Updated: Apr 23, 2022
Singapore is a great place to buy property, and the market is only getting hotter. If you're a foreigner looking to invest in property here, there are a few things you should keep in mind. In this blog post, we will discuss the top 5 things foreigners should think about when buying property in Singapore.
We'll cover restrictions on what foreigners can buy, tax considerations for different nationalities, some of the legal matters to consider, as well as what areas of Singapore are ripe for investment. So whether you're already in the process of buying a property or just starting to explore your options, make sure to read on!
For this article, a foreign individual in Singapore refers to a person who is not a citizen of Singapore, a company incorporated in Singapore, a limited liability partnership established in Singapore, or a society registered with the Registrar of Societies. This includes individuals from other countries as well as residents of other nations.
What are the conditions under which foreigners can buy property?
One of the main considerations for foreigners when buying property in Singapore is whether they are eligible to do so. According to the Land Dealings (Restrictions on Foreign Persons) Act, foreigners are only allowed to buy properties that are:
Strata landed house in an approved condominium development;
Shophouse (for commercial use);
Industrial and commercial properties; Hotel (registered under the provisions of the Hotels Act);
and Executive condominium unit (depending on whether the MOP has been achieved).
Foreigners have to seek approval from the authorities when purchasing the following property types:
Vacant residential land;
Strata landed house which is not within an approved condominium development under the Planning Act (eg. townhouse or cluster house);
Shophouse (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).
It is important to note that foreigners are not allowed to buy HDB flats, which are the government-subsidized housing units that most Singaporeans live in. The only exception to this rule is if the foreigner is a Singapore permanent resident or has been granted citizenship.
What are the tax implications of buying property in Singapore?
Buyer's Stamp Duties, as well as Additional Buyer's Stamp Duties (ABSD, for residential properties), must be paid by foreign purchasers in most cases. ABSD is also relevant to Permanent Residents. The ABSD fee varies depending on the amount of property you already own. In Dec 2021, the Government also announced increase in ABSD rates, which you can read about it here.
Exemptions from stamp duties also apply to nationals and Permanent Residents of United States of America, Switzerland, Liechtenstein, Iceland and Norway who acquire their first home in Singapore. This exemption applies only to individuals who have never owned any properties in Singapore or abroad before.
It is important to consult with a tax professional to determine what taxes you will be liable for when buying property in Singapore. A good real estate agent will be able to recommend a suitable person.
What are some of the legal matters to consider when buying property in Singapore?
When buying property in Singapore, it is important to engage a lawyer who is experienced in handling such transactions. This is because there are several legal considerations that need to be taken into account, such as the preparation of the sale and purchase agreement, loan documentation, and conveyancing.
Your lawyer will also be able to advise you on the different types of property ownership structures that are available in Singapore, and help you to choose the one that best suits your needs. Your real estate agent can help you find a trusted lawyer.
What are some of the best areas to buy property in Singapore?
Some of the hot areas for property investment in Singapore include the Central Business District (CBD), Orchard Road, Sentosa, and Jurong East. These areas are popular because they offer good rental yields and are well-connected to the rest of the city.
If you’re looking for a more affordable option, there are also several up-and-coming areas such as Woodlands and Punggol that offer good value for money. Do check out my other blog post on my top 6 areas in Singapore!
Why is it important to use trusted real estate agent?
There are a number of reasons why it is important to use a real estate agent when buying property in Singapore. Firstly, they will be able to help you to identify properties that meet your buying criteria. Secondly, they will be able to negotiate the best price for the property on your behalf. And thirdly, they will be able to handle all the paperwork and legal matters involved in the purchase.
Engaging a real estate agent is especially important if you are a foreigner, as they will be able to guide you through the process and help you to avoid any pitfalls.
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Frequently asked questions about foreigners buying property in Singapore
As a foreigner, can I get a mortgage when buying property in Singapore?
Yes, foreigners are eligible for mortgages when buying property in Singapore.
What is the process for buying property in Singapore?
The process for buying property in Singapore is similar to that in most other countries. You will need to engage a lawyer, sign a sale and purchase agreement, and pay the required taxes and fees.
Is it a good time to buy property in Singapore?
There is no perfect time to buy property in Singapore, as the market is constantly changing. However, if you do your research and consult with a professional advisor, you should be able to find a good time to buy.
I'm a foreigner, do I need to use a real estate agent when buying property in Singapore?
Technically everyone can purchase properties without an agent. But would we recommend that, especially when dealing with purchases worth millions of dollars? Absolutely not! Yes, it is recommended that you engage the services of a real estate agent when buying property in Singapore. They will be able to guide you through the process and help you to avoid any pitfalls.
What are some of the taxes that I need to pay when buying or selling property in Singapore?
The taxes that you need to pay when buying property in Singapore include stamp duty, buyer's stamp duty, and seller's stamp duty. You should consult with a lawyer or accountant to understand all of the implications before making any decisions. Your real estate agent can help make an introduction.
Please note that the above is meant as general information only, and is not intended to be property investment, legal or tax advice. You should always consult with a professional advisor to get specific advice tailored to your individual circumstances. Please do reach out if you want to have a chat to discuss your personal situation and how I could help you.