Striking a balance
Are there restrictions to buying property in Singapore?
In order to strike a balance between helping Singaporeans buy a stake in the small city-state and attracting foreign investment and talent, the nation has some restrictions on foreigners buying property through the Residential Property Act.
According to the Singapore Land Authority, a foreign person is not restricted from acquiring any apartment within a building, or any unit in an approved condominium development.
Julian Sedgwick, director and head of international residential sales for Savills, says there are only a few restrictions for prospective overseas buyers.
One relates to landed properties or non-strata titled properties, preventing non-Singaporeans from buying detached, semi-detached, terraced and cluster houses. Foreigners cannot buy 'en bloc' apartments.
It is possible, though, to apply for a dispensation, with the applicant's likely economic contribution often a determining factor. Also, overseas ownership of landed properties in recently developed Sentosa Cove is allowed under special arrangements supervised by the Land Dealings Unit.
If the transaction concerns a standard apartment, a brokerage or agency fee, typically equivalent to one month's gross effective rent, is payable by the landlord. For investment transactions, brokerage fees are usually between 0.4 and 0.5 per cent of the sale price and are payable by the vendor. On the legal side, conveyancing fees are generally regarded as negotiable.
Singapore stamp duty for residential sales is calculated on a fixed scale based on the financial size of the transaction. The starting rate is 1 per cent, which applies for transactions up to S$180,000 (HK$1.072 million).
Title structures and legal processes essentially follow the same track as in Hong Kong. Of course, buyers need to exercise the normal measure of caution.