There is plenty to love about living in Singapore – from lush nature reserves to a world-class dining scene, this metropolis is buzzing with heaps of things to see and do. The city is being touted as the one of the world’s best city to live in – and for good reasons! With Singapore emerging as one of the fastest growing economies in Asia, the property market is heating up and there is a robust demand for both residential as well as commercial space. For those who are making their homes here for the very first time, an exciting new chapter awaits! Here are the things you need to know about buying a property in Singapore as a foreigner.
What can foreigners buy?
Unlike many other countries, owning a home in land-scarce Singapore is a bit of a luxury, and it is only when Singaporeans get married or turn 35 that they are eligible to buy their own home. A home is a long term investment, and this is especially so for young couples who have only been working for 3-5 years. For non-Singaporeans (foreigners), who want to make Singapore their home or to invest in property, there also a number of bureaucratic hurdles to jump over before you can get that key in your hand.
Essentially, there are two overarching types of properties in Singapore: residential and non-residential. The former can be restricted or non-restricted. These categories are generally demarcated based on the use, type and location of the property.
It is quite simple. If you have got cash, you can be a property owner in Singapore – but like everything else here, there are rules. Condominiums can be bought by foreigners without any problem, but for landed properties, cluster housing, bungalows and terraces, you will need to be a Permanent Resident (PR), and you will also need to contact the Singapore Land Authority (SLA) for approval under the Residential Property Act. All applications are to be submitted online at www.sla.gov.sg/ldau and each applicant is assessed on a case-by-case basis, taking into consideration, including but not limited to the following factors:
- You should be a permanent resident of Singapore for at least five years; and
- You must make exceptional economic contribution to Singapore. This is assessed taking into consideration factors such as your employment income assessable for tax in Singapore.
So, what types of property must a foreign person seek approval under the Residential Property Act to purchase?
- Vacant residential land
- Terrace house
- Semi-detached house
- Bungalow/detached house
- Strata landed house which is not within an approved condominium development under the Planning Act (e.g. townhouse or cluster house)
- Shophouse (for non-commercial use)
- Association premises
- Place of worship
- Worker’s dormitory/serviced apartments/boarding house (not registered under the provisions of the Hotels Act)
Here is the list of property types a foreign person can purchase without approval under the Residential Property Act:
- Condominium unit
- Flat unit
- Strata landed house in an approved condominium development
- A leasehold estate in a landed residential property for a term not exceeding 7 years, including any further term which may be granted by way of an option for renewal
- Shophouse (for commercial use)
- Industrial and commercial properties
- Hotel (registered under the provisions of the Hotels Acts)
- Executive condominium unit, HDB flat and HDB shophouse. For this category, you may wish to find out more information on HDB eligibility guidelines at hdb.gov.sg or email HDB at email@example.com.
The Steps: Property purchase in Singapore as a Foreigner
For foreigners looking to purchase a property in Singapore, there may be certain limitations to look out for. The Residential Property Act of 1973 regulates foreign possession of property, land, and housing. However, there are still steps you can take to purchase property in Singapore. These 9 steps can help make the property buying process manageable and help you make the best decisions possible.
Step 1: Start your research early
As soon as you can, start browsing websites, newspapers and magazines that have real estate listings. Make a note of particular properties you are interested in and see how long they stay on the market. Also, note any changes in asking prices. This will give you a sense of the property trends in specific areas.
Step 2: Determine how much you can afford
Lenders generally recommend that people look for properties that cost no more than three to five times their annual household income.
Step 3: Obtain an Approval In-Principle (AIP) from bank for your mortgage
Before you start looking for a property, you will need to know how much you can actually spend. The best way to do that is to get prequalified mortgage. An Approval In-Principle is also occasionally known as pre-approval or in-principle approval for loan. It is an informal non-binding agreement with a bank, on the amount you can borrow and the tenure. Knowing the amount that the bank is likely to grant you will help significantly in your financial planning and narrow down your options in choosing the right property that is within your budget and borrowing limits. To get prequalified mortgage, you just need to provide some financial information to your mortgage banker. Your lender will review this information and tell you how much they can lend you.
Step 4: Find the right real estate agent
Real estate agents are important partners when you’re buying or selling a property. Real estate agents can provide you with helpful information on properties and neighbourhoods which are not easily accessible to the public. Furthermore, their knowledge of the property buying process, negotiating skills, and familiarity with the area you want to settle in can be extremely valuable. And best of all, it does not cost you anything to use an agent! They are compensated from the commission paid by the seller of the property.
Step 5: Shop for your property and make an offer
Start touring properties in your price range. It might be helpful to take notes on all the properties you visit. For a sample checklist you can use during your visits, download here.
Another way to do it is by taking pictures or videos to help you remember each property because it will definitely be hard to remember everything about them especially when you will be visiting heaps of properties! On top of that, make sure to check out the little details of each house. For example:
- Test the plumbing by running shower to see how strong the water pressure is and how long it takes to get hot water
- Try the electrical system by turning switches on and off
- Open and close the windows and doors to see if they work properly
It is also pertinent to evaluate the neighbourhood and make a note of things such as:
- Are the other homes on the block well maintained?
- How much traffic does the street get?
- Is there enough street parking for your family and visitors?
- Is it conveniently located near places of interest to you: i.e., schools, shopping centres, restaurants, parks, and public transportation?
Take as much time as you need to find the right property. Then work with your real estate agent to negotiate a fair offer based on the value of comparable properties in the same neighbourhood. Once you and the seller have reached an agreement on a price, the property will go into escrow, which is the period of time it takes to complete all of the remaining steps in the property buying process.
Step 6: Get a property inspection
Typically, purchase offers are contingent on a home inspection of the property to check for signs of structural damage or things that may need fixing. Your real estate agent usually will help you arrange to have this inspection conducted within a few days of your offer being accepted by the seller. This contingency protects you by giving you a chance to renegotiate your offer or withdraw it without penalty if the inspection reveals significant material damage. You can then decide if you want the seller to fix anything on the property before closing the sale. Before the sale closes, you will have another walk-through of the property, which gives you the chance to confirm that any agreed-upon repairs have been made.
Step 7: Work with a mortgage banker to select your loan
Lenders have a wide range of competitively priced loan programmes and a reputation for exceptional customer service. Every property buyer has their own priorities when choosing a mortgage. Some are interested in keeping their monthly instalments as low as possible. Others are interested in making sure that their monthly payments never increase while others choose a loan based on the knowledge that they will be moving again in just a few years.
Step 8: Have the property appraised
Lenders will arrange for an appraiser to provide an independent estimate of the value of the property you are purchasing. The appraiser is a member of a third party company and is not directly associated with the lender. The appraisal will let all the parties involved know that you are paying a fair price.
Step 9: Completing the sale
There is a lot of paperwork involved in buying a property. At closing, you will sign all of the paperwork required to complete the purchase, including your loan documents. In Singapore, it takes around 10-12 weeks to complete the property buying process.
Before the buyer can proceed to apply for the Certificate of Title, the buyer will need to enter into a valid and binding real estate contract (drafted by a lawyer) in the form of Option to Purchase (OTP). The OTP is a right of option given by the seller of a property to an intending property buyer. Before purchasing the property, you will be required to place a deposit in the form of OTP. The OTP is typically 1% of the sale price to be paid to the seller at the point of receiving the agreement. The OTP will only last for 3 weeks. Within this time, the buyer must come up with the rest of the money for the property. 25% of the deposit will be forfeited should you choose to back out of the deal. Therefore, it is imperative that the buyer have an Approval-in-Principle (AIP) which is essentially a promise by a bank to loan you a certain sum if you were to buy the property within the decided timeframe. So, don’t forget to obtain the AIP from the bank before signing the OTP.
After signing the OTP, the buyer will enter into the Sale and Purchase Agreement. This involves the payment of a deposit, and setting the dates for fees such as the stamp duties. In the Sales & Purchase Agreement phase, the solicitor will embark upon the necessary steps to complete the sale such as coordinating with the bank for the mortgage and preparation of the contracts. As you can imagine, there is a lot of paperwork involved in buying a property. The entire process will typically take up to 10-12 weeks to complete.
The above image illustration should serve just as a guide.
Costs involved in a property purchase
If you want to purchase a property in Singapore, know that owning a property here comes with financial obligations you need to carefully consider before making the giant leap. It is important to review your current financial status and your existing obligations, loans, and monthly income before investing in a property. So, plan your finances before proceeding to buying a new property. Here is the breakdown of all the costs you will need to buy a property in Singapore.
1. Offer to Purchase
To secure the property you wish to purchase, the buyer has to pay the 1% of the property’s agreed price. Note that this fee is non-refundable and will be forfeited once the buyer decides to terminate the transaction. During this period, the buyer is given 3 weeks to consider about the property and during this time as well, the seller is not allowed to offer the property to other buyers.
2. Offer to Purchase
Some sellers can bypass the Option to Purchase by presenting buyers with a binding offer directly, known as the Offer to Purchase. This document is prepared by the solicitor or agent and will state the completion date, price and other conditions. The Offer-to-Purchase is normally 5% or 10% of the agreed purchase price. For those who have paid the Option-to-Purchase fee, the 1% payment will be automatically deducted from the total down payment.
3. Down Payment
The down payment needs to be paid in cash. Down payment may range from 10-20% depending on the seller. Additionally, the Option-to-Purchase and Offer-to-Purchase fees are deducted from the total down payment.
4. Buyer’s Stamp Duty (BSD)
BSD is tax paid on documents signed when you buy or acquire a property located in Singapore. Paying the BSD is important because in case of any disputes or problems with the acquisition of the property, only documents with paid stamp duty are considered admissible in the court. BSD is computed based on the purchase price or market value of the property, whichever is higher. With effect from 20 Feb 2018, there are differentiated BSD rates between residential and non-residential properties. The BSD rates are as follows:
5. Additional Buyer’s Stamp Duty (ABSD)
Liable buyers are required to pay ABSD on top of existing BSD. The ABSD rates as of 6 July 2018 are as follows:
6. Stamp Duty for Mortgage Documents
A mortgage is document where the interest in property is transferred from the borrower to the lender to secure the payment or repayment of money. In order to secure the mortgage documents, a tax rate of 0.4% (subject to a maximum of $500) needs to be paid to IRAS. Your conveyancing lawyer will assist you with this payment.
7. Conveyance Fees (Legal Fees)
Some fees are also required to be paid to a lawyer in order to carry out the necessary background checks on the property. The costs are around $2500 – $3000 when using a lawyer appointed by the bank. Private lawyers’ fees may vary.
8. Valuation Fees
Before the bank you have appointed releases the fund to finance your property purchase, they will request for a valuation of the property in order to qualify the loan. The fee varies between the type and value of property purchased and it usually costs between $200 to $500.
Unlike life insurance, home insurance protects assets that have a paper value. Home insurance provides coverage for the building, fixtures, fittings as well as renovations and your household content.
Mortgage insurance is a policy which insures the mortgage (home loan) in event of death of the breadwinner – it provides the surviving spouse with peace of mind, knowing the mortgage will be fully paid up.
Fire insurance compensates you for damage to the actual building which means the original structural elements of your home like the walls and electrical wiring as they were when you first moved in. Fire insurance generally does NOT protect the contents of your home such as furniture, appliances and personal belongings. It also does not protect your renovations.
So, what insurance is compulsory in Singapore? All HDB flat owners who are taking out HDB loan are automatically signed up to HDB fire insurance. If you are buying your private property with the help of a bank loan, it is likely that the bank lending you the money will require you to have a fire insurance policy naming them as the beneficiary. This type of policy is called Mortgagee Interest Policy. If anything happens to your property, the insurance pay-outs go to the bank. Condominium owners should be aware that your MCST or managing body of condominium also maintains a fire insurance policy on behalf of the entire condominium estate which means that you do not have to get your own fire insurance policy, but rather the Mortgagee Interest Policy. However, home insurance is never compulsory.
10. Property Agent Commission (Real Estate Salesperson Service Fee)
If you are engaging the service of a property agent, there may be a service fee or commission you need to pay to the property agent. For purchase of HDB, the commission is typically 1% of the purchase price. For purchase of private property, there are increasing trends that buyers do not pay the commission as they collect their fees from the seller (or seller’s agent). However, if their service is good, you may still reward them with commission, typically 1% of the purchase price. No fees are payable to the property agent for the purchase of property directly from the developers.
Loan-to-value (LTV) ratio or limit is the loan amount that Singapore mortgage banks and lenders will offer you based on your property value. Singapore citizens can borrow a maximum of 75% loan to value on residential properties whereas foreigners can borrow a maximum of 65% loan to value. So, do take account into the number of years that you can borrow and payment of monthly instalments, etc.
Stage of Property Development
Make your property purchase based on the stage of property development that is most sensible to you at the moment. The three available categories are: New Launch/Pre-launched, Recently TOP, and Resale Units. The following table gives a comparison to the pros and cons of purchasing each category.
Renting a property is similar around the world although there are of course some differences! These can be differences between properties, neighbourhoods or communities, towns or cities, states or countries. In a nation with 700km2 of territory, expats relocating to Singapore have to cope with a tough property market. But, with our guide, you will quickly get an insight into renting properties in Singapore as expats.
To start with, you should know in which part of the rather small island nation you want or need to live and the housing types in Singapore. While Singapore is usually divided into five regions for administrative or planning purposes (Central, East, North, North-East, and West), it is the 28 former postal districts that come in handy during the property search. They are still used by real estate agents or property websites to indicate the location of an apartment or a residential area. This section will provide you with a brief overview of residential areas for expats and the housing types in Singapore.
- Central Singapore: Districts 1 – 8, i.e., The Marina, the Central Business District (CBD), Central South, South Keppel, South West, City Hall, Beach Road, and Little India. These are the city’s most expensive areas with high-class condominiums.
- Districts 9 – 11, as well as 21 (Central West), are located to the north of Central Singapore, while 12 – 14 adjoin the central areas to the These districts are located quite near the CBD, Singapore’s prime shopping and entertainment facilities and luxurious residential estates.
- Districts 15 and 16 make up the East Coast division whereas District 17 and 18 make up Far East. Plenty of expats made home in these districts due to the proximity to the seaside that makes them particularly attractive. Changi International Airport is also located on this side of the island too.
- North East and Central North form the heartlands of Singapore (districts 19 and 20) while other postal code areas (districts 22 – 28) cover the outlying western, north-western, north-eastern, and eastern
- Public Housing (HDB): Government housing in Singapore usually comes with 1 to 5 rooms. They are generally clean, safe, and a lot better than most private apartments in other cities but they lack the more prestigious amenities that you can often find in condominiums. HDB units with 3 or more rooms can be rented out to foreigners.
- Condo/Condominium: Home to recreational facilities such as swimming pools, security, gyms and at times tennis courts, basketball pits, and well-maintained gardens. Condominiums are usually the go-to option for those who are looking for private housings yet find landed properties either too expensive or too much maintenance.
- Walkup: Any type of property which does not have a lift. Usually found in smaller, older blocks which come without facilities. Can also be used to refer to converted shophouses.
- Landed house: Essentially a house or bungalow with some surrounding land or garden.
- Cluster house: Combines the privacy and exclusivity of landed house with condominium facilities like a maintained swimming pool and gym.
- Shophouse: Heritage buildings which used to be shops on the ground floor with housing above. Most have been converted into wholly residential buildings.
- Black & white: Distinctive heritage buildings, similar to landed properties which dates back to Singapore’s colonial era.
Each tenant is different and they have their own set of needs and requirements. You will find in this section info graphic on tenant profile and housing types.
The Rental Timeline
Generally, if you are an expatriate or someone who is simply new to Singapore, you should start looking for your next home about 6 to 8 weeks prior to your intended move-in date. That way, you can comfortably do a neighbourhood search and see what different places in Singapore have to offer and which suits your lifestyle best. Furthermore, a house-hunt is unpredictable and you will occasionally find time-consuming hurdles in your path especially when your preferences or requirements are relatively stringent as you make best of Singapore as your new ‘home sweet home’. Usually, the time taken to find and conclude a house hunt is 5 weeks long. However, with the help of a professional agent, you will be able to conclude your house hunt in just a couple of weeks!
Week 1: Getting Started and Search
Do some read-up on the Singaporean rental market to formulate your requirements and expectation. By now, you would have a fairly good idea of what you are looking for. Time to go for a hunt! Filter your search based on your specific needs, wants and demands (location, distance to MRT, fully furnished, price range etc.) and make a shortlist of potential homes. Once your shortlist is ready, send out inquiries and you will receive feedbacks from landlords and agents to arrange a viewing with you.
Week 2: Viewing
Pictures may say a thousand words but they usually only depict half of the story. So, after you have scheduled viewings, go visit the places you had previously shortlisted and have it all sink in. Take your time, check the place out and ask the landlord or agent every question you have about the place. You may also bring a viewing checklist to help you to look out for things during a viewing in order to help you make an informed decision.
Week 3: Negotiating and Offering
Once you have decided on your prospective next home, it is time to negotiate the terms of the deal. As a rule of thumb, rental prices in Singapore are always negotiable and nothing is set in stone. After you have negotiated the general terms of a deal with the landlord or the representative agent, formalise the deal and move towards a contract. Write up a letter of intent (LOI) and pay the landlord a security deposit to secure your future home.
What is a Letter of Intent?
A Letter of Intent (LOI) is a letter stating your intentions to eventually venture into a Tenancy Agreement (TA) with the landlord in the respect to the agreed-upon unit. It serves as an intermediary step between the viewing/negotiating and the signing of the TA. Below states the significance of a LOI:
- Shows the landlord that you are serious in wanting to rent the unit.
- Aims to secure the unit. Once the LOI is signing, the landlord will cease to look for prospective tenants and exclusively look to closing the deal with you.
The LOI is accompanied with the transfer of a booking deposit (also known as a good faith deposit). This is mandatory and serves as a financial token to credibly back your intentions. The booking deposit generally amounts to one month’s rent for a one year lease and double for a two year lease. After the TA is signed, the booking deposit will become part of the security deposit or may serve as an advance rental fee.
The LOI should consist of the terms on which you shall rent your unit. Be sure to include all the clauses you intend to have into the TA is also in the LOI. The following list is to help you include the important things in your LOI and it is not exhaustive. Typically, the LOI should include (but not limited to) the following:
- TERM OF LEASE
- GOOD FAITH DEPOSIT (avoid paying the good faith deposit in cash because there is no way to trace or track it. Pay your good faith deposit with a cheque or via bank transfer directly to the landlord. These methods of payment are traceable and can help to avoid any dispute)
- SECURITY DEPOSIT
- DIPLOMATIC CLAUSE (If you are an expatriate renting in Singapore, it would be good to include a diplomatic clause in your LOI. This is a clause that will essentially exempts you from hefty penalties the landlord may impose on you should you were unexpectedly dismissed from your job in Singapore or transferred to another country on a short notice or need to quit your job in Singapore and return home. To prove that you’re not breaching the rental contract intentionally, you should show you landlord the official document(s) of your employment dismissal or country transfer)
- MONTHLY RENTAL AMOUNT
- LOI EXPIRY DATE
- ANY OTHER REQUIREMENTS
A template of LOI is included here for your perusal. It includes an extensive set of clauses which most LOIs would have and feel free to add on any additional clauses that will cater to your needs. If you have hired the service of a property agent, then fret not! Your agent will get it prepared for you.
How to do your own due diligence on the owner?
To make sure that you’re dealing with the real owner, you can validate his ownership online at www.iras.gov.sg . Pay only $2.50 for a peace of mind. Then you can politely request the landlord to show you his identification card and cross check it against the information you found on the e-validation service. Here are the steps:
- Go to iras.gov.sg
- Hover your mouse pointer on Property and click on “Find out Annual Values” under the Property Professionals section. You will then be rerouted to the “Find out Annual Values” page.
- Click on “Check Annual Value of Property” and fill in the required information, pay S$2.50 and voila!
Week 4: Signing
Next, the landlord will prepare a tenancy agreement which is the official lease contract and signing it marks the end of your house-hunt. Carefully scrutinise the Tenancy Agreement as this is a very important legal binding document that will benefit both landlords and tenants in helping to reduce potential risk of problems or disputes if any. If there are any clauses, caveats or arrangements you and the landlord are making it should be in there. A standard Tenancy Agreement should contain these specifications:
- Your contact details
- The landlord’s contact details
- The date when the monthly rent is due
- Penalties for late payment
- Mode of payment
- Monthly rental fee (including or excluding utilities)
- The amount of security deposit
- A property inventory
- Term of lease
- Termination clauses
- Diplomatic Clause and Reimbursement Clause (Early Termination of Lease)
- Minor Repair and Other Maintenance Clause
- Option to Renew Clause
- Access to Premises Clause
At this point, a security deposit needs to be paid to the landlord. The security deposit is generally worth one month’s pay per year leased and at the same time, it also serve as an insurance fund for the landlord in the case if you as the tenant damage the property. In Singapore, in addition to the monthly rent and security deposit, a tenant is also required to pay a tax (stamp duty) upon signing the tenancy agreement. The stamp duty is payable when a tenant rents the entire or part of a residential property or agrees to renew or extend the lease renting of entire apartments and rooms. The tenant may also request their agent (if applicable) to assist with the stamp duty if they are unfamiliar with the process (especially if you are a foreigner and not familiar with Singapore at all). The stamp duty is approximately between 0.4% and 1.6% depending on the term of the lease.
Week 5: Moving
Once the formalities have been settled (tenancy agreement signed, security deposit transferred, first month’s rent paid and keys changed hands), you can now move into your new place. Firstly, it is important to do a thorough inspection to ensure that everything has been sorted out as stipulated in the tenancy agreement. In most cases, the landlord will NOT provide the utilities. You will have to get your utilities sorted out 7 weeks prior to move in date to ensure there is electricity and water for the unit.
Week 6: Settling in
You have survived the home-hunt-renting process, so the hardest part is over. Take a deep breath and settle in! When settling into your new home, make sure you handle some post-rental musts like checking for defects around the home. Usually, any defects within the first 30 days upon move in, the landlord is liable to repair. So, do remember to check your new home thoroughly for defects (if any) such as bad plumbing, broken wall sockets, leaks and etc. before the 30 days are up to make good use of the 30 days liability period from move in date.
Quick Guide to Setting Up Utilities in Singapore
These are the list of documents required when you apply for utilities in Singapore:
Signing a utilities contract requires the applicant to pay a security deposit. Upon termination of your lease or selling of your house the security deposit can be used to pay for the final utility bills. Alternatively, it is refunded to you upon termination. The chart below shows the amount you’re required to pay:
Here is a list of ways to apply:
- Apply online via SP Service’s website at spgroup.com.sg
- Apply via SP Utilities smartphone app (available on the App Store (iOS) and Google Play (Android))
- Apply via telephone at 1800-2222 333
- Fax the completed application form to 6304-8229
- Apply via mail. Download the application form online at spgroup.com.sg/resouces and mail it to:
Senior Manager (Customer Service)
SP Services Ltd
10 Pasir Panjang Road #03-01 , Mapletree Business City, Singapore 117438
- Apply directly at a customer service centre. Remember to bring the required documents.
- 8 Cross Street #02-01/03, Manulife Tower, Singapore 048424
- 480 Lorong 6 Toa Payoh #02-08 HDB Hub, Singapore 310480
*Online, mobile and telephone application is only applicable for all of the existing premises where the address information already exists in the database. For new premises except for HDB residential apartments, condominiums and executive condominiums, you will need to either send in your application via post, fax or walk in to any of the above mentioned customer service centres to set up the utilities account.
Selling property can be daunting, more so if you are doing it for the first time. There are many decisions sellers are faced with throughout the entire selling process and a number of pitfalls to be aware of that could make the transaction long and unnecessarily laborious. There can also be a lot of uncertainty about how much it will cost you and how long it will take BUT the process doesn’t have to be stressful. Here is a quick overview of the various steps involved in selling a property.
- Deciding to sell
There is a checklist of things to do when selling your property, such as paying outstanding tax, terminating existing GIRO payments and submitting claims for tax refunds. On top of that, consider what is happening in the broader market and what is best for your situation. Decide if you are better off buying a new home before or after you sell your current home.
- Choosing an agent
Your agent will be in charge of advertising, showing and completing the legal requirements of selling your property, so choose carefully. Prospective agents will usually appraise your property and provide you with a comparative market analysis. Remember to check that the appointed agent is registered with the Council for Estate Agencies (CEA).
- Decide how you want to sell
You and your agent will work out a plan for listing and selling your property – whether you want to have weekend open homes or by appointment only.
- Determine your selling price and property inclusions
You may have your property evaluated by an expert who will assess its location, size, age and any extra features it has. Your agent will advise you on the current market and area trends.
- Sign an agreement with your agent
This legally binding contract will detail any commissions, the estimated sale price and etc. You may wish to seek independent legal advice to ensure you understand the terms and conditions of the agreement.
- Prepare the contract of sale
This will include all of the details prospective purchasers will need including details of the owners, title, all conditions of the sale and what is included in it (e.g. furnishings). Your solicitor or convenyancer will prepare this for you.
- Advertise your property
This involves photographing your property, drawing up floor plans and agreeing your marketing schedule. You can choose from a range of online ads to help drive more enquiries and a higher sale price.
- Going on the market
Prospective buyers will contact your agent and make an appointment to view your property or attend the open homes at the times you have agreed with your agent. First impression matters. So, make an effort to present your property in the best possible for a successful sale. Consider addressing any DIY jobs you have been meaning to get done, add a fresh coat of paint where necessary and try to de-clutter to make rooms appear larger.
- Sale and negotiation
Your agent will mediate between you and the buyer to reach a mutually acceptable price. Once you have accepted an offer, grant Option to Purchase (OTP) to the buyer in exchange for the 1% option fee of the negotiated selling price. Your convenyancer will begin preparing the final contract documents and the buyer will pay a deposit. During this period, the property is reserved exclusively for the buyer for a period of 14 days. The 1% option fee from the buyer will be forfeited if the OTP is not exercised within this valid period and the seller may keep the fee.
- Under contract
Once the seller has received the signed OTP and 4% exercise fee of the negotiated selling price from the buyer, the buyer and seller will then enter into a Sale and Purchase agreement (S&P). Buyer will usually receive the duplicate signed S&P agreement within 14 days of the exercise of the option. At this stage, the seller will have to pay Seller’s Stamp Duty (SSD) within 14 days of the exercise of the option. Before settlement, both seller and buyer’s lawyers and banks will work out the details of the sale to ensure both parties meet all legal and financial requirements.
SELLER’S STAMP DUTY (SSD) is payable on all residential properties and residential lands that are bought on or after 20 Feb 2010 and sold within the holding period. SSD is computed by applying the requisite SSD rate on the higher selling price or the market value of the property as at the date of sale. If parts of the property was acquired by the vendor at different times, the holding period for each part acquired will be computed from the respective acquisition date whereas if the sale comprises only a partial interest in the residential property, SSD payable will be based on the higher selling price or market value of the partial interest. Stamp Duty can be paid by cash, cheque, cashier’s order, NETS/Cashcard, eNETS or GIRO. There is NO instalment payment for Stamp Duty. It must be paid full. Those who have made a property purchase before June 2014 need not worry about SSD anymore. As of date of writing, July 2018, the rates of SSD payable on residential property purchased on and after 14 Jan 2011 and sold within certain duration are as below.
*Where land is sold with existing building, the liability for SSD will be based on the zoning of the land in the Master Plan.
*SSD payable to be rounded down to the nearest dollar.
*For shophouses with a portion permitted for residential use or HDB shop with living quarters, SSD is payable on the value of the residential component if the property is sold within the holding period.
EXEMPTIONS FROM SSD for Residential Properties under the Stamp Duties act under the following scenarios (No application to Commissioner of Stamp Duties is required for the sellers or transferors):
- Licensed housing developers who are governed under the Housing Developers (Control and Licensing) Act need not pay SSD when selling residential properties developed by them.
- Public authorities (e.g. HDB ad JTC) in exercising their functions and duties need not pay SSD when selling residential properties.
- Residential property owners need not pay SSD when their properties are acquired by the Government under the Land Acquisitions Act.
- Individuals who own residential properties need not pay SSD if they have been adjudged a bankrupt and are required to dispose of their residential properties as a result of bankruptcy.
- Companies that own residential properties need not pay SSD when disposing of their residential properties upon involuntary winding up.
- Foreigners need not pay SSD when they have to sell their residential properties as required under the Residential Properties Act.
- For HDB flat sellers or transferors who bought or acquired their flats on or after 30 Aug 2010 and their flats have been identified for Selective En Bloc Redevelopment Scheme (SERS) but sell their flats in the open market before HDB claims them.
- HDB flat sellers or transferors who return their flats to HDB as a result of re-possession by HDB or under the SERS.
- A person, who owns an HDB flat, inherits and HDB flat is required under the HDB’s regulations to dispose of either the inherited HDB flat or the existing HDB flat. This exemption applies to disposal of flats on or after 18 Dec 2015.
- A person who owns a non-HDB flat inherits an HDB flat is required under the HDB’s regulations to dispose of the inherited HDB flat. This exemption applies to disposal of flats on or after 18 Dec 2015.
- A person who owns an HDB flat marries a person who owns another HDB flat and the couple is required under the HDB regulations to dispose of either one of the HDB flats. This exemption applies to disposal of flats on or after 18 Dec 2015.
11. Settlement Day
All going to plan, you’ll relinquish the keys and legal rights to your property in exchange for the balance of payment from the buyer or their bank. You will have then sold your home. The scheduled completion date is stated in the S&P agreement and if the sale is not completed by the scheduled date due solely to the default of one party, the other party shall be entitled to payment of “Late Completion Interest” as liquidated damages as stated in Condition 9 of the Conditions of Sale 2012.