Singapore has established itself as one of the most popular destination for property investment since early 90's. Majority of the people who have invested in Singapore property from the earlier days have at least triple their wealth. One of the most common question ask among investor who are keen to invest in Singapore property is, Can foreigners buy property in Singapore? The answer is foreigner is allowed to purchase Singapore property with some restriction.
Can foreigners buy property in Singapore
Residential and commercial property
There are 2 different types of property for investment in Singapore: residential property and commercial property. There are several categories for each property type and foreigners are restricted to invest in some of the categories.
Singapore residential property includes: HDB, Executive Condominium, Private Apartment and Condominium, and Landed house. HDB is the subsidized housing meant for Singaporean and Singapore PR only. Terms and conditions are applied for Singaporean and Singapore PR. Foreigner is definitely not allowed to own HDB. Executive condominium is a subsidized private condominium for Singaporean, Singapore PR is allowed to buy executive condominium only after 5 years the building is completed (MOP period) - also called semi privatized EC, Foreigner is allowed to buy executive condominium only after 10 years the building is completed.
There is no restriction for foreigner to own private apartment and private condominium in Singapore and there is no restriction on number of private apartment/condominium foreigner can own either.
Foreigner who have intention to purchase landed house In Singapore must seek government approval. The ownership is restricted to those who make adequate economic contribution to Singapore. You can apply online at http://www.sla.gov.sg/ldau/
Singapore commercial property includes but not limited to shop house, office, hotel, warehouse, factory, shopping mall, and many more. There is no restriction for foreigner who wish to purchase Singapore commercial property.
Contact us for your Singapore property needs
Leasehold and freehold
There are 2 types of property tenure in Singapore: leasehold and freehold. HDB and executive condominium is 99 years leasehold. Private apartment and condominium tenure are mainly 99 years, 999 years or freehold. For leasehold property, the land belongs to the state which lease the property for a fee. At the end of the tenure, the land will be returned back to the government. The common question asked is, can foreigners buy property in Singapore with freehold tenure? Foreigners are not restricted to own any particular tenure type.
Singapore property tax
There are few taxes payable upon purchasing property In Singapore. Buyer stamp duty tax, seller stamp duty tax, yearly property tax, rental income tax, and goods and service tax.
Buyer stamp duty composed of the normal stamp duty (3% - SGD 5400) for property below SGD 1,000,000 and (4% - SGD 15,400) for property at or above SGD 1,000,000. The additional buyer stamp duty tax for foreigners is 30%. Under the respective Free Trade Agreement, if you are holding citizenship or permanent residents of Iceland, Liechtenstein, Norway, Switzerland, and United States of America you are exempted from additional buyer stamp duty for your first property.
Seller stamp duty is payable if you sell your property within 3 years from the day you bought. The rate is 12% on the first year and gradually decrease each year.
Yearly property tax of residential property depends on the utilization of the property whether is for own use or it meant to be rented out. If is for own use, the tax rate is range from 0 - 12% of the annual value. If the residential property is rented out, the tax rate is range from 10 - 20% of the annual value. Yearly property tax rate for commercial property is at 10% of the annual value.
Annual value is estimated gross annual rent of the property if it were to be rented out , excluding furniture, furnishings and maintenance fees. It is determined based on estimated market rentals of similar or comparable properties.
Rental income tax rates payable is the net rental income after deducting all the expenses such as interest on the mortgage, agent commission on securing first tenant, maintenance fee, property tax, and many more other claimable expenses. The net rental income tax rate is 22% for foreigners.
Goods and service tax in Singapore is 7% and it is payable for individual who purchase Singapore commercial property if the seller is GST registered individual/company.
More detail on property tax please visit our article on property tax in Singapore
Contact us for your Singapore property needs
The Past And Future
Many local and foreign investors have already made staggering amount of profit by investing property in Singapore and yet there are also many who have regretted because they did not buy and missed the profit. So they question now is not can foreigners buy property in Singapore? but are you ready to seize the opportunity to invest? The economy and Singapore property market will continue to grow along with the continuing progress of building the country with better infrastructure (new MRTs, Highway), political stability, easy of doing business, low unemployment and massive job creation.
One Belt One Road
Singapore has been identified to be part of One Belt One Road which initiated by Chinese government. With its current position as a hub to South East Asia, One Belt One Road initiative will take Singapore economy and property price into higher level and those who invested early will stand for high potential capital appreciation.
Steps to buy property in Singapore
- If you need loan, get your loan assessment done first. So that you know your finance better. This is to protect yourself to avoid any unnecessary issue. Your property agent should be able to help you linked up with the mortgage specialist.
- Once you know about your financial plan, discuss your property type, location, and any other specific requirement you have with your property agent
- After shortlisted your units, arrange to view the property
- If everything is fine, proceed with the booking of the unit