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Properties in Singapore are sold either on a freehold or leasehold tenure. A freehold title enables the owner to hold the property in perpetuity, whilst a leasehold title confers possession upon the purchaser for the duration of the lease. On expiry of the lease, the title and interest in the property revert to the State.
Eligibility
Since mid-2005, foreigners can buy apartments known as strata-titled properties in all buildings without needing approval from the Singapore Authorities. Previous rules about the apartment block needing to be higher than 6-storeys and classified as a condominium no longer apply.
A foreigner (any person who is not a Singapore citizen, Singapore Company, Singapore limited liability partnership or a Singapore society) will still need approval from the Singapore Land Authority (SLA) to buy land-titled property such as houses, bungalows and vacant plots of land.
Housing Development Board Properties
The Housing Development Board (HDB) is the public housing authority of Singapore that plans and develops public housing that provides with quality homes and living environments.
Only Singapore Citizens aged 21 years of age or older may buy an HDB flat. Their family nucleus must consist of at least one other Singapore Permanent Resident (SPR) or Singapore Citizen. There are therefore very few foreigners living in HDB estates.
Singapore Citizens or SPR may buy properties in Executive Condominium (EC) projects that are in their 6th to 10th year from the date of Temporary Occupation Permit (TOP). Foreigners who are not SPRs and corporate bodies are not eligible to buy an EC in the open market within this period. Permanent residents who wish to buy an EC should contact the developer in the location they are interested in. Foreigners and corporate bodies may buy resale ECs in the open market from the 11th year of the EC project, calculated from the date of TOP.
Resale Levy
Buyers who currently own a flat bought from the HDB or have previously sold a subsidized HDB flat need not pay the resale levy when they buy an EC in the open market. However, owners of direct-purchase HDB flats must have occupied their flats for at least five years before they can buy resale ECs.
Financing the Purchase
Mortgages can be obtained for purchase of all freehold properties and some leasehold properties depending upon the usage and the unexpired lease term. There is not much problem for new leasehold residential properties which generally come with 99 years leasehold. Banks may be unwilling to give loans for residential properties with less than 60 years unexpired lease.
The current Monetary Authority of Singapore (MAS) (August 2006) ruling allows buyers to borrow up to 80% of the valuation (Market Value) or purchase price, whichever is lower. (The percentage is lower for commercial properties.) 10% must be paid in cash; the other 10% can be paid using the buyer's Central Provident Fund or cash. Some banks offer a lower interest rate for mortgages where the residential property is the first property purchased and is for owner occupation.
The purchaser should check the market valuation for the property they want to buy. Valuation directly affects the amount of financing that can be granted for the property. Banks generally do not require a condition survey on the state of repair of a property. However, if there are serious known risk issues, banks may be reluctant to grant a mortgage. The condition of the property also affects market value and hence the actual loan amount that can be obtained under a mortgage.
The purchaser will also need to check if their credit status and income proof will enable them to borrow the amount required.
GOWEALTHY.COM © 2008
For comments: editor@gowealthy.com
Source: http://singapore.angloinfo.com
