BUYING GUIDE
- Selecting a Real Estate Agent
- Ownership
- Eligibility to sell
- Bankruptcy
- Eligibility to Buy
- Financial Planning
- Considering Factors
- Illegal Renovations/Alterations
- Making an Offer
- Option Money/Deposit
- Scheme of Purchase
- Ethnic Integration
- Completing the Sale
- Commission
- Viewing Etiquette
- Foreign Ownership of Properties
- What is restricted residential property under Residential Property Act?
- What is non-restricted residential property under the Residential Property Act?
- Bank Schedule of Payment under Normal Payment Scheme (NPS)
Buying Resale Properties
If you are looking to buy a private property or HDB flat in Singapore, make sure that you know all the pitfalls before you sign on the dotted line. Here are some of the major things you should look out for to avoid getting into a legal or financial tangle during the transaction.
You need to select an agent to service you. Find one who is familiar with the location and type of property you have in mind. Make sure the agent is from a Listed Housing Agency and also a member of the Institute of Estate Agents (IEA). Discuss your requirements with him and be specific. This will allow him to advise and service you in a professional manner.
Always ensure that the seller is the actual owner of the property. You may wish to request for proof when you are making the purchase.
Ensure that the seller of the property is eligible to sell the property. For a private property that is mortgaged to a bank, if the seller has lost money on the sale, and is unable to top up the shortfall on his bank loan, the bank may not allow the seller to go through with the transaction.
On some occasions, the seller of the property may be a bankrupt. With the written consent of the Official Assignee, the seller will be eligible to sell the property, however, the Official Assignee may request for all monies, including the option money or deposit, to be paid to the Official Assignee.
Decide beforehand on a few likely locations that you'd like to live in. Take into account things like the distance to work places, schools, transportation and places that you visit frequently with your family's lifestyle in mind.
Once you've decided on a location and size of home that you'd like, think about how much you'll be willing to spend. Bear in mind other monthly expenses that come with owning or renting a home. Several software exists to assist agents to accurately calculate the cost of buying a home. Providing your agent with accurate data regarding your financial status is vital and will help him to formulate a proper financial plan. If you're buying, talk to two or three banks and discuss a financial plan that you're comfortable with. Your banker will also be able to advise you on the loan quantum available to you. This will help you decide on your budget. Remember, Banks and HDB require documentary proof of income.
- Decide beforehand on a few likely locations that you'd like to live in. Take into account things like the distance to work places, schools, transportation and places that you visit frequently with your family's lifestyle in mind. Size - How large a home do you need? Have you thought about the next couple of years - are members of your family likely to move in or out? How many bedrooms do you need? Where do you and your family spend most time?
- Facilities - Would you like the advantage of a swimming pool, tennis courts and other condominium type facilities? Or, would you prefer to join a recreation club and enjoy a wider variety of leisure?
- Amenities - Are shops, banks, and markets within a short distance away?
Illegal Renovations/Alterations
Ask the seller if the renovations or alterations in the property are legal and approved. Get the understanding from the seller that should the relevant authorities require the seller to rectify any of the illegal renovations or alterations, the seller will be responsible for the rectification, at his own expense.
Once you find a home that you like, discuss with your agent with regards to the asking and market price for the property. Compare that property with those that you have viewed. Refer to your notes about the property. Your agent should be able to help you to decide on an offer price. The rule is to start the offer at a price that seems fair to you and wait for a counter offer. If the seller is serious, you should receive a counter offer.
Confirm that the option money or deposit will be of the standard amount. For private property, the option money is usually one per cent of the purchase price while for HDB resale flats, the deposit should not exceed $5,000. Lastly, when buying an HDB resale flat, it is also important to take note of the following.
As there are 14 different schemes of purchase when buying an HDB resale flat, it is important to check with the HDB or the real estate agent representing you which scheme you are categorised under. This is to determine your eligibility to buy a resale flat.
It is also important to check with the HDB or your agent if you are affected by the ethnic integration policy.
It is the seller’s obligation to hand over the property upon legal completion as agreed in the contract. In the case of a HDB flat, vacant possession is a requirement. Inspect the property before completion. Make known any objections or faults immediately. Check with your agent if you are in doubt.
The Institute of Estate Agents (IEA) has finalised and published the recommended commission / fee for real estate transactions.
Once you have decided on the type of home to purchase, your agent will arrange for you to view all available homes matching your criteria. Bring a small notebook and take notes for later comparison. Put down the positive and negative points about the property. This will help you make an informed decision later. Be punctual for viewing appointments. Dress casually but smartly.
Foreign Ownership of Properties
Since 1973, the Singapore Government has imposed restrictions on foreign ownership of private residential property in Singapore. Such ownership is governed by the Residential Property Act (the Act).
The Act seeks to strike a balance between giving Singaporeans a stake in the country by being able to buy and own residential properties at affordable prices, while attracting foreign talent by allowing permanent residents, foreign companies and limited liability partnerships that make an economic contribution to Singapore to purchase such properties for their occupation.
The Land Dealings (Approval) Unit administers the provisions of the Act and its rules by:
- processing applications from foreign persons for approval to acquire or retain restricted residential property;
- issuing clearance certificates to Singapore companies, limited liability partnerships and societies;
- prosecuting offences under the Act; and
- dealing with general enquiries relating to the operation of the Act.
Under the Act, a foreign person means any person who is not any of the following:
- Singapore citizen;
- Singapore company;
- Singapore limited liability partnership; or
- Singapore society.
If you are a foreign person and are interested in purchasing a restricted residential property, please download and complete the approved form from our web site. Inside this form, there are Frequently Asked Questions. You are required to submit the form together with the relevant supporting documents to:
Land Dealings (Approval) Unit
Singapore Land Authority
55 Newton Road
#12-01 Revenue House
Singapore 307987
What is restricted residential property under Residential Property Act?
A foreign person cannot acquire or purchase restricted residential property unless he obtains the prior approval of the Minister for Law. Such property includes:
vacant residential land;
landed property [i.e detached house, semi-detached house, terrace house (including linked house or townhouse)]; and
landed property in strata developments which are not approved condominium developments under the Planning Act.
What is non-restricted residential property under the Residential Property Act?
A foreign person is not restricted from acquiring:
- any apartment within a building;
- any unit in an approved condominium development under the Planning Act; and Note: A foreign person is not allowed to acquire all the apartments within a building or all the units in an approved condominium development without the prior approval of the Minister for Law.
- a leasehold estate in restricted residential property for a term not exceeding 7 years, including any further term which may be granted by way of an option for renewal.
The following properties are not under the purview of the Residential Property Act. Intended purchasers of these properties are advised to enquire directly with the Housing and Development Board (HDB) regarding their eligibility:
- An HDB flat purchased directly from HDB;
- A resale HDB flat where HDB has consented to the sale;
- An HDB shophouse; and
- An Executive Condominium purchased under the Executive Condominium Housing Scheme Act, 1996.
Bank Schedule of Payment Under Normal Payment Scheme (NPS)
A foreign person is not restricted from acquiring:
| 1st Payment | (a) On obtaining Option to Purchase | 5% |
| (b) On signing of Sales and Purchase Agreement | 15% | |
| Or within 8 weeks from the date of Option to Purchase whichever is the later | ||
| 2nd Payment | On completion of Foundation work | 10% |
| 3rd Payment | On Completion of reinforced concrete framework | 10% |
| 4th Payment | On completion of brick walls | 5% |
| 5th Payment | On completion of ceiling/roofing | 5% |
| 6th Payment | On completion of doors & windows frames are in position, the electrical wiring (without fittings) & plumbing & internal plastering | 5% |
| 7th Payment | On production of the Architect's Certificate that the car park, roads and drains serving the housing project have been completed | 5% |
| 8th Payment | Upon obtaining TOP | 25% |
| 9th Payment | (a) Upon completion of the Sale and Purchase | 2% |
| (b) Upon production of hte Certificate of Statutory completion | 8% | |
| (c) On the expiry of 12 months from the date of notice to take vacant possession | 5% |
