively, you can ask your realtor to prepare the Offer
to Purchase and attention to the seller. Clearly stating the price, sales
completion date and others. Terms and conditions can be drafted by your
solicitor or your realtor.
Completion of Sale
From then on, leave it to your solicitor for the completion
of the sale, which will be completed in around 8 to 10 weeks time (agreement
between the vendor and purchaser).
Your solicitor will lodge a caveat on the property, coordinate with the
financial institution, CPF board (if applicable), prepare the
mortgagor/mortgagee documents.
Stamp fee will be payable to Inland Revenue Authority of
Singapore within 14 days upon exercising the Option to Purchase or signing the
Sales and Purchase Agreement when you buy from a property developer. For
properties above S$300,000, stamp fee payable will be 3% of the purchase price
minus S$5,400.
For HDB flats, there is also an option period of 14 days for the buyer to
consider over the intended purchase, to check his eligibility, financing aspects and other issues such as whether the flat is affected by redevelopment/upgrading, the liability to pay upgrading cost/levy etc. If the buyer does not wish to buy the resale flat, he can let the Option expire and loses only the option fee. To ensure a standardised practice, HDB has the following guidelines for the Option Fee, Deposit and Option Period:
Option Fee - An amount not exceeding $1,000
Deposit - An amount not exceeding $5,000 (including the Option Fee)
Option Period - 14 calendar days
Please visit the
HDB website for more details.
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Inspection Before Taking Over Property |
The buyer can request and state clearly in the Option to
Purchase for permission to inspect the property before the completion of the sale. Check the fixtures and fittings, and also the items that the seller had agreed to sell with the property.
For HDB flats, HDB will do the inspection on your behalf. They will check for any unauthorised renovation. Seller will need to reinstate the flat into the condition allowed before HDB approve the sale.
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Commission Payable |
For private property, agency commission is paid solely by the seller, which varies from
1% to 2% of the selling price. For HDB, seller will pay around 1% to 2% of the selling price, whereas the buyer will usually pay 1%.
Buyer and seller should ensure that an invoice from a
licenced real estate agency is issued to them. Upon payment, do not pay cash
directly to the realtor, instead, issue a cross-cheque payable to the realtor's
agency according to the invoice.
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