Some Facts
Singapore imposes restrictions on purchase of property by foreigners. These are outlined in the Residential Property Act with a view to provide Singaporeans with equal opportunity to purchase property on the island nation at fair prices. The Act was amended in 2005 and prior approvals for foreigners to purchase apartments (strata-titled properties) which were required earlier are no longer necessary. Foreigners however still need prior approval for purchase of vacant land, bungalows and houses. They are also not permitted to buy Housing Development Board (HDB) apartments unless they include a Singaporean citizen and form a family nucleus in the apartment that they purchase. Expatriates desirous of purchasing restricted residential property in Singapore can download the application form at http://www.sla.gov.sg, fill it in and submit it to the Land Dealings (Approval) Unit.
You can buy property in Singapore in two ways:
1. Freehold Title which permits the owner to hold property forever.
2. Leasehold tenure which transfers possession of the property to the owner for the duration of the lease.
Real Estate market in Singapore
Riding high on a strong economy, growth in foreign capital inflow and a property boom, real estate prices in Singapore have witnessed an increase. You may look for a property on your own by surfing the internet classifieds on a number of sites listing properties for sale in Singapore. Alternatively you can look up the classified column in local newspapers, the Straits Times being the biggest and most widely read paper in Singapore. The best way to ensure that you get a good deal and save time and money is to hire a property agent. Agents have their finger on the pulse of the property market and have in-depth knowledge about various residential districts. Engaging an agent will free you from the hassle of dealing with the complex procedure of buying property in Singapore all by yourself.
Documentation & Procedure
Once you like a property and have decided to buy it you must procure an option to purchase form. To get this form a payment of 1% of the purchase price must be made to the seller who will draw up the form himself or through his agent. You will then have a period of 14 days to complete purchase. During this time you will sign the option and return it to the seller together with an amount of 4-9% of the purchase price. This may be done the other way around as well with you drawing the offer to purchase and handing it over to the seller for his signature.
The next step involves getting your lawyer to draw up the Sales and Purchase Agreement. The process of finalizing the sale should take 10 weeks or so. During this period you would do well to arrange an inspection of the property to see that the property and furniture and other items mentioned in the contract are in accordance with what is stipulated in the contract. At the time of finalization all fees (legal and other costs) and the balance amount will have to be paid.
The purchase procedure will be complete only when the final balance is paid and the Certificate of Title is issued to the new owner. If you opt for a mortgage then the bank will hold the Certificate of Title until the loan is paid off in full.
Property Tax
Property tax in Singapore is levied at the rate of 10% of the annual value of the property irrespective of the use to which the property is being put. If the owner is occupying the property he is entitled to a rebate and will pay only 4% of the annual value which is calculated based on the rent attracted by properties of comparable size, value and location.
