How To Buy Property in Singapore as a Foreigner


Despite being the smallest country in Southeast Asia, Singapore has a reputation as being the happiest country in the region. It is attracting many foreigners seeking to invest and live in this idyllic setting. We provide a guide on how to buy property in Singapore as a foreigner.

Why Would A Foreigner Buy Property In Singapore?

Singapore is highly ranked in terms of quality of life. This attribute can be formally measured and looks at aspects like the political, social, and economic climate. Singapore is politically stable and believes in upholding the law and bringing prosperity to its citizens. Although Southeast Asia is a Third World territory, Singapore boasts a First World environment.

Singapore society has embraced five core values, which, inter alia, respect the individual and place an emphasis on the family unit. Studies have confirmed that Singapore reflects its stated value system.

Economically, the country is free from corruption and has a competitive market with open trade. It maintains a vital export component in chemicals and electronics. Singapore draws significant global investment in its business sphere. Its health care and infrastructure are supreme in the region.

In addition to many ex-pats living there, Singapore is home to Malays, Indians, and Chinese ethnicities. It is a multicultural society that prizes community and harmony. Three of its universities rank in the top 50 globally.

Selecting The Type of Property A Foreigner Is Permitted To Purchase in Singapore

A permanent resident in Singapore is still regarded as a foreigner and categorized as a Singapore Permanent Resident (SPR). As such, SPRs can buy non-restricted properties. It is only possible for SPRs to purchase restricted properties if they obtain approval from the Land Dealings Approval Unit (LDAU).

Some types of non-restricted properties available to foreigners are condominiums, flats, certain strata-landed properties in an approved condominium development, an HDB flat, and an HBD shophouse. There are also business properties foreigners can buy. Additionally, they can lease a restricted property for a maximum of seven years. The Housing Development Act guides the purchase of properties.

The LDAU falls under the Singapore Land Authority (SLA) and handles requests to invest in a restricted property. These kinds of properties include semi-detached houses, terrace houses, vacant residential land, detached houses (bungalows), shophouses for purely residential use, and strata-landed houses outside of a condominium development. The lease of restricted homes that exceeds seven years must also be approved.

Ensuring Affordability

Once you have an idea of the type of home you are looking for and if extra approvals are needed, you need to consider what you can afford to pay. PropertyGuru has a tool to find the perfect home from properties that are currently available for purchase. They will help you to calculate your affordability upfront and get a housing loan Singapore pre-approval.

Foreigners buying property in Singapore need to note that if they resell the purchased property within three years, they become liable to the Inland Revenue Authority of Singapore (IRAS) for Sellers Stamp Duty (SSD) of between four and twelve percent, depending on the value of the property in question.

Buyers Stamp Duty and Additional Buyers Stamp Duty

Buyer’s Stamp Duty (BSD) is levied by the IRAS. This is a tax imposed for signed documents from the acquisition and transfer of property in Singapore. It is calculated based on the highest of the purchase price and the property’s market value.

If a cash discount is involved – and provided this information is explicitly stated in the transfer documents – the value of this benefit can be subtracted from the purchase price. However, the BSD tax will still take account of the market value if this is higher than the discounted purchase price. Non-cash benefits do not qualify for a reduction.

Only the first set of documents is liable to BSD. There is no tax on subsequent paperwork.

Additional Buyers Stamp Duty (ABSD) is only levied on residential property, while the BSD applies to any acquisition. Foreigners are charged 30% with effect from December 2021. On the other hand, SPRs pay 5% for their first property, 25% for the second, and also 30% for the third one.

Other Considerations

Singapore banks set Loan-to-Value (LTV) limits for foreigners. If the person has no outstanding home loans, they can get a 75% loan and are required to pay the other 25% in cash. For a property sales price of $2,000,000, the SPR would need $500,000 in cash. Once a loan is secured you can sign an option to purchase (OTP). The bank would have given you an In-Principle Approval (IPA), valid for 14 days.

While some prospective buyers prefer to handle the whole process themselves, many are reassured by the services of an estate agent to guide them through the transaction. For them, the commission is a small price to pay for the service.

You will also need a property lawyer to provide due diligence checks.

It is not that difficult to purchase a property in Singapore if you follow these guidelines.

Share this

Recent articles

More like this