This is something that touch almost everyone living in Singapore, whether you are owning or renting a residential house or commercial properties. In particular for non-singaporean, knowing the tax-rule in singapore is a must to decide the options you have.
- Residential properties – All foreigners (including Singapore permanent resident) are prohibited from the following unless he obtains prior approval from the Land Dealings Approval Unit (LDAU):
- vacant residential land
- landed property
- landed property in strata development which are not approved condominium developments under the Planning Act
- 100% of any strata titled development
- lease of 7 years or more of any landed residential properties
- executive condominium less than 10 years old
- new HDB flat
- resales HDB Flat unless having Singapore permanent residents (SPR) status for at least three years
Only residential properties in Sentosa Cove district (Singapore properties rule introduced in Year 2014) may not be restricted though foreigner still need an approval from LDAU to own a unit here with (around 2 days turn-around quick approval).
Approval will be granted to the restricted properties on a case by case basis with the main criteria as followed:-
- permanent residents with Singapore at least for 5 years
- make exceptional economic contribution to Singapore
- possess professional qualification or experience that is valuable to Singapore
2. Commercial properties – general no restriction except for HDB shophouse with residential component will require enquiry with HDB regarding eligibility. The acquisition is for commercial reason and there is very little restriction for the purchase or rental of such properties. However do note the 18 classes of commercial properties and the authority may not allowed certain classes or impose a limit to operate the business in certain areas.
Before buying a residential or commercial properties, it is also imperative to check the taxes involved:- BSD, ABSD, SSD and/or GST as this may be a sizeable amount added to the total cost. Additional Buyer Stamp Duty (ABSD) introduced in Year 2013 which is only applicable to residential properties as shown below of the purchased price. Seller stamp duty (SSD) is only applicable to residential properties which ranges from 4% to 12% of purchased or market price (whichever is higher) during the first three years of ownership. So do check with your property consultant or financial advisor before committing the purchase.
However under Free Trade Agreements( FTA), there is a ABSD remission for the following personnel: Nationals and Permanent Residents of Iceland, Liechtenstein, Norway or Switzerland and Nationals of the United States of America.