What should you pay attention to when purchasing a property in Singapore? Buying a property in Singapore regardless of whether you are living or investing, or whether you are a national, permanent resident, or foreigner, you should be aware that buying a property in Singapore requires payment of taxes. In addition, foreigners have restrictions on homeownership.
Singapore Property Taxes
Buying a property in Singapore requires you to pay “Buyer’s Stamp Duty (BSD)“, which is calculated based on the market valuation of the property. The higher the valuation, the higher the tax. Regardless of whether you are a Singaporean or not, you must pay BSD at a tax rate ranging from 1% to 4% when you buy any type of property.
(see Table 1)
|Table 1: Stamp Duty for Buyers of Residential Units in Singapore|
|Property Valuation (HKD)||Tax rate|
Singapore Home Buyers Stamp Duty
In order to suppress the speculation in the property market, the Singapore government has also set up an additional buyer’s stamp duty (ABSD) that is similar to the Double Stamp Duty (DSD) in Hong Kong. Foreigners are required to pay an additional 20% tax when buying a property. The tax is also calculated based on market valuation. For Singaporeans, it is only necessary to pay ABSD when purchasing the second property.
Stamp Duty for Additional Buyers in Singapore
|Table 2: Additional Buyer Stamp Duty for Property Purchase in Singapore|
|Buyer status||Tax rate|
|Permanent residents who are first-time buyers||5%|
|Permanent residents who repurchased||15%|
|Citizens who bought a second home||12%|
|Citizens who purchase a property for the third time||15%|
The types of housing in Singapore mainly include second-hand HDB Flats and condos subsidized by the government. Second-hand HDB flats are not allowed to be purchased by foreigners, but if your partner or family members are Singapore nationals, you can apply for the purchase of second-hand HDB flats through the Non-Citizen Spouse Scheme or Non-Citizen Family Scheme.
Among government houses, there is also an Executive Condominium, which is built by the government and private developers. They are more expensive than HDB flats, and the unit facilities are more complete. Similar to private apartments, if the Executive Condominium is more than 10 years old, it is regarded as private property, and foreigners are allowed to buy it. As for the purchase of general private apartments, there is no identity and age limit, and the supply is also large.
Median Property Prices in Singapore
If you are looking to invest in a property, central business district or downtown area in Singapore’s 28 districts, such as districts 9 and 10 are also great choices; if you live on your own, you can consider district 19 or district 28 in the northeast. It is a concentrated residential area, but it is far away from the urban area. See Table 3 for median property prices (500 to 600 sqft) in these four districts.
|Table 3: Median property prices in main regions of Singapore|
|Region Median||Property price (HK$)|
Apply for mortgage up to 75% of property valuation
In terms of bank mortgages, Singapore has a Total Debt Servicing Ratio regulation, which means that all types of repayments e.g. mortgages, personal loans, and credit card numbers, are not able to exceed 60% of monthly income.
In addition, if you do not have any outstanding mortgages, the bank can lend 75% of the property valuation as your first mortgage. However, if you are applying for a new mortgage the second time, only 45% of the unit value of the loan will be loaned.
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