Are you an entrepreneur who wants to start a new business venture? Or perhaps you are a recent graduate, and you want to take advantage of the great rental yields in Singapore?
Land is one of the most valuable assets in any country. And as a result, it can be hard for foreigners to buy landed property in Singapore. The truth is, Singapore is known for its low crime rate and high safety. But what most people don’t know is that buying land is one of the ways foreigners can legally stay in Singapore.
In this article, I’m going to give you guide to buying landed property in Singapore for foreigners so that you can legally purchase landed property in Singapore and become Singaporeans
Foreign person according to Singapore Land Authority
A Foreign person is a person who is not:
- Singapore citizen;
- Singapore company;
- Singapore limited liability partnership; or
- Singapore society
If a foreign person is interested in buying a house in Singapore, they must apply for a Landed Residential Property under the Residential Property Act. The application should be completed online.
The applicant should be a permanent resident of Singapore for at least five years and have made exceptional contributions to Singapore through his/her employment. Employment income taxable in Singapore is taken into consideration when assessing the applicant’s contribution.
What types of property can foreigners buy in Singapore?
It is true that foreigners can own real estate in Singapore as long as they are able to pay the stamp duty and other related taxes. However, foreigners are required to be permanent residents in Singapore before they are able to buy a property. If you are planning to move to Singapore, you will need to know what types of properties foreigners can purchase. Singapore is an island country with over 7 million residents.
Residential properties can be defined as those that allow for freehold tenure and not leasehold tenure. There are two types of residential properties: restricted property Singapore and non-restricted. Restricted properties may be sold only to Singaporeans or to approved foreign entities. Non-restricted properties may be sold to foreigners, but Singaporeans must apply for approval from the LDAU.
Types of property a foreigner must seek approval to purchase
Terrace house
A terrace house is a home with its own land title that’s part of a row of adjoining houses. Each house shares the wall party but not the garden.
Semi-detached house
A semi-detached house is half of a two house property, each with their own title, but connected by a party wall. A party wall is a dividing wall between two properties, which are connected together by a building or a structure.
Bungalow/detached house
A bungalow is a detached landed house with its own land title. It is one of the most basic and popular forms of housing, and is usually built of timber, brick or concrete. A bungalow is often a low-cost option, particularly for first-time buyers, as it can be built quickly and cheaply. Many new bungalows are constructed using the prefabricated or semi-detached house form.
Total Debt Serving Ratio (TDSR) less or equal to 55%
A borrower’s TDSR is 55% of the total gross monthly income of both the borrower and his/her spouse or common law partner. Borrowers with a TDSR above 55% should be concerned about their ability to service the debt, but there are ways to deal with this problem. If you plan to purchase a home with a mortgage, you can expect to pay anywhere from 1 to 2% more in interest on the loan.
Things you should know about loan amount and tenure?
A borrower’s age, loan term, property type and other factors determine the maximum housing loan they can borrow. The maximum loan tenure is 35 years for non-HDB properties.
How much can one borrow?
If your interest rate is above 4%, you must put down a larger portion of the purchase price. The LTV limit is 75% or 55% if the loan term is longer than 30 years or past age 65. LTV refers to the loan amount as a percentage of the property’s value and its limit determines the maximum amount an individual can borrow from a financial institution for a home loan. For example, if an individual borrows $800,000 to purchase a property valued at $1,000,000, the LTV is 80%. Other factors that can lower LTV include:
- Remaining lease on the property
- Location and state of the property
- Your credit score
If you are a foreigner who plans to buy landed property in Singapore, it can be a daunting prospect because there is so much red tape and hoops that you must jump through. But once you do, you’ll be amazed at how easy it is to buy property here. The biggest challenges that foreigners face when buying landed property in Singapore is that they are often not permitted to buy any property outright. Instead, most are offered a mortgage or a loan for the purchase of their property.
To overcome this, many choose to use an agent. This allows the agent to act as a middle man between you and the developer who will provide you with your home. The agent will then advise you on which project you should apply to, help you get a mortgage and will negotiate a good deal with the developer. SHEinterior highly experienced in handling your process of buying a landed property in Singapore. No need to be frustrated because owning a landed property in Singapore would be much easier with ud. Please give us a call or visit our office for more information.