What to Take Note When Buying Singapore Properties

Buying property in Singapore is a significant decision, whether you’re a first-time homebuyer, an upgrader, or an investor. Singapore’s real estate market is well-regulated and highly structured, but navigating it requires careful planning and understanding of the legal, financial, and policy frameworks in place.

This article outlines everything you need to take note of when buying Singapore properties — from eligibility and financing to legal obligations and future considerations.

1. Understand the Property Types

In Singapore, properties are broadly classified into:

  • HDB Flats – Public housing developed by the Housing and Development Board for Singaporeans.
  • Executive Condominiums (ECs) – Hybrid public-private housing with ownership restrictions in the first 10 years.
  • Private Condominiums – Gated communities with shared facilities, available to both locals and foreigners.
  • Landed Properties – Terrace houses, semi-detached houses, and bungalows. Foreign ownership is restricted unless approval is granted.
  • Commercial and Industrial Properties – For business use; ownership rules differ from residential.

Know which type suits your budget, eligibility, and investment goals. Foreigners, for example, cannot buy HDB flats or landed homes without special permission.

2. Eligibility and Ownership Restrictions

Depending on your residency status, your property choices may be limited.

For Singapore Citizens:

  • Can buy HDB flats, ECs, private condos, and landed properties.
  • Eligible for housing grants and CPF usage.

For Singapore Permanent Residents (PRs):

  • Can buy resale HDB flats (with another PR or Singapore Citizen), ECs (after 5 years), and private properties.
  • No new HDB flats or landed properties unless granted special approval.

For Foreigners:

  • Can buy private condominiums freely.
  • Must pay Additional Buyer’s Stamp Duty (ABSD).
  • Need Land Dealings (Approval) Unit permission to purchase landed property (rarely granted).

3. Stamp Duties and Taxes

Buyer’s Stamp Duty (BSD):

All property buyers pay BSD, calculated based on the purchase price or market value (whichever is higher).

Additional Buyer’s Stamp Duty (ABSD):

  • Singaporeans: 0% for first property, 20% for second, 30% for third and beyond.
  • PRs: 5% for first, 30% for second and beyond.
  • Foreigners: 60% flat rate (as of April 2023).
  • Entities/Companies: 65% flat rate.

Stamp duties must be factored into your budget early. ABSD alone can significantly increase acquisition costs, especially for foreign buyers and investors.

4. Loan Restrictions and TDSR Framework

Singapore applies prudential lending rules to ensure buyers don’t over-borrow.

  • Loan-to-Value (LTV) Limits: The maximum amount a buyer can borrow depends on the number of outstanding mortgages and the loan tenure.
  • Total Debt Servicing Ratio (TDSR): Capped at 55% of the borrower’s monthly income. All debt obligations — including car loans, credit cards, and other mortgages — are included.
  • Mortgage Servicing Ratio (MSR): Applies only to HDB and EC purchases, capped at 30% of the borrower’s gross monthly income.

These regulations encourage financial prudence and must be understood thoroughly when planning your financing.

5. Use of CPF for Property Purchase

Singapore Citizens and PRs can use their CPF Ordinary Account (OA) savings to pay for:

  • Down payment
  • Monthly mortgage installments
  • Legal fees and stamp duties

However, there are limits to how much CPF can be used, especially if the lease of the property does not cover the buyer until age 95. CPF Withdrawal Limits and Valuation Limits may also apply.

6. Lease Tenure and Remaining Lease

Property in Singapore is either:

  • Freehold
  • 999-year leasehold
  • 99-year leasehold

For HDB flats and many condominiums, the 99-year lease is standard. It is critical to check the remaining lease of the property, as financing, CPF usage, and resale potential can be affected.

Properties with less than 60 years remaining lease may face restrictions in financing and CPF use, and those with under 30 years remaining may be unattractive to buyers.

7. Financial Planning and Hidden Costs

When buying property, many costs go beyond the purchase price. Some important items to include:

  • Stamp duties (BSD and ABSD)
  • Legal fees (~$2,500–$3,000)
  • Property tax
  • Renovation and furnishing
  • Maintenance fees (for condominiums)
  • Agent’s commission (typically paid by the seller for resale homes)

It is wise to engage a mortgage advisor or financial planner to ensure you don’t overstretch your finances.

8. New Launch vs Resale Properties

New Launches:

  • Usually come with developer warranties.
  • Progress payment scheme via loan disbursements in stages.
  • Require waiting time (2–3 years for completion).

Resale Properties:

  • Ready for immediate occupation or rental.
  • Price may be negotiable.
  • Can physically inspect the unit.

Each has pros and cons. Investors may prefer new launches for capital appreciation, while own-stay buyers might prefer resale units for faster occupancy.

9. Location and Accessibility

Location plays a crucial role in determining both the resale value and rental potential of a property. Key factors to consider:

  • Proximity to MRT stations
  • Nearby schools (especially popular primary schools)
  • Access to expressways
  • Surrounding amenities like malls, parks, and hospitals
  • Upcoming developments (check URA Master Plan)

Properties in mature estates or near transportation hubs tend to hold value better and attract tenants more easily.

10. Legal Checks and Due Diligence

Before signing the Option to Purchase (OTP), conduct legal due diligence. For resale properties, ensure:

  • There are no encumbrances or caveats lodged
  • Seller has legal right to sell
  • No ongoing bankruptcy or divorce proceedings that affect the sale

Engage a licensed conveyancing lawyer to verify ownership and guide you through the entire transaction.

11. Tenancy and Rental Considerations

For investment purposes, consider:

  • Rental yield (annual rental income ÷ purchase price)
  • Target tenant demographics (expats, students, families)
  • Tenancy agreements and landlord obligations

Buying in areas with high rental demand (CBD, city fringe, near business parks or international schools) can provide stable rental returns.

12. Future Exit Strategy

Consider how easy it will be to resell the property. Some key points:

  • Avoid units with odd layouts or undesirable facings.
  • Check future URA developments that could affect the area’s attractiveness.
  • Be aware of Seller’s Stamp Duty (SSD): Payable if you sell within 3 years of purchase (up to 12%).

Your property should appeal to future buyers, not just suit your current needs.

Conclusion

Buying a property in Singapore is more than just picking a home or investment unit—it’s about understanding a structured ecosystem of rules, costs, and long-term financial impact. Whether you’re a first-time buyer or a seasoned investor, staying informed and doing your due diligence are critical to making a wise purchase.

With the right research, planning, and professional advice, owning a property in Singapore can be one of the most rewarding and stable investments you make.

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