Commonly Asked Questions
Property Related Expenses
Q: How much is the legal fees for the sale and purchase of a private property?
A: If you are purchasing with a bank loan, you are required to engage a private lawyer to act on your behalf. The legal fees range from S$2,500 – S$4,000 for typical property purchase. Please check with the lawyer directly on their fees.
Q: Are there any agent commission payable to assist me in buying a new launch property?
A: If you are buying a new launch property, we will take our commission directly from the developers.
Q: What is Mortgage stamp fees?
A: This is usually a relative unknown mortgage stamp fees you need to pay when securing any housing loan. The mortgage stamp fee is cap at a maximum of $500. You can read more here.
Q: How much is fire insurance and is it compulsory?
A: The premium for fire insurance is dependable on the value of your property and the coverage of the property. Most basic fire insurance premium range from as little as a few dollars per month. It is compulsory to have fire insurance if you are taking any loan or using CPF to purchase any property.
Q: How much is the typical monthly Service & Conservancy Charges / Property Management Fees?
A: For condominium, the property management fees vary on the share values and the size of the property. They typically range from $250 to $600 per month. For luxury property, the property management fees could be up to S$1,000 or more per month.
Q: How much is my property tax?
A: Property tax is a wealth tax levied on property ownership. It is not a tax on rental income. All property owners have to pay property tax based on the value of their property, irrespective of whether the property is occupied or vacant. Lower property tax rates for owner-occupied residential properties. Read more here.
For non-owner occupied residential properties or investment properties. The owner does not live in the property therefore, owner-occupier tax rates do not apply. Thus, they will be required to be a higher tax rate. Read more here.
Q: Do I need to pay Income Tax for the rental I collected from my investment property?
A: Any rental income collected from renting out the property is considered as taxable income. This rental income will be consolidated as part of your annual income for that financial year and is taxable by IRAS. Read more here.
Q- Are there capital gains tax for property?
A: Yes and No. Generally, the gains derived from the sale of a property in Singapore are not taxable as it is a capital gain. The gains may be taxable if the individual buys and sells property with a profit-seeking motive. When a person is deemed to be trading in properties, the gains from the sale of property in Singapore is considered taxable income. Whether a person is deemed to be carrying on a trade will depend on individual circumstances.
Some criteria used by IRAS to assess if you are trading in properties are as follows:
- Frequency of transactions (buying and selling of properties);
- Reasons for acquiring and selling of property;
- Financial means to hold the property for long term; and
- Holding period
Read more here.
Q: Is Goods and Services Tax (GST) payable for residential properties?
A: The sale and lease of all properties in Singapore are subject to GST, except for the sale and lease of residential properties which are exempt from GST.
Mortgage Related
Q- How much can I borrow?
If this is your first housing loan, the financing is up to 75% of the purchase price or property market value, whichever is lower. This is known as the Loan to Value Ratio. If you are currently serving another mortgage, your loan amount may vary.
For example, if you plan to purchase a $1 million property, the bank can only borrow you to a maximum of $750,000. The first 5% of which is $50,000 has to be paid in cash. The remaining 20% or $200,000 can be paid either in cash / CPF.
If you are a foreigner purchasing your first property in Singapore. Your Loan to Value Ratio may be reduced to 60%. Please check with banks for more information. Click here for more information.
Q- What is the new rules for new housing loans?
A: The maximum housing loan borrowers can take depends on their age, loan duration and property type, and whether they have existing housing loans. Joint borrowers are assessed using an income-weighted average age. Click here for more information.
Q: What is the maximum loan tenure?
A: The maximum loan tenure for housing loans is capped at 35 years for private properties.
Q- As a foreigners / non-resident can I get a mortgage?
Yes – currently foreigners / non-resident can get a mortgage with most banks in Singapore, subject to credit approval. In any event, if the mortgage is insufficient, you would need to use your own funds to purchase.
How much can I borrow as a foreigner?
If this is your first housing loan in Singapore, the financing is up to 75% of the purchase price or property market value, whichever is lower. Some banks at their own discretion may offer financing up to 60-75% of the purchase price. If you already have an existing residential property loan, the refinancing is up to 100% of your loan outstanding, or 90% of the property market value, whichever is lower. This varies across banks. Please check with your banks for more information.
Q- What are the documents required for the loan application?
If you are taking a housing loan from a bank or financial institution. Theses are the following documents required for a housing loan application:
- Duly completed loan application form
- Copy of Identity Card
- Latest certified true copy of your income documents:
- Pay slip or employment letter AND bank statement (latest 3 months) showing salary credit.
- For self-employed, latest 3 months’ bank statements and latest two years’ notice of tax assessment
- Copy of property’s option to purchase or copy of Sales & Purchase Agreement.
Q- Is fire and mortgage insurance necessary?
A: Yes. Fire insurance is required by the bank to insure your property against the risk of fire. You may at your own discretion purchase mortgage insurance for your mortgage. There are many mortgage insurance providers that can be found online.
Q- Do I need a bank account to buy property in Singapore?
A: Yes – You will need a local bank account to pay for the monthly instalment and also to collect any form of rental if you plan to rent out the property.
Singapore Laws
Q – Does Singapore have strict laws on money laundering and terrorism financing?
A: Yes. Singapore is a member of an international task force, called FATF (Financial Action Task Force), which is formed to combat money laundering and terrorism financing. The FATF has published 40 recommendations for countries to adopt in combating money laundering and terrorism financing. Singapore has an obligation to implement these recommendations. The FATF recommendations apply to the real estate and other professional sectors. These include the financial sector as well as other businesses and professions such as the public accountants, casinos, moneylenders, pawnbrokers, company service providers, developers and lawyers. Read more here.
Q – Does Singapore have strict rule of law?
A: A definite yes! Singapore as a financial hub and a leading economy in Asia has a strict rule of law. You will be assured that buying a property in Singapore is safe and secure. Singapore also has a very strong land registry whereby all property transactions will be recorded. Read more here.
Q- Does Singapore give me any automatic visa or residency rights?
A: No. There used to be a policy that if you have invested in a certain amount of money in property and in other business, permanent residency status may be granted. This policy has since been abolished. However, there is another program for investors who are interested in starting up a business or investing in Singapore may apply for the Singapore Permanent Residence status (PR) through the (GIP) by submitting all the required application forms and supporting documents. Read more here.
Q- Is the buying procedure secure?
A: Yes. Singapore respects the rule of law. In any property transaction, the contract will be clearly spelt out for you to go through. If you have any doubts, you may consult your solicitors to go through with you. The property transaction will be registered with the Singapore Land Authority and conveyancing lawyers will be on hand to assist in a smooth transaction. Read more here.
Foreigner buying property in Singapore
Q – Are there any foreign ownership restriction?
A: Foreigners are welcome to invest in most Singapore properties from residential, commercial, retail to industrial properties. However, there are some restrictions. Foreigners are not eligible to purchase any landed properties unless they have approval from the Land Dealings Approval Unit (LDAU). LDAU is a department within the Singapore Land Authority (SLA). SLA is a government department that regulates all land matters in Singapore. Alternatively, foreigners are eligible to invest in landed properties in Sentosa. Foreigners are also not eligible to buy any HDB flats (Public housing) or Executive Condominium. The HDB flats and Executive Condominiums are reserved mainly for citizens. Read more here.
Q- Can any nationality buy property in Singapore?
A: Yes. Singapore properties are open to all nationalities to buy for own stay or for investment.
Q – Is there any minimum sum on the purchase that I make?
A: There is no minimum purchase price for foreigners when buying any property in Singapore.
Q- Can I buy the property under a company name such as a virgin island-based company?
A: Yes. You can use any incorporated company whether registered locally or overseas to purchase a property in Singapore. However, it is always good to check with locally based solicitors for more complex transactions.
Q – What are the taxes that I need to pay?
A: Foreigners purchasing a residential property in Singapore are required to pay taxes on their purchase. The Buyer Stamp Duty(BSD) and Addition Buyer Stamp Duty(ABSD) are the 2 main taxes. Please refer to the Tax Section in the resource tab.
Q- Are there any tax on property rental income?
A: Yes. Rental income refers to the full amount of rental income you receive and related payments you make when you rent out your property. This includes rent of the premises, maintenance, furniture and fittings. Rental income is subject to income tax. This means that any profit or net amount left once you have added together your rental income and deducted any allowable expenses is taxable.
There are 2 types of tax rates. Net rental income earned by foreigners who are tax residents of Singapore are taxed at resident rates. Net rental income earned by foreigners who are non-residents are taxed at the prevailing non-resident rate of 22%. Read more here.
Q-Should I buy the property jointly with my spouse or children?
There is no restriction to buy it solely or together with your spouse or children. However, only the buyers can secure a mortgage loan. Singapore banking regulation does not allow non-buyers to secure loan.
If the buyers plan to buy jointly, they can have the option to buy under “Joint Ownership” so that both of them own the property equally. This is also commonly known as “The right of survivorship”. This clause is used by couples or parents and children buying together. In the event of one passing away, the property automatically goes to the other 100%.
Another type is called “Tenancy in Common”. This allows multiple ownership whereby each person has a fixed share of the property. In the event that one party passes away, that person’s share in the property will be distributed according to his/her will. This is frequently used for unrelated parties buying a property together for investment.
Buyers can also buy under trust for their children if they fall below the legal age which in this case is 21 years old. However, certain condition apply. Please consult a lawyer for more information.
