ELIGIBILITY TO BUY
THE SAIL 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 he 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
HDB AND EXECUTIVE CONDOMINIUM
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: email@example.com
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.
Use Only 1 Agent
Location, Budget, Stamp Duty, Rental Yield
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.
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. 5% must be paid in cash and the other 15% can be paid using CPF or cash.
STAMP DUTY AND ADDITIONAL STAMP DUTY
Buyer’s Stamp Duty (BSD)
Stamp Duty Based on the Purchase Price or Market Value, whichever is higher:
Every $100 or part thereof of the first $180,000 – $1 Every $100 or part thereof of the next $180,000 – $2 Every $100 or part thereof of the remainder – $3
For ease of calculation, if the purchase price is more than $300,000, stamp duty payable will be: 3% of purchase price minus $5,400
Additional Buyer’s Stamp Duty (ABSD)
On 7 December 2011, the Government announced the introduction of the Additional Buyer’s Stamp Duty (ABSD) to be paid by certain groups of people who buy or acquire residential properties (including residential land) on or after 8 Dec 2011. Subsequently, on 11 Jan 2013, the Government announced the revised ABSD rates applicable to purchases or acquisitions of residential properties on or after 12 Jan 2013.
Affected buyers are required to pay ABSD on top of the existing Buyer’s Stamp Duty (BSD). From 12 Jan 2013, buyers or transferees who are:
a) Foreigners (FR) and entities would have to pay ABSD of 15% on the purchase or acquisition of any residential property.
b)(i) Singapore Permanent Residents (SPR) would have to pay ABSD of 5% on the purchase or acquisition of their first residential property.
b)(ii) Singapore Permanent Residents (SPR) who already own 1 or more residential properties would have to pay ABSD of 10% on the purchase or acquisition of another residential property.
c)(i) Singapore Citizens (SC) who already own one residential property would have to pay ABSD of 7% on the purchase or acquisition of the second residential property.
c)(ii) Singapore Citizens (SC) who already own two or more residential properties would have to pay ABSD of 10% on the purchase or acquisition of another residential property.
The ABSD is payable by affected buyers at fixed rates on the actual price paid or market value of the property whichever is the higher.
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.
Completion of Sale
‘Buyer’s Stamp Duty (BSD)‘ and ‘Additional Buyer’s Stamp Duty (ABSD)‘ sections above.
Inspection Before Taking Over Property