For those planning to move to Singapore, buying a property is a better choice than renting one. However, before purchasing real estate in Singapore it is best to verify the current legislation in order to make sure there are no restrictions. According to the Residential Property Act of 1973, there are certain restrictions for foreign individuals looking to purchase a property in Singapore. These rules apply to both temporary and permanent residents in Singapore. Vacant land for residential purposes, landed properties and property in housing developments cannot be purchased by foreign individuals residing in Singapore.
Foreigners are allowed to purchase condominiums and apartments on the private real estate market in Singapore, but public housing purchases are subject to the Housing Development Board regulations. Also, before buying a property in Singapore, foreign individuals may be required to apply for permission with the Land Dealings Approval Unit.
The video below shows the main steps to buy a property in Singapore:
Provided that all the legal requirements are met, the first step when purchasing a property in Singapore will be to choose the appropriate property and then contact the seller or the real estate agent and agree on the price. In order to buy a property in Singapore you will be required to appeal to the services of a lawyer. Corporate entities may request the services of company formation experts in Singapore that will draft the Option to Purchase agreement. Based on this agreement, one has exclusive rights to buy the property, but 10% of the property price must be paid when signing de agreement. The following step will be the transfer of the property and the payment of the remaining amount of money. Following the transfer of property, the new owner should file for property tax.
When purchasing real estate, one must also take into account the taxes they are subject to in Singapore. The first taxes will be levied when first buying the property and these include the VAT tax, which 18%, the stamp duty that can rise up to 3% depending on the value of the Singapore property and the registration fees for ownership transfer.
After the registration for property taxes, the new owner must calculate the annual property tax that is established taking into account the estimated annual rental value. The property tax rate is progressive and ranges between 10%-20%.
For real estate due diligence procedures you can contact our specialists in company incorporation in Singapore.