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.