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A Foreigner’s Guide to Buying a Property in Singapore (2022)

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As Singapore prepares to recover from COVID-19, the real estate market is also showing signs of growth. In fact, with the current low-interest rate, foreign demand for Singapore properties is expected to grow as well.

According to the NUS Institute of Real Estate and Urban Studies (IREUS), purchases by non-permanent residents (NPRS) rose to 69 units in June and peaked at 81 units in June 2020. Although these figures are significantly lower on a year-on-year basis, it’s still higher than figures in April and May- during the circuit breaker.

If you’re a foreigner staying in Singapore for the long term, then buying a home here is a good investment. However, there are some restrictions on what you can buy. Here’s a guide to buying a property in Singapore – the types of property you can buy and the process involved.

Who Is Considered a Foreigner Under the Residential Property Act?

A foreign person in Singapore is any individual who is not the following:

  • Singapore citizen
  • Singapore company
  • Singapore limited liability partnership
  • Singapore society

That said, a Singapore Permanent Resident (SPR) is also considered a foreigner.

Types of Properties Foreigners Can Buy in Singapore

Residential Properties Foreigners Can Purchase That Need Approval

  • Vacant residential land;
  • Terrace house;
  • Semi-detached house;
  • Bungalow/detached house;
  • Strata landed house which is not within an approved condominium development under the Planning Act (for example townhouse or cluster house);
  • Shophouse – must be for non-commercial use
  • Association premises;
  • Place of worship; and
  • Worker’s dormitory/serviced apartments/boarding house (not registered under the provisions of the Hotels Act).

Residential Properties Foreigners Can Purchase Without Approval

  • Condominium unit;
  • Flat unit;
  • Strata landed house in an approved condominium development;
  • A leasehold estate in a landed residential property for a term not exceeding 7 years, including any further term which may be granted by way of an option for renewal;
  • Shophouse (for commercial use);
  • Industrial and commercial properties;
  • Hotel (registered under the provisions of the Hotels Act); and
  • Executive condominium unit, HDB flat, and HDB shophouse.

Housing Developers Who Want to Purchase Residential Land for Development

Housing developers that are not considered a Singaporean companies must apply for the Qualifying Regime Certificate (QC) when they purchase residential land for development other than from the government.

However, publicly listed housing developers can apply for exemption on the basis that they have a substantial connection to Singapore. Applications will be assessed using the following criteria:

  • Incorporation in Singapore;
  • Primary listing is on the Singapore Exchange and principal place of business in Singapore;
  • Chairperson and majority of Board are Singapore citizens;
  • A significantly Singaporean substantial shareholding interest[1][2] in the company; and
  • Track record in Singapore.

Criteria for Approval

Under the Residential Property Act, ex-pats living in Singapore can buy both public housing and private properties. Typically, foreigners will be assessed on a case-by-case basis. The most common factors taken into account are the following:

  • The foreign applicant must be a permanent resident of Singapore for at least 5 years.
  • The foreign applicant must make an exceptional economic contribution to Singapore.

But to further understand the criteria for approval, let’s take a look at the restrictions when buying different types of residential properties.

Public/Public-Private Hybrid Homes

Public houses are under the Housing and Development Board (HDB). Singapore Permanent Residents (PR) and non-Singapore Permanent Residents are not allowed to buy new HDB flats, such as Build-To-Order and Sale of Balance Flats. But to purchase a residential property under public housing, there are certain restrictions to keep in mind:

  • If you’re a non-Singapore PR buying alone:
    • You can only buy a private executive condominium (EC) that is more than 10 years old
  • If you’re a Singapore PR buying alone:
    • You can only buy resale ECs that have reached their 5-year Minimum Occupation Period (MOP)
    • You are not allowed to buy a new HDB flat or resale HDB flat alone
  • If you’re a Singapore PR jointly purchasing a residential property with another Singapore PR:
    • 3 years after obtaining your PR status, you can purchase a resale HDB Flat
    • A resale EC that is more than 5 years old
    • A privatized EC that is more than 10 years old
  • If you’re a Singapore PR jointly purchasing a residential property with another non-Singapore PR:
    • A resale EC that is more than 5 years old
    • A privatized EC that is more than 10 years old
  • If you’re jointly buying as a non-Singapore PR couple:
    • A privatized EC that is more than 10 years old

How to Apply

Any foreigner buying property in Singapore is required to seek approval under the Residential Property Act. You can contact the Singapore Land Authority (SLA) at 6478-3444. You can also apply online via the SLA’s website.

Another option is to go to their office at Land Dealings Approval Unit, Singapore Land Authority, 55 Newton Road, #12-01 Revenue House, Singapore 307987.

Procedures for Buying Property in Singapore

Step 1: Determine The Affordability Of The Residential Property

Before you start shopping for residential properties, you must first determine how much you can afford. There are online affordability calculators you can use to get a reasonable figure. This will help you estimate the maximum home loan amount and the property purchase price you can afford based on:

  • Your income
  • Age
  • Existing loan obligations

Step 2: Check if You Need to Pay Taxes

Next, you need to consider the stamp duties that need to be paid. For instance, the Buyer’s Stamp Duty (BDS) is a requirement for all property buyers, including foreigners.

Buyer’s Stamp Duty

BSD is the tax paid on documents signed when you purchase a residential property. The amount depends on the purchase price or market value of the property.

Here are the BSD rates after 20 Feb 2018 Budget changes:

Purchase Price or Market Value of the Property BSD Rates for residential properties
First $180,000 1%
Next $180,000 2%
Next $640,000 3%
Remaining Amount 4%

Additional Buyer’s Stamp Duty

On top of the BSD, foreigners also need to pay the Additional Buyer’s Stamp Duty (ABSD). This is a tax based on the purchase of a residential property. This amounts to 20% of the residential property and is paid in addition to BSD.

Here are the ABSD rates as of 6 July 2018:

Buyer Buying 1st Residential Property Buying 2nd Residential Property
Foreigners 20% 20%
Singapore Permanent Residents 5% 15%

Step 3: Apply for a Loan

Foreigners are eligible for a home loan in Singapore. That said, a foreign applicant must meet eligibility requirements and have an excellent credit standing to qualify for a loan. 

So if you’re looking into taking out a home loan, make sure to prepare all the necessary documents, including but not limited to:

  • A copy of your Passport
  • Employment Pass
  • Proof of income
  • Notice of assessment
  • Property’s Option to Purchase or
  • Sales and Purchase Agreement

You can visit the nearest bank branch in Singapore for a home loan. The amount you can borrow varies depending on several factors. That said, it’s best to get a quote and compare your options.

Here are a few things to consider when applying for a home loan:

In-Principle Approval

First of all, you’ll need to obtain an In-Principle Approval from the bank. This works like a guarantee that the bank will extend a loan to you should you need it. This letter will indicate the loan tenure and the maximum loan amount you can borrow.

In Singapore, the In-Principle Approval letter lasts 30 to 90 days. During this period, you can shop for a residential property, knowing how much loan you can borrow.

Loan-To-Value (LTV) Limits for Foreigners

Loan-To-Value limit is defined by how much home loan you can borrow from a financial institution. That said, LTV is the loan amount in percentage in relation to the property’s market value.

If you don’t have outstanding home loans, you can borrow up to 75% of the purchase price of the residential property. If you have an existing home loan, which means you’ll be taking on two loans at the same time, your LTV limit is 45%. If you have three or more loans at the same time, you can borrow up to 35%.

Take a look at this table to have a better understanding of LTV limits:

Outstanding Housing loans LTV Limit Minimum Cash Down Payment
None 75% or 55%* 5% (for LTV of 75%)10% (for LTV of 55%)
1 45% or 25%* 25%
2 or more 35% or 15%* 25%

Note: Apply the lower LTV limit if the loan tenure is more than 30 years or if it exceeds beyond the borrower’s age of 65 years.

Take a look at this sample computation for a property worth S$1.5 million.

Purchase Price ($1,500,000) Cash Outlay for Foreign Buyer (Non-SPR)
Buyer’s Stamp Duty $24,600 + $20,000 = $44,600
Additional Buyer’s Stamp Duty  $1,500,000 x 20% = $300,000
75% Bank Loan, 25% Cash Outlay $1,500,000 x 25% = $375,000
50% Bank Loan, 50% Cash Outlay $1,500,0000 x 50% = $750,000,000
Total Cash outlay with 75% Bank Loan $44,600 + $300,000 + $375,000 = $719,600
Total Cash outlay with 50% Bank Loan $44,600 + $300,000 + $750,000 = $1,094,600

From BSD to ABSD to the down payment, you’ll need a considerable amount of cash on hand to be able to buy private property. Using the sample computation above, you’ll need around S$719,600 cash with a 75% bank home loan.

If the amount you’ve saved up still comes up short, you can always turn to a licensed moneylender. GM Creditz is one of the top licensed moneylenders in Singapore that offers a wide array of loan options, including foreigner loans.

You can borrow up to 6x your monthly salary plus, they charge a low-interest rate between 1% and 4% with flexible payment terms.

Step 4: Consider Hiring a Property Lawyer

The next step is hiring a local property lawyer. Your bank or real estate agent may recommend a lawyer to you. However, it’s also a good idea to look around and ask for recommendations from family or friends.

But why do you need a property lawyer?

When purchasing property, you’ll need assistance in drawing up the contracts as well as in confirming details of the property and its ownership. The expertise of a property lawyer will be a huge help when performing due diligence.

Their expertise is especially recommended when you’re buying a resale property. Doing so will help you run sufficient checks on the seller and make sure that you’re not falling for a scam.

Step 5: Securing The Property

To make an offer and seal the deal, you’ll need to sign the Option to Purchase (OTP). However, to do so, you’ll need to have the bank’s In-Principle Approval (IPA).

As mentioned in the previous steps, IPA is essentially the bank’s guarantee that the bank will extend you the home loan you’ll need to buy the property. Now that you’re assured of a home loan, you can be confident about signing the OTP.

You will have to put down an option fee of 1% to 5% of the purchase price. This will reserve the property for an agreed period of time while you consider whether to push through with the purchase. Then, you’ll need to pay the downpayment in cash.

Failing to exercise your option to purchase within the set period will forfeit this option fee.

Businessman show money and house

Ideal Places to Live in for Expats in Singapore

Singapore may be one of the smallest countries in Southeast Asia but it is one of the best places to live in Asia. Boasting the lowest crime rates in the world and very high quality of life, it is no wonder that foreigners still consider Singapore as one of the best countries to live in.

If you’ve made the decision to move and live in Singapore, consider the following areas:

Orchard

Orchard Road, being the heart of Singapore, is one of the most popular places to live in. Boasting upscale shopping centres and restaurants, Orchard has unrivalled access to amenities. Best of all, you’ll have convenient access to public transport links. Naturally, properties in this area come with a hefty price tag. So consider whether the high price is worth the advantage of living in such a central location:

  • Famous for shopping malls
  • Have a huge variety of cinemas, restaurants, health and beauty services, and more.
  • Near the Central Business District
  • Excellent public transport links

Tanglin

Tanglin is one of the older and more established areas in Singapore. Considered as one of the ideal places to live in Singapore, residential properties in Tanglin vary from large houses with attractive gardens to low-rise condominiums. Here are some of the benefits of living in this area:

  • A quiet and green area
  • Convenient access to central areas, such as Orchard Road
  • Art galleries
  • Botanic Gardens
  • Variety of restaurants and cafes where you can unwind and relax

Holland Village

If you prefer a bohemian atmosphere with a good selection of amenities and restaurants, Holland Village is a good choice. 

  • Access to a large hawker centre that is located in the middle of Holland Village
  • Plenty of shopping and dining options.
  • Easy access to the Botanic Gardens and Orchard Road
  • Near an MRT

Bukit Timah

Central Bukit Timah is an established residential area and is one of the best places to live for foreigners. It is near the MRT along Bukit Timah Road and has access to a good bus service. Some more benefits include:

  • Proximity to Orchard Road and Botanical Gardens
  • It also has access to international schools which is good for ex-pats living with children.
  • Attractive, green neighbourhood
  • Plenty of restaurant and deli options

Robertson Quay

Whether you’re single or a young couple, Robertson Quay is a popular area for young foreigners. This place is known for its vibrant nightlife with plenty of restaurants and bars along the Singapore River. Best of all, Robertson Quay has a wide selection of new condominiums with a breathtaking view of the River.

Sentosa

While Sentosa is one of the most popular areas in Singapore, it is also the most luxurious place with exclusive, sea-facing residential properties. It boasts a plethora of amenities which means residents will enjoy a variety of recreational activities and attractions. If you’re leaning towards a more extravagant and unique lifestyle, then making Sentosa your home is a good start.

Serangoon

Serangoon is gaining popularity among foreigners with its affordable options. Plus, this area has easy access via the CTE to other parts of Singapore. It’s also a good place for ex-pats with children since it has access to various international schools. Serangoon offers:

  • Spacious condominiums and family residential properties
  • Access to public transport links, including Serangoon MRT station and the Serangoon Bus interchange
  • A variety of local restaurants
  • Access for AIS, Stamford American, The French School, and Serangoon Gardens

Frequently Asked Questions

1. Can Foreigners Purchase Freehold Property in Singapore?

Yes, foreigners can purchase freehold properties and leasehold estate in Singapore. However, they need to pay an Additional Buyer’s Stamp Duty of 20%.

2. Why Invest in a Property in Singapore?

Singapore may be an expensive country to live in, but foreigners buy property because the country’s real estate market is a safe long-term investment. This is because of the limited land supply and high foreign demand. Here are some of the reasons why investing in a property in Singapore is a good idea:

  • Positive market sentiment: As the country slowly recovers from COVID-19, the overall economic condition is also improving.
  • Demand for new types of property: The current trend points towards buyers looking for spacious and well-ventilated properties. Plus, with remote work becoming the new normal, home buyers are looking for bigger properties in the suburban districts that offer value for money.
  • Singapore is a safe haven for investors: Singapore is viewed as one of the top investment destinations. This is due to the country’s low taxes, rule of law, and world-renowned airports.

3. Can Foreigners Get a Mortgage in Singapore?

Yes, foreigners can take out a housing loan to purchase their dream home in Singapore. However, you need to meet the eligibility criteria of the financial institution. Plus, the interest rates may vary for foreign applicants. That said, it’s best to compare home loan packages before making a decision.

Conclusion

Before shopping for a property in Singapore, ex-pats need to understand the buying process, as well as the restrictions as to the type of property you can purchase. On top of that, you also need to familiarize yourself with the property taxes, fees, and charges that come with purchasing a property in Singapore.

Key Takeaways:

  • Under the Residential Property Act, a foreigner living in Singapore can purchase both public and private properties but with a few restrictions. 
  • Any foreign individual who wishes to purchase a residential property in Singapore is required to seek approval under the Residential Property Act.
  • To secure the residential property, you must have an In-Principle Approval letter which serves as the bank’s guarantee that they will extend a home loan to you should you need it.
  • On top of the Buyer’s Stamp Duty, foreigners also need to pay the Additional Buyer’s Stamp Duty (ABSD which is 20% of the residential property.

If you find yourself in need of extra cash – whether for downpayment or other emergency expenses, you can turn to a licensed moneylender. GM Creditz offers customized loan plans at the lowest possible interest rates with the best terms and conditions. Fill out the form to receive a free quote!

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