How to buy property in Singapore – A brief guide

Singapore has relaxed its government policies in the last few decades. It has encouraged many foreign investors to invest in the real estate market, however with certain restrictions.  Vacant land, Landed residential property like terrace houses, bungalows, semi-detached houses cannot be acquired by the foreign investors.  The government of the city has reserved all these investment options for the citizens of their country. So, the citizens can buy properties at an affordable price and hold their residential property within the state.

Singpore homes

 

Properties as an foreign investors cant own are:

Singapore offers the best options when it comes to property investment. One can either buy a condominium or a flat in a building of multi-floor but not below the sixth-floor. Purchasing a flat below the six-floor in a building is reserved for the citizens of this city.  Any foreign investors need to get prior approval for holding any of the vacant land or the residential property.

HDB Flats: In case of purchasing an apartment in HDB property, only Singapore citizens are allowed to hold the property.  Around 80% of the country citizen’s occupy the HDB estates in which it provides all the necessary amenities like schools, hospitals, food courts, supermarkets, sports court, and other recreational facilities. Foreign investors cannot purchase these flats, as these are subsidized construction constructed in point of view Singaporean citizens.

Condominium: In case of investing in an Executive condo, the citizens, younger generation youth, and Business entrepreneurs are allowed to hold the property with few restrictions.  The first owner of the executive condo should not enter the reseller market for up to five years.  After five years, the first-owners are allowed to sell the property.  In case of any foreign investors, they can buy the executive condominium only after ten years in which case there would be a relaxation of rules and regulations to a certain extent.

Singpore homes

Step-by-step Guide:

  1. Choose the right lawyer who is well experienced and also possess adequate knowledge about the market. A bank will assign a lawyer in case the investor is interested in applying for a bank loan.
  2. Choose the right property depending upon the buyer wish, either old HDB flats or new small condos.
  3. When both the parties and the buyer have agreed a price has given the sole rights to hold the property for a limited period with an option to purchase. In this case, the foreign investor should pay 1% of the purchase price as an option fee.
  4. After the confirmation, probably within a month, a buyer has to pay the second option of around 15% of the purchase price to the seller as an option fee. Along with this, one can ask the lawyer to draft the purchase offer mentioning the terms and conditions.
  5. Pay 3% stamp duty of the purchase price for the first home, 12% for second home & 15% for the third as a Singapore citizens, whereas 15% for PRs for a second home and 25% for foreigners.
  6. Individual investors can apply for a bank loan, or a foreign investor can raise money for around 70% and settle all necessary payments as well as the property tax and acquire the home.
  7. Collect the keys from the seller and let it out for rentals or move into the new house.

Role of a lawyer in assisting the purchase:

  1. A lawyer plays a vital role in supporting in acquire a property in a foreign land:
  2. A lawyer checks the necessary documents like the ownership of the property, Bankruptcy status of the owner.
  3. He/ she scans all the government documents and also clears if the property is to be included in any road extension projects or any other projects.
  4. the lawyer gives a clear view of the political implication of the land and proceeds with the necessary documents of title deeds.
  5. Once the lawyer does the necessary verification and preparation of the reports, arrange for the payment along with the registration procedures after the completion of the project.

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