Expat Guide: Buying and Financing A Home As A Foreigner in Singapore

Eugenia Liew
Expat Guide: Buying and Financing A Home As A Foreigner in Singapore
There are many reasons why foreigners buy properties in Singapore. Aside from finding a place to call their own, some see properties here as blue-chip investments. No matter the reason, if you are a foreigner looking to purchase your first property in the Little Red Dot, there are a number of considerations to make before signing on the dotted line.
This article will cover the following:
  • Who is eligible?
  • What are the key considerations to buying properties in Singapore?

Overview of foreigner property eligibility in Singapore

Singapore Citizen (SC)
1) By birth with at least one Singaporean parent, 2) by descent, 3) by registration (or naturalisation), or 4) by adoption
All housing types (subject to other criteria respectively)
Singapore Permanent Resident (PR)
Foreigners who meet strict criteria by the Singapore government
HDB resale flats (subject to other criteria), private condos, and landed property in Sentosa Cove; may appeal to purchase landed property elsewhere
Everybody else
Private condos and landed property in Sentosa Cove only
The above gives you a quick idea of what types of properties Singapore Citizens, PRs and foreigners can buy. For more details, keep reading.

Who is Eligible?

People living in Singapore can be grouped into three broad categories — Singapore citizens, Permanent Residents (PRs), and foreigners — each with a different set of properties they can or cannot purchase.
A person becomes a Singapore citizen by birth with at least one Singaporean parent, by descent, by registration (or naturalisation), or by adoption; PR status is granted to foreigners who meet a very specific set of criteria laid out by the Singapore government; and the ‘foreigner’ label applies to anybody who does not fit squarely into the above two categories.
Generally speaking, PRs enjoy many more benefits than foreigners, especially in terms of healthcare, housing and education. However, both are not allowed to purchase or rent subsidised new flats from the Housing Development Board (HDB), and they do not have access to neither the Central Provident Fund’s Housing Grant nor mortgage loans from HDB at a concessionary interest rate. They also cannot buy landed property (except foreigners who have been a PR for 5 years and make an ‘exceptional economic contribution’ to Singapore may seek approval from the Land Dealings unit at the Singapore Land Authority and foreigners and PRs who are buying a property in Sentosa Cove).

Key Considerations for Foreigners Buying Property in Singapore

Here’s a guide to the five key considerations foreigners should take note of when buying a property in Singapore.

1. The Properties That Foreigners Can (and Cannot) Purchase

Here is a list of properties you cannot purchase as a foreigner:
  • Public housing, or properties developed by HDB
  • Brand new Executive Condominium (EC), otherwise known as properties that were jointly developed by HDB and a private developer
  • Private, landed properties that sit on the mainland of Singapore — with some exceptions (see below)
Here is a list of properties you can purchase as a foreigner:
  • Resale EC that is more than 10 years old
  • Apartment or condominium unit by private developers
  • Strata landed house in an approved condominium development
  • Leased estate in a landed residential property for a term not exceeding seven years, including any further term which may be granted by way of an option for renewal
  • Private, landed property in Sentosa Cove
  • Private, landed property with prior approval from the Singapore Land Authority
For Singapore PRs, your property purchasing options open up a little. Aside from all of the above, PRs are allowed to purchase a resale EC that is between five and nine years old, as well as a resale HDB flat three years after obtaining your PR status (but only if you are jointly buying as two Singapore PRs).

2. Property Prices in Singapore

The actual value of a home in Singapore will naturally vary based on many factors, such as maturity of the estate, distance to amenities, the type and age of the property, etc. With that said, properties in Singapore certainly do not come cheap for foreigners.
The PropertyGuru Property Market Index during Q2 to Q3 of 2020 which measured private property prices in the peak of the COVID-19 outbreak still saw marginal price increases of 2.15% this year with the top 5 performing districts in Singapore based on asking price having a median asking price between $1,128 and $2,728 per square foot. While private home sales have seen records in August, up 13.6% year-on-year.

3. Loan-To-Value (LTV) and Total Debt Servicing Ratio (TDSR)

The loan-to-value (LTV) ratio is the amount that you are allowed to borrow to finance your home. For example, an LTV ratio of 90% means that you can borrow up to 90% of your property value or purchase price (whichever is lower). The idea behind the LTV ratio is simple: lenders don’t want buyers to borrow beyond their means. As part of a cooling measure, the Singapore government recently tightened the bank loan LTV from 80% to 75%, which means that you can, at most, borrow up to 75% of your property value or purchase price.
Going hand in hand with LTV is TDSR, or total debt servicing ratio, which is another way the Singapore government attempts to limit the amount individuals can borrow for mortgage purposes. What’s different, though, is that TDSR restricts your total debt obligations to 60% of your monthly income. This means that if your income is $5,000, your home loan repayments, plus any other loan repayments, cannot exceed $3,000.

4. Buyer’s Stamp Duty

All property buyers, local or foreign, have to pay a buyer’s stamp duty (BSD), which is basically a form of tax on your home. The higher the purchase price or market value of the property, the more tax you end up paying.

The BSD is calculated as such:

Purchase Price or Market Value of the Property
BSD Rates for Residential Properties
First S$180,000
Next S$180,000
Next S$640,000
Remaining Amount

5. Additional Buyer’s Stamp Duty

This is where buying a property in Singapore as a foreigner becomes a little more financially taxing. On top of BSD, PRs and foreigners are required to pay the Additional Buyer’s Stamp Duty (ABSD). This is an added tax of 5% of the total purchase price of a PR’s first property, 15% for second and all subsequent properties, and is 20% for non-PR foreigners. It is payable within two weeks of signing the Sales and Purchase Agreement of any property.

Current ABSD rates:

Who Must Pay ABSD
Singapore Permanent Resident (PR) buying first property
Singapore Permanent Resident (PR) buying second and subsequent properties
Foreigner buying any property
Exceptions: US Nationals, or Nationals and Permanent Residents from Switzerland, Liechtenstein, Norway, and Iceland are allowed the same stamp duty treatment as Singapore citizens.
If you’re a foreigner living in Singapore and you’re looking for a landed property to call home or a condo to purchase, browse the top properties for sale on PropertyGuru. If you’re not looking to buy at this stage, you can also find the best apartments and rooms for rent on PropertyGuru.
Need help securing a home loan to financing your property purchase? The Home Finance Advisors at PropertyGuru Finance can give you a hand and provide suitable recommendations, tailored to your needs and preferences.
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