Have you ever thought of buying a Singapore landed property? Whether you are a Singaporean or a foreigner who wants to stay long-term in Singapore, it is tempting to get a Singapore landed property.
Singapore is one of the countries with an international reputation as home. To some people, the real estate in Singapore is eye-catching.
From condominiums to luxury mansions, Singapore landed property can offer many opportunities for investors and homebuyers looking to purchase property in Singapore.
Most Singaporeans get an HDB flat or condominium to stay in, but not many have experience buying Singapore landed property. Only 5% of Singapore households stay in landed properties.
Those are planning to buy a Singapore landed property, especially foreigners who intend to stay for the long-term or immigrate to Singapore. Here are some tips to get a Singapore-landed property.
Tips To Buy Singapore Landed Property
1. Understand Singapore Landed Property Types
There are three main types of Singapore landed property include terrace houses, semi-detached, and bungalows.
According to the Urban Redevelopment Authority (URA), a terrace house is formed by a row of at least three houses. They have common walls between them. It has its land title. Usually the corner house, which is the two houses at the end of the row, is more sought. This is because they have a larger land area.
A semi-detached house has its land title. It is one-half of a pair of two houses. It is separated by a common wall along one side of the premises. Typically, they are joined side-by-side or back-to-back.
A bungalow is a detached landed house. Same with the terrace house and semi-detached house, it has its own land title. The property doesn’t share common walls with other houses. It is surrounded by land space.
2. Understand Singapore Property Rule
When it comes to rules and regulations, the property market in Singapore is heavily regulated. It has some strict rules, especially for foreigners purchasing Singapore landed property. The Residential Property Act governs it.
Singapore Landed property is a restricted type. Foreigners who want to purchase a landed residential property in Singapore must obtain approval from the Controller of Residential Property in Singapore Land Authority. Foreigners and permanent residents will have to seek consent to buy Singapore landed property.
Each application will be based on factors such as being a Permanent Resident for at least five years. They have an economic contribution to Singapore, including employment income assessable for tax in Singapore. Foreigners are allowed to buy the landed property located at Sentosa Cove, but they must also seek approval from the authorities before the purchase.
3. You Can Use CPF And/ Or A Bank Loan
When it comes to buying property, CPF and taking a bank loan are choices where buyers will tap to get some funds on financing their housing purchase.
If you choose CPF savings to buy landed residential property, the remaining lease of the property must have at least more than 20 years. The amount of CPF that can be used is prorated. The amount prorated will be based on the age and remaining lease. If you want to use the maximum amount of CPF, the remaining lease must cover the youngest owner who uses CPF for the property until the age of 95.
The maximum amount of CPF that can be used towards the landed residential property depends on whether you have met the Basic Retirement Sum. If you have not met the Basic Retirement Sum, the amount is up to the lower of the purchase price or the valuation price at the time of purchase. If you have met the Basic Retirement Sum, the amount is up to an additional 20% of the lower of the purchase price or the valuation price at the time of purchase.
If you opt for a bank loan, it is the same loan-to-value and total debt servicing ratio to apply for a bank loan. If you do not have any outstanding loan, the maximum you can borrow is 75%, but you have to put in a minimum 5% cash downpayment. In conclusion, our debt obligation cannot exceed 60% of the gross monthly income. This includes the housing loan.
4. Title Search
Different from HDB flats and condominiums, since it is a landed property that has land, another factor you will want to consider when buying landed property is the land title. You will want to consider doing a title search.
The land will have easements and covenants, which will restrict the land’s use. For example, an easement can give of right of way. Such as, if your property is the only road that can access another property, the land title will have an easement to allow others to access the second property. So there may be a section of your land where you will not be able to build without considering the easement.
You will have to understand your land title state as this is important. It can help you know your limits and avoid trespassing into other properties or state land.
Most of the time, landed properties don’t come with land easements or covenants. Your appointed lawyer should highlight any issues if there are any.
Getting a new home, especially a landed property in Singapore, is definitely exciting.
If you are thinking of getting a landed property in Singapore and have no idea how to do it, these tips will help you start somewhere.