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Rules for Foreigners Buying Properties in Singapore

Can foreigners buy property in Singapore?

The answer is, YES! That being said, there are essential rules for foreigners buying property in Singapore that you need to keep in mind. Of course, there will be hundreds of pages of legal jargon for you to wade through but after you read this article, you will be able to make sense of these complicated jargons and realize what are the things you really need to know to make the purchase.

Why should you buy a property in Singapore?

Since the 70’s, foreigners are quite interested in buying property in Singapore. If you’re living outside Singapore, but considering a move to this stunning island, endless opportunity awaits you! The real estate industry in Singapore is exceptionally convenient to any foreigner looking to buy condominium units or private apartments.  

The extraordinary transformation of “the Lion City” from a malarial-infested swamp to a prosperous metropolis is inspiring and impressive. Friendly to foreign investors, Singapore has a pro-business administration. Openness to foreign investment, strategic location, and a vibrant community. If it’s not the best time to invest in Singapore, then when?

Guide to Buying Property in Singapore

The number of foreigners buying property in Singapore spiked incredibly since 2010. The robust Singapore economy has resulted in hundreds of thousands of global professionals to work, relocate, and settle down in the “little red dot”.

That said, purchasing property, especially in a foreign country, is incredibly challenging and has rules. Hence, this guide to buying property in Singapore will be a great help.

Buying condo in Singapore for foreigner usually involves the following process:

● Setting up your budget for buying a property
● Getting a real estate agent
● Consulting a Singapore property lawyer
● Getting a mortgage in Singapore
● Paying the Option to Purchase fee
● Reviewing the contract and sign the deal

Now, according to the Singapore Land Authority, a foreigner in Singapore is someone who is not the following:

● Singapore citizen
● Singapore society
● Singapore company

If you, as a foreigner, want to own a piece of Singapore, here’s the quick and easy step-by-step guide discussed in Layman’s terms

Step 1: Restricted and Unrestricted Properties

Although Singapore places no restrictions to foreigners buying commercial or industrial properties, like most countries in the world, there are restrictions to buying residential properties.

Residential properties are further categorized into properties that are restricted and unrestricted by Singapore’s Residential Property Act. This Act disallows foreigners from acquiring the following properties:

● Terrace house
● Landed Property
● Place of worship
● Bungalow/detached house
● Vacant Residential Land
● Landed Property not approved for condominium developments by the Planning Act

Now, the residential properties a foreigner can purchase under Singapore’s Residential Property Act are as follows:

● Any apartment of a building
● Any unit in a condominium development approved by the Planning Act (the Act disallows a foreigner from acquiring all the apartments in a permitted condominium development without prior approval)
● Shophouse intended for commercial use
● An estate in restricted residential property leased for a term not going beyond 7 years, including any term subject to renewal

Complying with the rules above, you can determine the market you want to invest in. 

Step 2: Get an agent + Consider costs 

Contact an agent who will scout properties in Singapore on your behalf according to your requirements. Once an agreement is reached, consider the following costs.

Option to Purchase

Option to Purchase is an agreement exercised between the buyer and seller of a property. Option to Purchase agreement follows various stages:

● Seller prepares the contract
● Buyer reviews it
● Seller signs it
● Buyer signs the acceptance copy
● Buyer pays the deposit fee for the property
● Buyer lodges a caveat in the Registry of Titles

Sale & Purchase Agreement

This is a legal contract that establishes the terms of a transaction. The cost details the contract may include:

● Legal Fees: Fees involving hiring a lawyer, may cost about 0.3% of the property price.
● Agent Fees: Usually about 1% of the property price
● Registration Fees
● Stamp Duty: There are two types of payable stamp duty: Buyer’s Stamp Duty (for all types of properties), Additional Buyer’s Stamp Duty (for residential properties). Foreigner buying property in Singapore has to pay Additional Buyer Stamp Duty (ABSD), which costs you up to 3% of property value.

Rules for foreigners buying property in Singapore are what you must look into and abide by if you’re a foreigner thinking of buying property in Singapore. This article will get you started on the rules, regulations, and laws you need to consider in making the purchase, so that you can make an informed buying decision on your chosen property.

Housing Types in Singapore

When you are relocating to somewhere new, the first thing in your mind is to find a comfortable living arrangement. Singapore boasts a wide range of housing types to satisfy your needs, but still you have to browse different segments of society to choose a friendly neighborhood and decide whether to buy or rent a house. To make sense of real estate market in Singapore, we have painstakingly scraped up the essentials and created a legibly all-inclusive overview of types of housing in Singapore.

Types of Housing in Singapore

Habitats in Singapore ranges from landed property to branded modern studio apartments to those exclusive homes away from the hustle and bustle of cities. Fundamentally, housing in Singapore falls into three general categories: public housing, private dwellings, and hybrid properties. Let’s find out the types of houses best suited for you from these diverse range of houses available in Singapore.

1.   HDB Flats

Since the early 70’s, the Singaporean Government has effectively regulated the property market and placed restrictions on foreigners looking to purchase property in the country. Basically, these restrictions helped Singaporeans to afford home in their country.

To that end, HDB flats were born! The Housing and Development Board (HDB) regulate and build these flats. The government heavily subsidizes these flats to keep them well within the reach of ordinary Singaporean citizens. Today, more than 80% of all Singaporean citizens live in HDB flats.  To be eligible for HDB property, you have to meet certain requirements. For instance, your household monthly income has to be between $6,000 and $12,000. The flats are sold on a 99-year lease agreement. Depending on different segments of societies, HDB flats come in various forms as follows:

Studio Apartment

Studio apartments are sold on a 30-year lease agreement. These apartments are small in size at 36-45 sqm and designed to accommodate elderly residents with modest income.

2-Room Flat

These cozy two-room HDB flats are designed to meet the basic needs of less affluent households. About 45 sqm in size, these two-room flats come with bedroom, kitchen, bathroom, storeroom and living room.

3-Room Flat

About 65 sqm in size, these three-room HDB flats are tailored for newbie parents. An improvement from the two-room flats, the three-room flats include extra bedroom, common bathroom, master bedroom with bathroom, kitchen, store room, and service yard.

4-Room Flat

Four-room HDB flats are basically the three-room flat with an extra bedroom. These flats are around 90 sqm, and they are ideal for young couples

5-Room Flat

With estimated living space covering around 110 sqm, the five-room flats comprise of an extra dining area and numerous other amenities. 

3Gen Flat:

Covering 115 sqm, the 3Gen or 3Generation flats are specifically tailored to accommodate multiple-generation of families. These flats are part of a new project, kicked off with 84 units built at Yishun.

Executive Flat

With an estimated 130 sqm of floor area, Executive flats are the biggest among HDB flats. Each unit comes with three bedrooms, en suite bathroom and additional space.


To meet the growing needs of people of higher income, the Design, Build and Sell and Scheme (DBSS) came into existence in 2005. DBSS flats is a combination of HDB flat and Executive Condominium.

2. Public Private Hybrid Properties

Public Private Hybrid property started off as subsidized government housing, then converted into private residence. Hybrid properties are designed for individuals who can afford better HDB but are hesitant to go for a private property.

Properties included in this tier are:

  • Housing and Urban Development Company (HUDC) Flats
  • Executive Condominiums (EC)

3. Private Residential Properties

Private residential properties are much more expensive than HDB flats. Owing to stable economic growth and arrival of affluent foreigners has led to the establishment of these posh properties. Private residence falls under a “freehold” status rather than under leasehold status.

Properties in this tier include:

a.     Landed Properties

● Shop
● Town Houses
● Cluster Houses
● Terrace Houses
● Detached Home
● Conservation Home
● Good Class Bungalow
● Semi-Detached Houses

b. Non-Landed

● Condominiums
● Apartments

In the quest for your new home in Singapore, it’s imperative that you familiarize yourself with housing types. Hence, this article introduced you to the diverse range of homes available in Singapore so that you can make an informed decision. Singapore might be a tiny island, but diverse types of abode prove that with proper planning, you will get what you need at your estimated budget.

Freehold vs. Leasehold Property in Singapore

When buying or selling a condo, many people in Singapore prefer freehold property under the assumption that the government won’t be able to intercept it, you can pass it down from generation to generation, and it’s worth more overall.

While these are some excellent points, they may not cover the whole truth behind the freehold vs. leasehold Singapore debate.

What’s the Difference Between Freehold and Leasehold?

The main difference between freehold and leasehold property is their tenure length.

Freehold describes a property that can be held indefinitely by the owner, while a leasehold property will return to the state after 99 years. There is also the case of Colonial-era property which has a 999-year tenure, but for all intents and purposes, this could be considered freehold as well.

Based on tenure alone, many will opt to buy a freehold condo, but there are some caveats you might want to consider.

Is Freehold Property Untouchable?

While many people think that their freehold condo can be passed down to future heirs without the possibility of government interference, that’s simply not true. If your freehold property is in the path of any public structure, like a highway or city park, the freehold becomes null and void.

Additionally, your freehold condo may be forfeited in an en-bloc situation, meaning that if your entire building of owners agrees to sell, the freehold isno longer valid.

The Value of Freehold vs. Leasehold Condos

It’s also commonly believed that a freehold property is worth more than a leasehold one, and the logic does make sense. If you figure that the owners of a freehold property have more on the line, the condo should be worth more—but this almost always a myth.

When determining the value of any property, the actual logistics of the condo are going to account for more than the tenure involved. Variables like location, school district, zoning laws, and public transportation options are the true determinants of a property’s value.

So, if the government can intercept your freehold condo at any time and it’s not actually worth more than a leasehold property in most cases, then why buy freehold property at all? There is at least one way that freehold condos have an advantage, and it has to do with supply and demand.

The government in Singapore no longer offers freehold land parcels, and therefore, due to scarcity, freehold property has increased in value.

Overall, buyers and sellers should make their considerations from things like location and district, as previously mentioned, but say both condos are in the same building, and it’s strictly a matter of freehold vs. leasehold, freehold will then hold more market value.

Depreciation: Freehold vs. Leasehold

Depreciation is a term used in accounting to note decreases in value over time. Since the tenure of a leasehold property, at 99 years, is significantly less than the indefinite tenure of a freehold property, a leasehold condo will depreciate, meaning it will decrease in value over time.

The value of a leasehold property will start to differ from that of freehold property once it has 78 years of tenure left, but you’ll run into more significant issues once the leasehold condo hits the 40-year point because, in Singapore, it’ll be far more challenging to receive financing for a leasehold property with less than 40 years of tenure left. In general, the closer that number gets to zero, the faster the property value will depreciate.

In Summary

Keep in mind that freehold property is typically more valuable in the market andcan be passed down through generations, as opposed to leasehold condos which do depreciate. It’ll become important to think about what your children want and whether it’s worth it, in the end, to pay more for the freehold. Similarly, if you find a leasehold property in your dream neighborhood, the freehold label may become less critical.

In short, the choice between freehold and leasehold property is yours to make. As with any big decision, buying or selling a condo will be a test of your values, and it’s imperative that you prioritize. What matters most? Location and schools? Market value and future generations? It’s up to you.

Overall, the best thing you can do is be as educated as possible and make the best decision with the information given. Now that you’re a bit more knowledgeable about freehold vs. leasehold, you’ll have a much better chance of making the right investment for you and your family.