In the current age, Singapore has come to be a hotbed of expats and wealthy people who are attracted here by the low personal taxes, lax corporate tax laws, job opportunities, and a number of other financial incentives purposefully put in place by the government for this very purpose.
If you’re one of them and are interested in investing in this country, you know that one of the most attractive form of investments in Singapore, just like anywhere else, is property.
But beware, there are a number of regulations and others important factors you need to know about before you jump in and start purchasing property in Singapore, here are some of them.
1. What Properties You Can Own
As a foreigner, options for which property you can own are limited. This because of a law implemented by the government in 1973 that aimed to restrict foreign ownership of property. However, the law was amended in 2005, and now foreigners can purchase non-condominium housing that’s less than six stories tall without needing to have prior approval.
Here are some guidelines to let you know what’s fair game and what is not.
Properties you CAN buy
– Properties in buildings that that are 6 plus levels high, including on or below the ground floor.
– A leasehold* estate in restricted residential property for a term not exceeding 7 years including any further term which may be granted by way of an option for renewal.
Properties you CANNOT Buy
Note: It would be good to point out here that you aren’t forbidden from buying these properties, but you need explicit prior approval from the government before you can own any.
So if you’re a foreigner, you would be restricted from purchasing property that is on:
–Undeveloped / Vacant land: So you cannot buy say, a plot of land that hasn’t already been had something build on it. So it would be difficult to buy a plot of land then build your own house on it.
–Lone Residential property: such as land in suburbs, bungalows, etc.
–Housing in buildings of less than 6 levels: This rules out most standalone houses and shorter apartment buildings.
In addition, under Singapore’s GIP (Global Investor Program) which is managed by the Economic Development board, a foreigner can be eligible for Permanent residence if they have invested a certain amount (usually totalling around $2,000,000) in business startups, venture capital funds, trusts or foundations, or properties.
So if you are looking to become a permanent resident and you have deep wallets, then through this program, buying property here is a good way to get yourself and your citizenship consider.
You need to keep in mind how much you’re willing to pay to get the property. If you want to buy a property rather than lease it, you’ll first need to give at least 1% of the property value (as ‘consideration’) to the seller’s property agent or solicitor in order in order for them to give this option. Then you’ll have 14 days to sign the agreement.
You will also have to pay for inspections, the actual deposit (which shouldn’t exceed $5,000) and and your agent’s commission.
The current estimates say that the average price of investing is at -3.67% this year. While this looks bad, do not worry. In the mid to long term future, your value increases by around 1.7%. Further on, your property’s value may increase by up to 68%. Which will be a great ROI for your property.
If selling your property at this point would be difficult, then renting it out is still a good option. Singapore’s laws are very favourable to landlords. All disputes are handle according to the tenant landlord contract, rather than predetermined laws.
Last but not least, in fact this is probably the most important factor to consider when buying property. Singapore is not a large country, but the property values vary from place to place.
The primary forms of housing are the HDB (built and maintained by the housing development board). A large majority of Singaporeans live in such complexes, which are less of apartment buildings and more of self contain mini cities. They have their own markets, schools, recreational facilities etc.
So while housing can be very expensive in Singapore, you can see that there’s lots of potential in the different options in the real estate sector for you to make an investment that would bring you passive income in the future.
*Leasehold: You are the owner of the property for a specified period of time
*Freehold: You, as the owner, have permanent rights to the property
Just like when you’re searching for property anywhere else on, you will need to get a property agent to help you find the best property. This is while keeping in mind your best interests in price negotiations and legal matters. They also help you out after you have bought the property by putting all the documentation in order.
However, as most property companies share a database of property listings all the city, you should only enlist one agent at a time. In most other countries like the US, you will choose from a number of different real estate agents. Who will each show you their houses and then you choose whichever you think suits you best. But in Singapore, it is generally recommended that you only choose one for the reason stated above.
However, common sense also has to prevail. If the realtor is incompetent, unhelpful, or generally not making you happy, then that’s a green light to get on with it and do whatever you need to do.
From this, you are prepared to get into the Singaporean market, and you should hopefully have enough to get started. Do you still have any questions or parts you find unclear, then feel free to leave a comment down below. There’s nothing here to make you think that.
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