Understanding Singapore Real Estate… Explained for Newbies | SG Property 101

Here’s a Real Estate beginner crash course to understand how real estate works in Singapore. The basics, what you need to consider before buying a property and the ridiculous numbers behind owning them. Enjoy!

SG real estate is separated into public housing and private housing. 80% of the entire Singapore population live in public housing called HDB flats or Executive Condominiums and the other 20% live in private housing which could mean a condominium or a landed home like clustered homes, terraces, semi-detached and bungalow.

All public housing has a leasehold of 99 years while private housing has 3 leaseholds: 99-years, 999-years and freehold.

To qualify for a BTO (new construction flat from HDB)… you have to be a Singaporean citizen or your spouse has to be one and you’ll have to apply together with your fiancé. Both of your combined salary can’t exceed the income ceiling of $7000-$14000 SGD a month depending on the size of the flat you’re applying for. If you want to get an HDB flat as a single person, you have to wait until you’re 35.

How much you have to pay for real estate in Singapore are determined by 3 main factors:
1. Public housing or private housing?
2. Tenure: freehold or leasehold?
3. Location, location & location!

You’ll also have to pay closing costs also known as conveyance fees. If you’re buying a new HDB flat, you can use the HDB legal fee calculator to calculate the fees you’ll have to pay. It’s not too bad compared to what you have to pay buying private housing.

If you’re a Singaporean buying a private property, for your first property you’ll have to pay a legal service fee called stamp duty of about 1-3% if you’re buying a property below $1m and if you’re buying a property over $1m, you’ll have to pay 4% on the remaining amount exceeding $1m of your property price.

If you’re not a citizen but you are a Singapore permanent resident or PR, you have to pay an additional 5% on your first property in Singapore and an additional 15% if you’re buying your second and subsequent property.

If you’re a foreigner, you can’t purchase HDBs in Singapore but you can purchase both freehold and leasehold private condos and you just need to pay an Additional Buyer’s Stamp Duty (ABSD) of… wait for it… 20%! – It doesn’t matter if it’s your first, 4th or 10th property, you just have to pay the extra 20% each and every time.

The main reason why the stamp duties are so high for foreigners is to deter foreign investors from buying up too much real estate in Singapore and not having enough inventory for Singaporeans which would then drive the real estate prices even higher and making them less affordable.

Despite it all, I still believe that owning real estate is one of the best wealth generators out there. It allows you to take advantage of leverage and having someone else pay your debt for you, if you take on a mortgage. And after 30 years you’ll be generating 100% passive income… even while you sleep. This is how you can retire comfortably.

STASHAWAY: Get 50% off StashAway fee for 6 months up to the first $50,000 invested! That means you’re only paying about 0.35%-0.4% for expense ratio/management fees for the first 6 months!

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For business inquiries or one-on-one business consulting, real estate investing, or personal coaching, hit me up at moneywitheumi@gmail.com

#Singapore #SingaporeRealEstate #PropertyGuru