- Foreigners need prior approval from the Minister to buy any commercial and residential property that is not non-restricted residential property in Singapore.
- Non-restricted residential property includes flats, condominium units, hotels, and commercial buildings with less than 40% of dwelling units.
- The approval is granted or refused at the discretion of the Minister and may come with conditions such as personal occupation, disposal of other properties, completion of construction, and payment of additional stamp duty.
- Foreigners who buy or acquire residential property without approval or breach any conditions commit an offense and face penalties such as fines, imprisonment, disposal order, and confiscation of benefits.
Singapore is a small but prosperous city-state that attracts many foreigners who want to live, work, or invest here. However, not all types of properties are open for purchase by foreigners in Singapore. In fact, there are strict rules and regulations that govern the ownership of residential properties by foreign persons, which include individuals, companies, limited liability partnerships, and societies that are not citizens or approved purchasers of Singapore.
One of the main laws that restrict the purchase or transfer of residential properties to foreigners is the Residential Property Act 1976, which was enacted to ensure that residential land and housing are primarily available for the occupation and use of Singapore citizens and approved purchasers. The Act defines residential property as any house, building, or land that is used or intended to be used for human habitation, except for those that are specified as non-restricted residential property by the Minister.
Non-restricted residential property includes:
- Any flat in a building of 6 levels or more (including the first level), which is not a condominium development;
- Any unit in a condominium development;
- Any leasehold estate in a landed property in an approved condominium development;
- Any hotel registered under the Hotels Act;
- Any commercial building that has one or more dwelling units within it, provided that the total floor area of all the dwelling units does not exceed 40% of the total floor area of the building; and
- Any other property declared by the Minister by notification in the Gazette to be non-restricted residential property.
On 20 July 2023, 0000 hours, some refinements were made to the Schedule of Non-Residential Properties under the Residential Property Act . These refinements aim to better reflect current land use planning policies and practices, as well as to provide greater clarity and certainty for foreign persons who wish to purchase or acquire interests in non-residential properties in Singapore.
The refinements include:
- The ‘Commercial & Residential’ zone will be removed from the list of land use zones that have been designated as non-residential property. As land zoned or developments permitted for ‘Commercial & Residential’ are predominantly for residential use, such developments will now be deemed as residential property and regulated under the RPA. This is to better reflect the intent of the RPA to safeguard residential land for Singaporeans.
- Clarifying that foreign persons who intend to purchase or acquire an interest in land zoned or property permitted for “Commercial & Residential” use will need to apply for approval under the Residential Property Act. This is because such land or property may be used wholly or partly for residential purposes.
- Providing two exemptions for foreign persons who fall under the following categories :
- Foreign persons who are trustees of a specified trust, where the beneficiaries of the trust are all citizens or approved purchasers; and
- Foreign persons who are nominees of a company, where the shareholders and directors of the company are all citizens or approved purchasers.
Foreigners who wish to purchase or acquire any residential property that is not non-restricted residential property must obtain prior approval from the Minister through the Controller of Residential Property. The application for approval must be made in the prescribed form and accompanied by the prescribed fee and documents. The Minister may grant or refuse the approval at his discretion, and may impose any conditions as he thinks fit. Some of the common conditions include:
- The foreign person must dispose of any other residential property owned by him in Singapore within a specified period;
- The foreign person must occupy the residential property personally and not rent it out;
- The foreign person must complete the construction of any dwelling house on the residential land within a specified period; and
- The foreign person must pay an additional buyer’s stamp duty (ABSD) of 20% on top of the existing buyer’s stamp duty (BSD) for the purchase or acquisition of the residential property.
Therefore, foreigners who are interested in buying properties in Singapore should be aware of the legal requirements and implications under the Residential Property Act. They should also consult a professional real estate agent or lawyer before making any decision. Buying a property in Singapore can be a rewarding investment, but only if done legally and prudently.
