January 10, 2024

A Foreigner's Guide To Buying High-End Property In Singapore (2023)

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A Foreigner's Guide To Buying High-End Property In Singapore (2023)

Eyeing on the newest luxury condo development? Perhaps you’re thinking of getting a landed property in Singapore? Or maybe you’re looking to invest in Singapore’s property market?

Here’s the thing – buying a property in Singapore isn’t so straightforward, especially if you’re a non-Singaporean. Besides planning your budget, you’ll need to be aware of the many property regulations in the country. What’s more, different types of housing have different regulations. And these rules can change depending on your PR status, nationality, and more.

In this article, we’ll give you the full breakdown on what you need to know when you’re buying high-end residential housing in Singapore. (Note: This article will not be covering HDB flats, resale HDB flats, and executive condominiums).

Who are considered foreigners?

Before we dive straight in, it's important to be clear on certain definitions. According to the Residential Property Act, a foreign national who wishes to purchase a residential property in Singapore must first obtain permission from the authorities.

A "non-Singaporean" or foreign individual is someone who is not one of the following:

  • Singapore Citizen
  • Singapore Company
  • Singapore Limited Liability Partnership (LLP)

According to this definition by the Singapore Land Authority, Singapore PR and work permit holders are both considered as foreigners.

This means that for a Singapore PR to purchase residential housing, but they must first obtain approval from the Land Dealings Approval Unit, which is part of the Singapore Land Authority.  Depending on which category you fall into, regulations for buying different types of property may differ.

What you should expect from Singapore property prices?

Singapore property prices are notoriously high and it’s not hard to see why. In a land scarce country, supply for residential units is tight while demand continues to rise steadily.

Another recent reason for this, is the large influx of foreign property investments in Singapore.  As reported by The Business Times, Singapore became the top destination for overseas real estate investments in 2021 - property investment activity in Singapore's real estate market had almost doubled in just the first half of the year. This was up 97 per cent from a year ago, with more than half of the total capital inflows coming from cross-border investors.

Private Condo Prices

According to Business Times, Singapore’s resale condo market in 2021 saw prices jumping 10.3 percent, with total resale volumes surging 81.8 percent year on year. In April 2021, the highest transacted price for a private home was $13.8 million, a unit in Leedon Residence (Bukit Timah). As for units in the city fringes, the highest price went to a unit in The Meyerise which sold for $5.2 million.

As expected, the prices of condo units vary significantly, depending on whether they are a newly launched development, whether it’s a resale unit, and where the condo is located. Based on this article, Studio/ one room condos are significantly cheaper, with prices ranging somewhere around $600k to $700k.

Landed Property Prices

Similar to condo prices, landed property prices are also on the rise. Popular locations like District 19 (Serangoon Gardens, Hougang, Punggol), District 15 (Katong, Joo Chiat) and District 10( Bukit Timah, Holland Road) see high volumes of transactions. Prime locations in District 10 raked in a total value of $2.7 billion from the 191 transactions. According to the URA, prices of landed property climbed 3.7 percent in Q4 of 2021, a steady increase from 2.6 percent in the previous quarter.

Can Foreigners Buy Residential Property in Singapore?

In short, foreigners can buy residential housing in Singapore, however, some restrictions apply. Under the Residential Property Act, residential properties are separated into two categories which are Restricted and Non-Restricted properties.

If you are getting a property in those that fall under the non-restricted category, you can save yourself some paperwork and skip approval processes with the Land Dealings Approval Unit, which is part of the Singapore Land Authority.

Types of Non-Restricted property

  • Condominium Units
  • Strata Landed House in a condominium development
  • Landed Property in Sentosa Cove
  • Executive Condominium unit after privatisation
  • Leasehold Estates in a landed residential property for a period of no more than 7 years
  • HDB Flats (with some limitations)
  • Shophouses (Residential)

Types of Restricted Property

  • Vacant Residential Land
  • Terrace Houses
  • Strata Landed houses (that are not within a condominium development)
  • Semi-Detached House
  • Bungalows
  • Shophouses (Commercial)
  • New BTOs
  • Sale of Balance Flats (SBFs)

Buying Non-Restricted Residential Property for Foreigners

When buying property in Singapore, especially when you're not a Singapore citizen, having a family unit makes a big difference to the options that are available to you.

Here’s a quick run-down on what property options are available to Singapore Permanent Residents and Non-Permanent Residents, according to their relationship status.

Buying Alone

Non-PR buying alone

If you don’t have a Permanent Resident status and you’re intending to buy a property on your own, you’ll face more restrictions when buying properties. That being said, there are still some options you can look into.

Non-PRs who don’t have a family unit can still buy Executive Condos (EC) that are more than 10 years old. ECs automatically become privatised after their 10th year and are considered as private properties. As such, you won’t need to get any approval to buy a unit in these EC units. On top of ECs older than 10 years, you can also buy properties mentioned above.

Singapore PR buying alone

Singapore PRs who don’t have a family unit will also face some restrictions in buying a property in Singapore. If you are a Permanent Resident looking to buy a home alone, you are not allowed to buy new HDBs and resale HDB units. You will be restricted to the private property market and can only buy ECs that have reached their 5-year Minimum Occupation Period (MOP).

Buying Together

Singapore PR buying together with another Singapore PR

If both you and your fiance/ spouse are Singapore PRs, more options are available to you. You can buy a resale HDB flat (3 years after you have attained PR status), resale ECs more than 5 years old, and privatised ECs that are more than 10 years old. Additionally, you can also look into landed properties and private condos.

Singapore PRs buying together with a non-PR

If you’re a Singapore PR but your spouse doesn’t have PR status, HDB housing options will not be available for you. However, you can still buy ECs that are 5 years and older, as well as privatised ECs which are more than 10 years old. Private condos and strata landed properties in an approved condominium development will also be available to you.

Non-PR buying together with a non-PR

Options available to non-PRs jointly buying a property with another non-PR are limited to private condos and ECs older than 10 years old. Other property options are private properties at Sentosa Cove and strata landed properties in a condo development.

Buying Restricted Residential Property for PR

Perhaps you’re thinking of getting a bungalow, or a strata landed house that isn’t within a condominium development. You might think that you’ve lost all chances of buying one of these properties in Singapore.

But that’s not the case!

Although some types of residential properties fall under the restricted category, some foreigners can still own private landed homes in Singapore as long as you meet these requirements:

  • You have been a Singapore Permanent Resident for at least 5 years
  • You have a track record of providing economic contribution in Singapore
  • Your level of  taxable employment income

Approval for applications are done on a case-by-case basis and there aren’t any explicit rules you’ll need to meet in order to fulfil these requirements. However, the general guideline is that you’ll need to be an individual who has been living in Singapore for some time and has a proven track record of making economic contributions in the country.

Extra: What if I’m not a PR and still want to buy housing in Singapore?

If you’re not a Singapore citizen or PR but would still like to buy landed housing in Singapore, you can consider properties in Sentosa Cove. All properties in Sentosa Cove are open to foreigners, whether you hold a PR status or not.

If properties in Sentosa Cove are out of your budget, you can opt for a strata landed house in an approved condominium development. Additionally, you can also buy a leasehold estate in a landed residential property, so long as your stay does not exceed 7 years.

Still don’t meet the requirements? Consider renting!

In Singapore, renting a residential property is much simpler than owning one. Regardless of whether you’re a PR, or a work permit holder, you’re allowed to rent private properties without needing to meet many requirements.

You can rent private condo units and landed properties in any part of Singapore. Details such as your length of stay and terms for rental are dependent on your landlord.

How many properties can PRs buy in Singapore?

You can buy as many residential properties as you like (including commercial or industrial properties). That being said, there are additional duties you’ll need to pay for depending on how many properties you’ve bought in the past. More details on that will be covered in the section below.

The Process of Purchasing a Landed Property

1. Estimate a suitable budget

Property prices are high in Singapore. Before you scroll through listings looking for your dream home, the most practical first step is to have a budget in mind.

  • How much are you willing to pay for a property?
  • What locations are you looking at?
  • How much is your monthly income?
  • Would buying or renting a private property make more sense?

These are some useful questions to consider when setting aside a budget that makes sense to you.

2. Go through listings with a trusted advisor

As mentioned before, your PR status and whether you’re buying a property with a spouse will determine the property types that are available to you. If you're thinking of buying a property, be sure to at least get in touch with someone who is familiar with the local housing market.

Some other aspects you should consider include nearby amenities, in-house facilities, and accessibility of the location.

3. Check for any payable duties

Any Singapore Permanent Resident buying properties in Singapore will need to pay for Buyer’s Stand Duty (BSD), regardless of whether you’re buying private or public housing. In Singapore, if you’re buying a private property, you will need to pay Additional Buyer's Stamp Duty (ABSD).

Rates of these duties may differ, depending on your PR status, your nationality, and how many properties you've bought in Singapore.

Here’s a quick breakdown on the different rates:

ABSD in Singapore

For other foreigners

Foreigners who don’t have PR status pay a standard rate of 30%, regardless of how many properties they’ve bought.

That said, exceptions are given to certain nationalities such as US nationals and PRs of selected countries. If this concerns you, reach out to us to find out more.

4. Apply for a bank loan

Eligibility documents are required when you’re applying for a bank loan in Singapore. Your credit history will play a big role in determining whether your loan is approved. If you’re an offshore foreigner, local banks will verify your eligibility based on your proof of income and net worth statement.

Here are some documents you’ll need:

  • The latest true copy of your proof of income (payslips and bank statements for the last 3 months)
  • Notice of assessment
  • A copy of your passport
  • A copy of your identity card
  • A copy of the property’s Option to Purchase (OTP) or Sales and Purchase Agreement
  • Self-employed applicants will need to submit proof of earnings and net worth statement.

Loan terms and interest rates differ, depending on the loan package of the bank. When applying for a loan, you’ll need to get an In-Principle Approval form from the bank. This approval will indicate the tenure and the maximum amount of loan you can borrow.

On top of that, you’ll also need to obtain a Loan-to-Value (LTV) Ratio. The LTV will determine the amount of mortgage loan you can take up from a financial institution, relative to the property’s market value. Those without outstanding mortgage loan get to borrow as high as 75% of the property’s market value.

5. Make an offer

Now that you’re all set, it's time to make your offer! When it comes to buying a landed property, it is important to get advice from a property agent in Singapore.

A good property agent can help you find the best property for your needs and budget, and will be able to provide expert advice on the purchase process. Experienced property agents will have extensive knowledge of the local housing market, and will be able to help you negotiate a good deal on your new home.

Be sure to get someone to represent you before making that offer!

Do foreigners need to buy residential properties through a property agent?

There’s a long list of considerations when you’re buying a property. Due to land scarcity, many regulations are put in place to ensure that Singapore citizens get priority. Preference is also given to nucleus family units, over those who are single.

You don’t necessarily need a property agent to buy a property, however, with so many regulations in place, having a professional who’s well-versed in real estate can help you ease the load. Navigating local regulations and local authorities alone, like the Residential Property Act and the Singapore Land Authority, can be a lengthy process without proper guidance.

If you’d like advice on renting or buying a private property and you’re looking for a hassle-free experience, reach out to us to find out more. We have a team of readily available local property market experts who can help Singapore permanent residents find their perfect home in Singapore.

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