Singapore

Why Singapore’s Real Estate Remains Popular To Foreign Investors

As you can tell from the video below, due to changes around the world, and Asia Pacific, or uncertainty in Hong Kong in particular, Singapore remains and is even growing as a safe haven for rich immigrants to live in as well as do business and invest in. You can easily look for permanent residence application help with Dream Immigration SG.

However, despite the attractiveness and stability of Singapore, the real estate prices in Singapore is among the top three priciest places in the entire world, and there are also additional buyers’ stamp duties for foreigners, which is lower for citizens and permanent residents. In fact, that is also one of the reasons why some rich and notable immigrants to Singapore become a Singapore PR to avoid these unnecessary taxes legally. You will be surprised with how much you can save on ABSD taxes by becoming a Singapore PR first. You too, can become a Singapore PR to make use of this by applying ePR online, or you can also get help with applying for permanent residence for expats from a professional immigration agency in Singapore.

There are some countries, such as Switzerland, which have agreements with Singapore, which allows their citizens and permanent residents to not need to pay the ABSD when investing or buying Singapore’s real estate. If you belong to one of these rare few countries, then you can benefit from this. Otherwise, no big deal, just become a Singapore PR and reap all the benefits that it provides!

While ridiculous capital gains growth from investing in Singapore’s real estate is less likely nowadays due to the cooling measures by the local government as well as overall smarter market sentiment, if you look at the deals carefully, there are still good deals with stable prices you can get into.

Additionally, living in Singapore is also a great way to grow your wealth, as it also has very pro business policies and decently low taxes, and stable real estate is just icing on the cake! While direct capital gains from property may not be reaped as easily, it is still possible, and you also most definitely can reap tons of profits from doing business from Singapore and targeting the Asia Pacific region from here and run your headquarters here. In fact, billionaire entrepreneurs like James Dyson is also doing exactly so!

Getting A Singapore PR To Invest In Real Estate – Worth It?

Is it worth your hassle to go through a SG PR application, become a Singapore permanent resident to make use of the tax breaks to invest more efficiently in Singapore’s real estate? Let us find out!

Comparison in costs or taxes when it comes to property purchase for foreigners versus Singapore permanent residents

When it comes to foreigners, which you probably are right now, you will be required to pay additional buyer stamp duty (ABSD) of 20% for any residential property you purchase. This applies even for your first property purchase in Singapore.

Foreigner stamp duties in Singapore

Keeping in mind that foreigners can only purchase private condos, these usually cost at least around $700,000 for a one bedroom condo. 20% ABSD on that is a whopping $140,000!

Singapore PR stamp duties

For permanent residents, the first residential property you will be required to pay 5% for ABSD, and subsequently it will be 15%.

Taking into account the same $700,000 condo, that will be $35,000 and $105,000 respectively.

Differences laid out side by side

For your first property, you will be saving $105,000 in unnecessary property taxes!

Even if you wish to use an immigration agency or consultant to help you become a permanent resident, that usually only costs around $4000 to $20,000. Even if you tried 3 different agencies before you can apply for a Singapore PR status successfully, it will still save you lots of money!

If you are an investor and purchase $7 million worth of residential properties in Singapore, you will be able to save $420,000 simply if you are a permanent resident.

Small disclaimer here

Of course, there are other ways you can go about circumventing this law using legal loopholes, but you are advised to look for a lawyer here for trust incorporations or purchases under companies instead. But here, we will talk purely about foreigners purchasing versus Singapore permanent residents and for residential properties only.

Check the exact amount of stamp duty you need here

For the exact amount that you require to pay when it comes to stamp duties, you can refer to the IRAS website here and use their provided stamp duty calculator.

Conclusion as to whether you should become a Singapore PR for property investment in SG

Of course, a Singapore PR lots of other benefits financially as well, such as the lack of capital gains and death taxes in Singapore, and if those are also of interest to you on top of saving on property tax, then you should consider being a permanent resident in Singapore! After all, there is a reason why many wealthy people migrate to Singapore and get a Singapore PR status!

Another additional benefit of a Singapore permanent residence, instead of a Singaporean citizenship, is that it still affords you the luxury and choice of easily giving it up in future if you ever wish to change your mind, and it is way less complicated to process that reversal too even if ever required.

Can Foreigners Buy Property In Singapore?

The short answer is yes, foreigners CAN buy property in Singapore, albeit with restrictions.

What or who is considered a foreigner in the first place?

First of all, let us discuss when you or an entity is considered a foreigner. Basically, anybody who is not a Singaporean citizen, not a Singapore permanent resident or a corporate entity not incorporated within the Republic of Singapore is considered a foreigner when it comes to buying property in Singapore.

As you can possibly already tell, one of the legal loopholes to classify yourself as a local can be as simple as incorporating a private fund or company in Singapore, or just becoming a permanent resident in Singapore. Due to the legal complexities of this matter, you are advised to seek a local lawyer or PR application immigration consultant like Dream Immigration SG if you wish to make use of such legal loopholes to make big property investments in Singapore or getting a Singapore PR application approved. However, you may have noticed that some immigrant consultants boast about their PR application pass rates while others not as much – regarding this matter, you may want to get a better read on this topic before contacting any permanent residence agency.

Residential versus commercial property in Singapore

In general, commercial properties have far fewer to no restrictions when it comes to purchases in Singapore. Additionally, the Additional Buyers Stamp Duty (ABSD) is not applicable on foreigners or foreign entities who purchase an office building for instance.

On the other hand, residential property in Singapore can have far more restrictions relatively if you are a foreigner looking to purchase property in Singapore, and may sometimes also face more taxes.

Since most people asking this question are actually considering buying residential properties in Singapore, we will only talk about that here.

Restrictions on residential property purchases by foreigners in Singapore

Let us first start from the type of housing that has the greatest amount of restrictions and regulations for foreign purchasers. The following is in descending order of difficulty for foreign buyers to purchase when it comes to property in Singapore.

Housing and Development Board public flats (Fully restricted)

These are public flats in Singapore, and only Singaporeans and Singapore PR are able to purchase these flats, and even so, there is a maximum of one purchase per married couple. Therefore, as a foreigner, you are unlikely to be even looking at this option.

Landed residential properties

Good class bungalows (Fully restricted)

These are plots of residential properties of at least 15,070 sq ft in land size and in designated areas. These are only available for purchase by locals.

Most other landed housing in SG (Need manual approval through Singapore Land Authority)

When it comes to landed properties such as terrace houses, cluster landed houses, semi-detached houses and bungalows, approvals will be required. If you are intending to get and buy such a property in Singapore as a foreigner, you will need to get manual approval via the Singapore Land Authority.

There are namely two ways you can get approval in this situation.

First method would be you going through a Singapore PR application process and become a permanent resident.

The second method will be proving your economic contribution to the Republic of Singapore. This is largely based on your taxes, which is based on your applicable assessed income in Singapore.

Condominiums

In Singapore, there are two types of condos – one is known as an executive condominium, while the other is simply known as a private condo.

Executive condos (Only those 10 years and older can be purchased)

An executive condo in Singapore is a subsidized, half public condo. As a result of this, only Singaporeans can buy them first hand. Even permanent residents can only buy it 5 years after the condo has finished its development. Foreign buyers are only able to get those which at at least 10 full years old. Even then, there is only a maximum of one per married couple that is allowed to be owned by all.

If one already has a HDB flat, he or she needs to sell it to get an executive condo, and vice versa.

All government related and subsidized properties are heavy regulated and the maximum that each person can get is one of them.

Private condos (Zero restrictions)

These are truly private properties and any foreigner can buy them. Additionally, you can buy as many as you want regardless whether you are a local or a foreigner.

This is the easiest type of property that foreigners can buy in Singapore. It is also why most foreigners in SG actually live in private condominiums around the country too.