Singapore is an ideal country for foreigners to buy property in, whether residential or commercial. It welcomes foreign investments and makes it relatively simple for the prospective buyer to find something suitable. Here are the facts that you need to know.
The Difference Between Foreigners and Permanent Residents
A Singapore permanent resident (SPR) has better access to more types of property than a non-resident foreigner. An SPR can purchase some, but not all, executive condominiums and HDB flats. The Singapore Land Authority (SLA) has to give an SPR permission to purchase a landed house. However, the SLA, in making its decision, will look into the contribution the individual has made to Singapore’s economy. This will include their income and taxes.
A foreigner is allowed to purchase any number of condominium units or private apartments, without limit, provided they can get funding to do so. Additionally, certain levies or taxes will apply. There is usually a cash portion that has to be paid, with the balance being loaned by a bank in Singapore, and foreigners can apply through any of these for a housing loan.
Likewise, buying commercial properties is permitted and unlimited in Singapore for a foreign investor who may want to rent these properties out without actually staying in the country. Types of commercial properties available in Singapore are shopping malls, factories, warehouses, hotels, offices, and shops.
The Definition Of A Foreigner
Those who are not considered foreigners in Singapore are Singapore companies, associations, limited liability partnerships, and Singapore citizens. Thus, an SPR who resides in Singapore, and an individual or company not living or conducting business in Singapore is labeled as a foreigner.
There are certain restrictions on foreigners in terms of the types of properties that they are allowed to own. Authority for determining and enforcing restrictions is the ambit of the Housing and Development Board (HDB), which is responsible for the public market related to housing.
An SPR and a non-resident in Singapore are prohibited from purchasing new HDB properties such as the Sale of Balance Flats (SBFs) and Build-to-Order flats (BTOFs).
Properties A Foreigner Is Permitted To Purchase
Single non-residents to Singapore are limited to purchasing properties that are required to be over ten years old and fall under the category of private executive condominiums. On the other hand, SPRs have more options available to them, while also being restricted in some ways. The SPR who is purchasing property on their own (not with another SPR) is not permitted to buy a second-hand HDB flat and are only allowed to obtain a private executive condominium. The latter must exceed the five-year Minimum Occupation Period (MOP), meaning that the property can be leased but not bought within that time.
For clarity, a condominium is similar to an apartment building. Each unit is bought by different owners, but they all have access to certain common spaces like laundry rooms and recreation centers. These are residential buildings.
Two SPRs can purchase certain properties together. These include an executive condominium over five years old that is available for resale, or a privatized executive condominium that is over ten years old. Additionally, only after obtaining their permanent residency and the elapse of three years, they can buy a resale HDB flat.
An SPR who purchases property with a non-resident is limited to an executive condominium over five years old that is available for resale, or a privatized executive condominium that is over ten years old. They can also consider purchasing a semi-privatized executive condominium that was built at least five years ago whereas non-residents must wait ten years. However, a couple who are non-residents in Singapore are limited to a privatized executive condominium that is over ten years old.
SPRs and non-residents may be able to lease a residential property with land, but this is restricted to a maximum of seven years and cannot be extended beyond this period.
Properties A Foreigner Is Not Permitted To Purchase
Foreigners must obtain approval from the SLA to purchase bungalows and terraced houses. The SLA will consider what financial contributions they have invested in Singapore.
In general, foreigners can also buy landed houses and strata landed houses in designated areas in addition to the restrictions mentioned on the ages of executive condominiums. However, some of these types of properties are only permitted to Singapore citizens.
There are more limitations with regard to public housing than private residential properties. Nevertheless, these private properties are more likely to be situated near the Central Business District (CBD) and to have superior designs and fittings. Private condominiums often have saunas, gyms, and swimming pools that residents share, while public housing will likely lack these facilities. The former will cost much more than the latter.
It is recommended that you make use of an estate agent when buying property in Singapore. Their fees are usually only one percent, but their expertise is invaluable. PropertyGuru not only helps you find a home but also assists you with financing. You will be able to consult with one of 25 in-house mortgage experts for a mortgage loan.
This guide makes it simple to know which properties you should invest in.
Ella Woodward is an entrepreneur who has built a career as a freelance writer and building a business from her skill with words and understanding of the needs of corporate readers.