Buying a Property in Singapore is a Good Investment Move
Whether it is for personal residence or a business house, you, as a foreigner might be interested in buying a property in Singapore. Well, it might be simple or a hard thing to do, all of which depends on what property you have your eyes on. First, let’s talk about the background. You are considered a foreigner in Singapore if you are not a Singaporean citizen, a company based in Singapore, Singapore limited liability partnership or Singapore society. As you are reading this, it is very likely that you are none of the above. Now, the next thing you need to know about is the type of property in Singapore. They are classified into two categories:
Restricted property is the property which you cannot buy. Still, if you want to purchase a restricted property and have your reasons, then you could do so if you are approved by the government.
Here is the list of the property which is termed as restricted by the Singapore Land Authority:
- Terrace house
- Semi-detached house
- Bungalow or a detached house
- Vacant residential land
- Strata landed house not within an approved condominium development under the Planning Act
- Shophouse (if it is for non-commercial use)
- Association premises
- Place of worship
Worker’s dormitory/serviced apartments/boarding house (Those which are not registered under the provisions of the Hotels Act).
Remember that even if the landed properties like vacant residential land and Terrace house have been included, you could still buy a landed property in Sentosa. If you want to do so in any other parts of Singapore, you will have to write to the Land Dealings Approval Unit.
You are free to buy any non-restricted property in Singapore, and while purchasing this, you are treated as any other Singaporean. According to the Singapore Land Authority, these are the non-restricted property.
- An Apartment-Flat
- Strata landed house which is in an approved condominium development
- A leasehold estate located in a landed residential property for a term not exceeding seven years, including any further term which may be granted by way of an option for renewal;
- Shophouse (Only allowed for commercial use);
- Executive condominium unit, HDB flat or an HDB shophouse. Industrial or commercial properties;
- Hotel ( only which have been registered under the provisions of the Hotels Act).
If you are still looking to buying a property in Singapore labeled under ‘restricted’, you could make your claim if you meet the following conditions:
- You are a PR holder.
- You have made significant contributions to the economic development of Singapore even as a foreigner.
The Process for Foreigners Buying a Property in Singapore
First off, look at The Residential Property Act of 1973 of Singapore, this is the body which regulates foreign ownership of property, land, and housing. Look at the terms and see if you are missing out on something.
After that, generally, you are to sign the Option to Purchase (for this, you generally have to make an advance payment of 1 to 5% of the deal to the seller), and then you could meet the seller anytime later and finalize the deal. Also, during this process, you are expected to set up the deadline for any other external fees like taxes and the stamp duties.
Stamp Duties and Taxes
For anyone buying a property in Singapore, stamp duty is required to be paid, and it all depends on the type of property, the initial property of the buyer already in Singapore and the status of the buyer. As you are not from Singapore, you should expect to pay a little more.
There are three different types of Stamp duties in Singapore, and they are the following:
Buyer’s Stamp Duty
The BSD is an ad valorem tax. This indicates that for every S $180,000 you spend on a property in Singapore, your tax rates will increase by a percentage. This is applicable to everyone, including a citizen, a non-citizen or a foreigner.
Additional Buyer’s Stamp Duty
As a foreigner, you will have to pay 15% of the property price as the Additional Buyer’s Stamp Duty. However, if you’re from the USA, Switzerland, Liechtenstein, Norway or Iceland, you must pay the same rates as a Singapore citizen. This means you get 0% for the first purchase, 7% for the second and 10% for everything thereafter.
Sellers Stamp Duty
It is for the seller to pay and you don’t have to worry about it. It is applicable if a seller sells their property within four years of buying. They will have to pay 16%, 12%, 8% and 4% for the first, second, third and the fourth year respectively.
With these tips, you are good to go. I hope this will help you.