Top 5 Mistakes to Avoid When Buying Property in Singapore – Expert Insights!
Purchasing a property in Singapore can be an exciting and rewarding experience, especially for those looking to invest in the...
Read More
TLDR
When it comes to purchasing a landed property in Singapore, there are three main types to consider: terrace houses, semi-detached houses, and bungalows. Terrace houses are rows of at least 3 homes with common walls, while semi-detached houses consist of two homes sharing a common wall. Bungalows are detached houses with their own land titles. Good Class Bungalows have specific criteria to meet. Prices for these properties can range from over $3 million for a terrace house to around $14 million for a bungalow, depending on the location.
Foreigners need approval to buy landed property in Singapore, and financing options include using CPF savings and bank loans. Title searches are crucial before buying to understand land boundaries and restrictions. While filing a caveat is optional, it can safeguard buyers’ interests in property transactions.
Singaporeans are no strangers to purchasing HDB flats and condos, yet few have ever had the privilege of buying a landed property here. After all, such properties are occupied by only 5% of Singapore households. But for those lucky ones who are getting a landed property or who are curious about the process, here’s your complete guide to owning a landed property in Singapore!
Types of Landed Property Available in Singapore
In Singapore, there are three major types of landed property: terrace houses, semi-detached houses, and bungalows.
According to URA, terrace houses are a row of at least 3 homes with common walls between them, all of which have their own land titles. Corner terrace houses are the most sought-after since they tend to have more spacious plots of land. On the other hand, semi-detached houses consist of two homes that share a common wall, and each one holds their own land title. Most of the time, these homes are side-by-side, but they can also be attached back-to-back.
A bungalow is a detached landed house with its own land title. The property doesn’t share any common walls with any other property and is surrounded by land space.
Notably, these kinds of landed properties can be strata-titled.
Though technically a bungalow, a Good Class Bungalow stands apart from its counterparts with its individualistic traits, meriting a special category all its own.
- A GCB must be located within the 39 GCB areas listed by URA
- Generally, land size of at least 1,400 sq m (about 15,069 sq feet)
- Cannot be more than two storeys high (excluding attic and basement)
- At least 60% of the land must be allocated to greenery and landscape
How Much Does It Cost To Buy A Landed Property In Singapore?
From January 2022 to December 2022, a whopping 1689 resale landed property transactions had their caveats lodged or options issued – according to URA’s Private Residential Property Transactions. Of course, we did not take into account new sales or sub sales, since most landed property transactions are for resale properties; nor did we consider strata-titled landed properties.
Buying a landed property is no small expense for most people; the supply of available landed properties is also limited. Generally speaking, shelling out over $3 million for a terrace house, close to $5 million for a semi-detached, and approximately $14 million for a bungalow is the expected price tag.
Location certainly has an impact on the prices of landed properties; those in the Outside Central Region (OCR) tend to be the most economical, while the Core Central Region (CCR) – the wealthiest part of Singapore – is home to the luxurious Good Class Bungalows (GCBs) and is consequently the most expensive.
Non-Singaporean Citizens or Permanent Residents Cannot Buy Landed Property in Singapore without Approval
If you are a foreigner, such as someone who is not a Singapore Citizen, Singapore company, Singapore limited liability partnership or Singapore society, you will need to obtain approval from the Controller of Residential Property in Singapore Land Authority (SLA) if you want to purchase a landed residential property in Singapore. Under the Residential Property Act, this is a restricted property type and so approval is necessary for all non-locals wishing to invest in such properties.
Aspiring property owners in Sentosa Cove must first seek approval from the Singapore Land Authority (SLA), despite the fact that foreign persons are allowed to buy landed property there. The SLA will assess each application based on criteria such as Permanent Residency in Singapore for a minimum of 5 years and an exceptional economic contribution to the country, including employment income which is taxable in Singapore.
You Can Use CPF And/ Or A Bank Loan
If you’re purchasing a landed property, you can leverage your CPF savings and take out a bank loan to finance the purchase. But keep in mind that to utilize your CPF funds, the remaining lease must be no less than 20 years and the amount is prorated depending on the age and lease of the property. For the maximum CPF contribution, make sure that the property’s remaining lease covers the youngest owner until they reach the age of 95.
If you haven’t already met the Basic Retirement Sum (BRS), the most CPF you can use towards buying a private residential property, such as a landed property, is limited to the purchase or valuation price – whichever is lower. However, if you have already met the BRS, you can use up to an extra 20% of the lower price.
When applying for a bank loan to purchase private property, the same loan-to-value (LTV) and total debt servicing ratio (TDSR) requirements apply. If you don’t have an existing loan, the most you can borrow is 75% with a minimum of 5% cash downpayment. Remember, the combined debt obligations including your mortgage must not exceed 60% of your gross monthly income.
Buyers of landed property must abide by the same buyer’s stamp duty, additional buyer’s stamp duty, and seller’s stamp duty as all other property purchasers.
Title Searches Are Important Before Buying Landed Property
When purchasing a landed property, there are certain factors to take into account that are not applicable to HDB flats or condominiums; namely the land itself and the possible easements and covenants attached to it. An easement, for instance, might allow a right of way to be granted to another property, meaning certain areas of your land could not be built upon without permission.
It’s essential to understand the boundaries of your land title to ensure you don’t trespass onto someone else’s property or public land. Though most land titles don’t come with any easements or covenants, it’s always wise to enlist the help of an experienced lawyer to conduct a thorough due diligence, to make sure you don’t encounter any unexpected issues.
Filing a Caveat for Landed Property is completely optional
URA states that Caveats are legal records lodged with the Singapore Land Authority by purchasers in order to document their legal rights in the property. Generally, Caveats are registered after a purchase option has been executed or a Sales and Purchase contract has been signed.
It is not compulsory to lodge a caveat with the Singapore Land Authority, meaning that certain property transactions may remain unknown to the URA’s Private Residential Property Transactions. Yet, it is highly recommended for buyers to lodge a caveat, as it safeguards their interests. If there are multiple claims to a property, the time of lodgement of the caveat will determine who is the rightful owner. As a rule of thumb, this step is usually taken by the lawyer in the conveyancing process.
You May Also Like …
The Top 5 Legal Considerations When Investing In A Property In Singapore
Investing in property in Singapore is an attractive option for many, given the country's stable economy and strong demand for...
Read More
Are We Truly Headed For A Slowdown? How Will This Affect Property Prices?
TLDR The pandemic-induced recession has surprisingly boosted property prices in Singapore, defying conventional economic trends. Factors like cost-push inflation, limited...
Read More
Top 5 : Benefits of Investing in Older vs. Newer Singapore Property Market Condos for International Buyers?
Singapore's property market has long been an attractive investment destination for international buyers, offering a stable and well-regulated environment with...
Read More
5 Singapore Property Trends to Watch in 2023: Expert Weigh In
5 Singapore Property Trends to Watch in 2023: Expert Weigh In Top 5 Singapore Property Trends to Watch in 2023...
Read More
Top 5 Bookstores in Singapore for Book Lovers
Singapore, a bustling cosmopolitan city, is known for its rich cultural heritage, diverse population, and of course, its love for...
Read More
Top 5 Secrets : Foreign Investors Are Rarely Told About Singapore’s Real Estate Market
Singapore's real estate market has been a popular choice for foreign investors due to its stable economy, strategic location, and...
Read More
5 Cons of Buying a New Development
Luxury properties in Districts 9 and 10 of Singapore are highly coveted, and for good reason. From stunning views and...
Read More
Is Singapore’s Property Market on the Verge of a Crash? Understanding the 5 Factors at Play
The Singapore property market has long been an attractive option for both local and international investors. However, as with any...
Read More
35 Brand New Condominiums Nearing Their ABSD Deadline 2023
TLDR The blog post discusses the looming ABSD deadline for several new launch condos in 2023, highlighting the impact on...
Read More
Don’t Get Scammed: The Top 5 Red Flags To Watch Out For In Singapore’s Property Market
Don't Get Scammed: The Top 5 Red Flags To Watch Out For In Singapore's Property Market When it comes to...
Read More
What Hidden Costs Are There When Selling Your House?
TLDR When selling your house, be prepared to cover expenses such as outstanding home loans, legal fees, property agent commissions,...
Read More
Top 5 Reasons Why Singapore’s Property Market Is A Haven For High Net Worth Investors
Singapore's property market has long been a magnet for high net worth investors, both local and international. The city-state's strategic...
Read More
Top 5 Seafood Restaurants in Singapore
Singapore, a melting pot of cultures and culinary delights, is well-known for its diverse food scene. With its strategic location...
Read More
My 6 Factors to Consider When Buying a Property in 2023
As the housing market shows no signs of slowing down, many of us may feel left behind, questioning whether it...
Read More
Top 5 : Factors Influence Real Estate Investors’ Decisions when Investing in Singapore Condos?
Singapore's real estate market has always been an attractive investment option for both local and foreign investors. The city-state's stable...
Read More
Top 5 Tips for First-Time Chinese Buyers Looking to Invest in Singapore Today
Top 5 Tips for First-Time Chinese Buyers Looking to Invest in Singapore Today Here are the top 5 tips for...
Read More
Top 5 Tips : How Does One Choose Good Property In Singapore?
Singapore, a thriving city-state known for its impressive skyline and robust economy, has always been an attractive destination for property...
Read More
5 Tips for Renting Property in Singapore
Renting property in Singapore can be a challenging task, especially for those who are new to the country. With Singapore's...
Read More
Finding Your Dream Home In The Near Future. Exciting Upcoming Property Launches In The First Half Of 2024
TLDR The real estate sector in 2023 saw significant policy shifts affecting both private and public housing, with various changes...
Read More
