Buying a property as an expat in Singapore was a surprisingly seamless process for Ivy and Andrew, who hail from NYC, but there are still some important things you need to know ...
Whether you’re new to Singapore or a seasoned expat, buying property in your adopted home is actually much easier than imagined, and, in some cases, a smart financial decision. (Rental shock, anyone?) We spoke to an expat couple from New York, Ivy Esquero and Andrew Baisley, both on EPs, who along with their Singapore-born toddler, Kai, recently bought their first home in the trendy neighbourhood of Tiong Bahru.
These New Yorkers were ready to buy a family home, and chose the Little Red Dot over The Big Apple due to how easy it would be to manage their property from abroad should they move again. “A New York apartment is far too difficult to manage from afar, unlike a Singapore pad,” says Andrew. “I know it’s so cliche to say Singapore makes things efficient, but from the bank loan approval process to the legal documents, everything was on time and efficient. We know people back in the US who are going through the same process, and we never experienced the frustrations they had with the banks or inspections. Here, it felt more transparent and pro-buyer. Everyone, from our banker to our broker, was on WhatsApp so it felt like information was constantly flowing. In some ways, there was probably some doubt in the back of our heads about the process being legit, because it felt almost too easy. I expected some sort of surprise reveal along the way of some problem or some snag with paperwork, but it never happened. The hardest part was probably making time to see the properties with a 10 month old (at the time) who was still on two naps and our working schedules. It required a lot of patience from our broker.”
Thinking of putting down roots in your adopted home too? Here’s what you need to know…
Where to start: how to find an agent and a property in Singapore
Pound the pavement (or MRT platform) and narrow your property search to areas which fit your criteria. Online property sites such as Property Guru and 99.co have a large selection of properties, and agents to browse through. “We chose Tiong Bahru, as we’re currently renting there and love the area for its proximity to the city, to our work, its cafe and restaurant culture, history and awesome preservation of local culture,” say Andrew and Ivy. They recommend Asian Welcome, who helped them handle all aspects of their home buying search. The URA site will give you a good indication of recent property sale prices, as well as an indication of pending construction sites!
What can foreigners buy in Singapore? What’s off limits?
Only permanent Residents (PRs) and Singaporeans can buy HDBs (government subsidised housing), and only Singaporeans can buy the new Build-to-Order (BTO) HDBs. Here’s where you’ll find more information on buying HDBs.
Buying privately owned landed properties and condos
Foreigners are able to buy private properties – both condos and landed homes, however there are certain restrictions to buying landed properties, especially the historic Black and White houses. The Singapore Statutes Online site has comprehensive details of eligibility. In short, when you intend to buy, you may need to lodge an application via MOM – a simple online process.
Additional taxes for foreign buyers
Property in Singapore attracts a ‘Buyers Stamp Duty’ (BSD), aka ‘tax’, and foreigners are slugged with an Additional BSD (ABSD) of 15% of the property’s sale price. You’ll find more details on the IRAS site. It’s worth noting that Swiss and US nationals, amongst others, are exempt from the foreigners’ ABSD.
Tip: Ivy and Andrew applied for their tax to be calculated as owner-occupiers rather than investors, which brought their taxes down. Their application was easily lodged electronically with their Singpass login.
Freehold vs leasehold
Freehold is property owned outright (in perpetuity, #4eva). You can hold the lease on a Leasehold property for up to 99 years in Singapore, but, like Ivy and Andrew, who bought a 70 year property lease, you can buy into a lease at any time. Leasehold properties can be less costly and are usually closer to the CBD and MRT stations – making them a favourable option. New ‘en bloc’ regulations make it easy for leaseholders to profit from any property upgrades they make.
Andrew and Ivy say they ended up buying a leasehold as they loved the Tiong Bahru neighbourhood in which there are predominantly leaseholds, and felt that the rental/redevelopment market was much stronger for this particular property. “You also, at some point, have to prioritise living today,” says Ivy, “in the right apartment for your family, over some future investment outcome that may or may not materialise. Singapore is only 52 years old – if your leasehold has 70 years left on it, that’s a lot of time for many scenarios to play out. Very worst case is that you lose your investment, but if you amortise that cost over decades, it’s much less than you would have paid in rent.”
For any property, freehold or leasehold, thoroughly check all the terms and conditions around resale before jumping in.
Show me the money
Ivy and Andrew suggest you use a 23% rule of thumb to estimate the amount of cash you’ll need up front for condo purchases, excluding the 15% ABSD. That should cover the option to purchase (usually a three week upfront holding fee of 1%), option exercise (an additional 4%), downpayment (the remaining 15%), BSD, legal fees, valuation fees and fire insurance. Getting a home loan is relatively easy, you can either speak to your bank or shop around with or without a broker.
What else do we need to know?
Your bank or broker will usually recommend a legal consultant to sift through the paperwork – although the process is very easy here, the paper work is extensive. Ivy and Andrew recommend that you seek financial advice before buying to understand how buying in Singapore can or cannot work for you.
Both St James Wealth Management Asia and Catherine Werrett at AAM come highly recommended for expat financial advice. Asian Welcome, a relocation expert, is great for personalised property agent services, especially if you need some guidance on search criteria and neighbourhoods.
The content contained in this article is not intended to, and does not constitute, legal or financial advice. Your use of the information on this page, or materials linked from this page should be under the guidance of your own financial and legal advisor.
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