For Foreigners: How to Rent or Buy Property

Zhen Hao Guo

Zhen Hao Guo

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If you’re a foreigner who has been living in Singapore for a while, you might have toyed with the idea of purchasing a home on this little red dot. After all, renting here does not come cheap as entire apartments in good estates and condos can easily cost upwards of $3,000.. 

On the other hand, purchasing a home gets your foot in the local property market scene. It gives you the possibility of cashing out in a few decades down the road, a home on this island for whenever you visit or to even pass it down to your children should they decide to settle down here. 

So if you’re looking to make that leap from tenant to Singapore property owner, here are some pointers to help you decide if you’re ready (and able) to take that big step.

Who does the Singapore Land Authority consider a foreigner?

To understand which homes you are eligible for, you must first know your citizenship status under the eyes of the Singapore Land Authority (SLA), because they are the ones who decide whether or not you’re allowed to buy a home.

The question seems straightforward enough. Anyone who is not a Singapore Citizen, Singapore company, Singapore limited liability partnership or Singapore society will make purchases on local soil under the ‘foreigner’ status. 

What’s important to note is that the SLA also considers Singapore Permanent Residents (SPRs) as foreigners as far as property purchase is concerned. That said, there are advantages to being an SPR, which includes being eligible for more types of properties.

Singapore Permanent ResidentForeigner
Resale HDB flats (purchased with another SPR or Singaporean)EligibleNot Eligible
Resale ECs (after maturation of 5-year MOP)EligibleNot Eligible
Strata-landed homesEligibleNot Eligible
New launch ECsEligible (if applying with a Singapore Citizen)Not Eligible
Landed properties in Sentosa CoveEligibleEligible
Landed properties (with approval from Singapore Land Authority)EligibleEligible
Private condosEligibleEligible
Sources: HDB, Ministry of National Development, Singapore Land Authority, Singapore Statutes Online

What type of homes are foreigners in Singapore eligible for?

Nothing’s worse than finding the home of your dreams on a property listing site, only to realise that you’re not eligible for it. Understanding the regulation specifics of each home category and the possible steps you can take to appeal your case can help increase your chances of securing the ideal home.

Landed Property

Foreigners in Singapore are required to seek approval from the Residential Property Act before they are allowed to purchase landed property. 

The following types of houses fall under this category:

  • Vacant residential land
  • Terrace houses
  • Semi-detached houses
  • Bungalow or detached houses 

While applications are approved on a case-by-case basis, the Singapore Landed Authority (SLA) has stated that foreigners have to fulfil two criteria before their applications can even be taken into consideration.

Firstly, you’ll need to have been a permanent resident of Singapore for at least five years. Secondly, you must be deemed to have made ‘exceptional economic contributions’ to Singapore. This will be evaluated based on factors such as your taxable income, so be sure to get those banking statements ready before you apply for the Residential Property Act

Landed property in Sentosa Cove is the exception to this rule, where foreigners can make purchases with no prior approval. But renting out said home is a whole other matter, and is strictly prohibited unless separate approval is acquired from the Land Dealings Approval Unit (LDAU). 

Condos

Condos are the choice property for the majority of foreigners due to their relative affordability and availability. Unfortunately, you won’t be able to pick from just any condo on the market. 

Foreigners are only eligible to purchase condos that are considered to be private housing. This includes private condos and resale executive condos (ECs), although the latter can only be made available to foreigners several years after the development’s TOP.   

Unlike private condos, new launch ECs built by private developers and subsidised by the government. This makes them private-public hybrids that are more affordable compared to fully private condos, but off limits to foreigners.

Eligibility Timeline for Executive Condo Purchase

No. of Years After TOPSingaporean Citizens (SC) Singapore Permanent Residents (SPR)Foreigners (FR)
0 (new launch)EligibleNot EligibleNot Eligible
5 years (resale)EligibleEligibleNot Eligible
10 years (resale)EligibleEligibleEligible
Source: Ohmyhome Research

As listed in the table above, SPRs have the additional option of purchasing resale condos that have passed the 5-year MOP mark. 

Public Housing (HDB)

For the most part, HDB flats are off limits for foreigners. These include Build-To-Order (BTO) and resale units.

While you may technically purchase HDB flats under the Non-Citizen Spouse Scheme if you’re married to a Singapore Citizen, your options will be limited to 2-room flexi BTOs and resale flats only. 

ABSD and other tax on Singapore property ownership for foreigners

Quick check before we proceed. Are you a citizen of any of the following countries?

  • Iceland
  • Liechtenstein
  • Norway
  • Switzerland
  • United States of America

Because if you are, congratulations! Foreign stamp duties on property purchases do not apply to you thanks to Free Trade Agreements that Singapore has with these nations. You will still be required to pay Buyer’s Stamp Duty (BSD), but at least you’ll save yourself from the pain of having to foot Additional Buyer’s Stamp Duty (ABSD) on top of that.

ABSD rates were recently raised by the Singapore government in December 2021 in an attempt to cool the local property market. After all, land here is limited. Therefore, preventing property prices from going out of control has always been one of the top priorities for local authorities.

ABSD will cost 30% of your property purchase price, up from the previous 20%. This applies no matter how many residential properties you currently own. And don’t forget, this is charged on top of BSD!

To say that ABSD sums are significant would be an understatement. A property worth $1.5 million would cost $450,000 in ABSD taxes alone. To make a profit, you’ll have to ensure that you hold onto your property until it appreciates beyond your BSD and ABSD charges, and then some.

If that sort of money is something that makes your stomach churn, then renting might still be the better option for you. It’s definitely not the type of money you should consider sinking in unless you intend to play the long term property game, or stay in Singapore long term yourself. 

How long do you intend to stay in Singapore?

This leads us to our next point. Short term property flipping is generally not encouraged in Singapore. If you thought that BSD and ABSD were bad enough, wait until you hear about Seller’s Stamp Duty (SSD).  

SSD was first introduced in Feb 2010 to penalise property owners for selling their homes too quickly to make a quick buck. The prevailing SSD rates for properties purchased on and after 11 Mar 2017 is as follows:

Holding PeriodSSD Rate on property price or market value, whichever is higher
Up to 1 year12%
> 1 year and up to 2 years8%
> 2 years and up to 3 years4%
> 3 yearsNo SSD payable
Source: IRAS, Seller’s Stamp Duty (SSD) for Residential Property

For the same home of 1.5 million, you’ll be paying $180,000 in SSD for selling it within the first year. So unless you’re willing and able to take on such a huge financial repercussions, you hold onto your property for a minimum of three years.

It is highly unlikely that your property would have appreciated beyond SSD, BSD and ABSD combined in such a short span of time, anyway. So renting might really be your best bet in such scenarios.

Can you leave your home for future generations?

If you can picture yourself laying down roots and raising your children in Singapore, then you may wish to consider passing on property assets to your children so that they can have a home here in the future, too. You may do so by setting up a legal trust to guarantee that your property will be automatically transferred to an assigned trustee when you pass on.

While passing on property has been more affordable in the past, a new law introduced by the Ministry of Finance on 8 May 2022 will make it more costly to do so, especially if the trust beneficiaries have not acquired Singapore Citizenship. The law has ruled that ABSD of 35% will apply to all residential property transferred into a living trust on or after May 9 2022. The ABSD will be payable even if the trust is not assigned to an identifiable beneficial owner, although this was previously not the case prior to the passing of this law.

Trust ABSD will be payable upfront, but trustees may apply to the Inland Revenue Authority of Singapore (IRAS) to seek refunds. Appeal applications must be made within six months after the trust has been set up and will only be considered if all future beneficiaries of the transferred residential property are identifiable individuals. 

The amount refunded will be based on the difference between the trust ABSD rate of 35% and the beneficiary with the highest payable ABSD rate. For example, a Singapore Citizen beneficiary receiving their first residential property from the trust will receive the full refund of 35%, as their prevailing ABSD rate is 0%. However, a foreigner receiving their first residential property from the trust will only receive a refund of 5%, since their prevailing ABSD rate is 30%. 

Additionally, if both a Singapore Citizen beneficiary and a foreigner beneficiary are assigned within the trust, only a 5% refund will be paid out since the foreigner’s 30% ABSD rate will prevail.

Therefore, purchasing a home here to pass down to your children is only advisable if you are certain that your children have, or will attain Singapore Citizenship or Singapore Permanent Residency in the future. 

However, depending on your home country’s tax environment and property ownership transference fees, Singapore’s property market may still be more attractive. This is especially so after taking into account the high rental yield potential that homeowners can gain here thanks to a healthy rental market and the relative strength of Singapore’s currency on the global arena. In fact, it is not uncommon to witness foreigners buying property here and renting back home.

In summary, buying a property as a foreigner in Singapore is definitely not for the faint of heart. Those with enough capital and holding power to offset higher premiums of private property as well as property taxes have the best chance of profiting (or at least minimising their losses) in the long term. As for those who are undecided about their future in Singapore, renting might still be the most prudent way to keep a roof over your head during your stay here.

Need financial and/or legal advice on your home purchase?

Ohmyhome’s top Super Agents are no strangers to taxes and restrictions on foreigners in Singapore. Our diverse team has helped migrants from Malaysia, Philippines, Hong Kong settle in comfortably by helping them find the perfect home that fits their budget and family needs. 

Simply submit your preferences to us and let Ohmyhome’s algorithm MATCH you with the right home according to your citizenship and eligibility status. Instead of spending hours scrolling through listings, pick your dream home from our curated list, sent directly to you via Whatsapp.

We also have trustworthy conveyancing partners who will work you through the clauses of property purchase, helping you fulfil every criteria, every step of the way for a smooth and painless property purchase journey. 

Secure an appointment with our Super Agents and legal partners today by calling 6886 9009 or simply messaging us via the chat box at the bottom right-hand corner of the screen. We’re also just a text away via WhatsApp at 9755 1009. At Ohmyhome, we’re always on your side, always by your side.

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