Foreigner Buying Property In Singapore? Mortgage & Tax Rates

According to the UBS Global Real Estate Bubble Index 2023 report, housing market in Singapore is currently classified as “fairly valued” compared to many other major cities in the world despite the government’s cooling measures. All this and much more – no wonder buying a piece in Singapore’s real estate market seems to be a smart choice for non-Singaporeans (or foreigners).

If you are moving to Singapore for a long term, then buying a home there might make sense. However, like most countries, Singapore does play favourites with its citizens. It favours its citizens by imposing certain rules and restrictions on what properties foreigners can and cannot buy in Singapore.

But foreign property buyers should not find this a deterrent. Despite being a foreigner, there are still plenty of opportunities for them to buy a property in Singapore.

But where do you get started being a non-Singaporean? What rules, regulations and laws do you need to observe? Here’s a quick guide on what to look out for if you are a foreigner deciding to purchase a property in Singapore.

When are you considered a foreigner?

Before we get into the details, let’s discuss when are you or an entity considered a non-Singaporean, or foreigner.

According to the Singapore Land Authority, anybody is considered a non-Singaporean (or foreigner) if they are:

• not a Singapore citizen;
• not a Singapore corporate entity;
• not a Singapore limited liability partnership; or
• not a Singapore association.

Please note that Singapore Permanent Residents (PRs) are also considered as non-Singaporeans (or foreigners) when it comes to buying a property in Singapore.

Does it make a difference if I’m a Singapore PR or EP holder?

Yes, it does. A Singapore PR or EP (Employment Pass) holder is considered a foreigner and can buy real estate property in Singapore but is only limited to certain property types.

Usually, a Singapore PR or EP holder faces more restrictions when it comes to property buying as compared to Singapore Citizens (SCs). However, they are given more allowances in terms of property purchase when compared with non-Singapore PRs.

For example, a Singapore PR can buy resale HDB flats and Executive Condominiums (ECs). They can seek approval from the Singapore Land Authority (SLA) to buy landed property plus they get significant tax implications.

What types of property can a foreigner buy in Singapore?

A foreigner can buy both public (HDB) housing and private properties, but there are certain restrictions. Therefore, when planning to buy property in Singapore, foreigners must fully understand what they are allowed to buy.

Let’s take a look at what foreigners can buy in Singapore by listing down the different property types.

Property type	What Singapore PRs can buy	What Non-Singapore PRs can buy
Resale HDB flats	Yes (with another SPR or SC)	No
Resale Executive Condominiums (ECs)	Yes (that have reached their 5-year MOP)	No
Private ECs	Yes	Yes
Private condos	Yes	Yes
Strata-landed houses	Yes	No
Landed properties in Sentosa Cove	Yes	Yes
Private landed properties	Yes (with special permission from Singapore Land Authority)	Yes (with special permission from Singapore Land Authority)

Since 19 July 2005, the Singapore government has revised the Residential Property Act (RPA) rules to allow foreigners to buy apartments or condominiums without the need to obtain prior approval. However, the government of Singapore has enforced restrictions on ownership of private residential properties by foreign individuals in Singapore.

Foreigners who wish to buy private landed property will need to obtain prior approval from relevant authorities. Additionally, foreigners looking to buy private residential properties face more taxes and restrictions as compared to non-residential properties, which include commercial property types.

Are foreigners allowed to buy a HDB flat in Singapore?

Foreigners can’t buy the government-subsidized public housing units sold by the HDB (Housing and Development Board) in Singapore, but a Singapore Citizen or PR can.

Singapore PRs can buy resale HDB flats only after three years of obtaining the PR status, if buying jointly with another SPR or SC. However, they cannot take HDB mortgage loans or access their CPF (Central Provident Fund) Housing Grant for this.

Are foreigners allowed to buy private property in Singapore?

Foreigners can buy private properties, including private apartments or condo units without prior approval by the Singapore government. There is no limit to the number of private properties a foreigner can buy in Singapore.

However, the private apartment or condominium unit being bought must be in a building of less than six stories. Also, a foreigner cannot purchase all private apartments or condo units within a building without government approval.

In addition, Singapore PRs can purchase an Executive Condominium 5 years after the building is completed while foreigners can buy it typically only after crossing the 10-year mark. Since after 10 years, these properties are counted as fully privatised.

Are foreigners allowed to buy landed property in Singapore?

Foreigners can’t buy or own landed properties in Singapore unless they acquire approval from the SLA’s Land Dealings Approvals Unit (LDAU) to buy a landed residential property.

The restricted properties require authorization before purchase by foreigners, which include bungalows, terrace houses, semi-detached houses, shophouses for non-commercial use, service apartments, HDB flats and HDB shophouse.

To acquire such an approval, the foreign applicants must prove that they have made “an adequate economic contribution” to the Singaporean state and society. Other factors that may be considered as economic contributions include but are not limited to:

• academic background;
• technical or professional qualifications;
• career scope; or
• history of investments in Singapore.

However, there’s an exception. Foreigners can buy a landed property in Sentosa Cove with approvals granted in just two days. Please note that any landed real estate brought in Sentosa Cove must be owner-occupied and cannot be rented out. If breached, there is a fine of $200,000 together with 3 years of imprisonment.

Is a foreigner allowed to buy industrial or commercial property in Singapore?

In general, there are far less or no restrictions on purchasing commercial properties in Singapore. Foreigners can own non-residential property, including most industrial or commercial properties like warehouses, shops, shopping malls, offices, etc. as easily as PRs and Singapore citizens.

There can be some restrictions involved when buying Singapore real estate as a foreigner. That is why, it is highly suggested to take help from a local mortgage specialist who can advise you of potential restrictions based on your situation.

Does a foreigner have to pay stamp duties and property tax in Singapore?

Just as Singapore Citizens, foreigners are also required to pay certain taxes such as stamp duties and property taxes regardless of the property type purchased.

Buyer’s Stamp Duty (BSD)

Based on the property’s market value or purchase price, the foreign property buyers have to pay 1-3% Buyer’s Stamp Duty, irrespective of the buyer nationality. Higher the market value or price of the property, the higher the BSD rate.

BSD Rate w.e.f. 15 Feb 2023
Market Value of the Property	BSD Rates for Residential Properties	BSD rates for Non-residential Properties
First $180,000	1%	1%
Next $180,000	2%	2%
Next $640,000	3%	3%
Next $500,000	4%	4%
Next $1.5 million	5%	5%
Above $3 million	6%	5%

BSD is rounded down to the nearest dollar, subject to a minimum duty of $1.

Additional Buyer Stamp Duty (ABSD)

The Additional Buyer Stamp Duty (ABSD) is another tax levied on foreigners buying a residential property in Singapore. Note that while Singapore Citizens need to pay ABSD for only second and subsequent properties (not first property purchase), Singapore PRs and foreigners have to pay this additional tax on all property purchases in Singapore.

Although Singapore Permanent Residents are considered foreigners, they pay a different rate for ABSD as compared to foreigners in Singapore.

Singapore PRs need to pay an Additional Buyer’s Stamp Duty (ABSD) rate of 5% when buying their first residential property, 30% on second, and 35% on third and subsequent residential property purchases.

On the other hand, foreigners pay an ABSD rate of 60% on the purchase or acquisition of any residential property. For example, if you are a foreigner looking to purchase a real estate property worth $2 million, then you’ll be paying an ABSD of $1.2 million.

Please note that ABSD is not levied on foreigners or foreign entities buying a warehouse or office building (commercial).

ABSD Rate w.e.f. 27th April 2023
	1st Property	2nd Property	3rd Property
Singapore Citizens	Not Applicable	20%	30%
Permanent Residents	5%	30%	35%
Foreigners	60%
Corporate Entities	65%

Note that ABSD will be levied on top of the Buyer’s Stamp Duty, and will be applicable to the market value or purchase price of the property, whichever is higher. It has to be paid within 14 days of completing the property’s Sale and Purchase Agreement.

Citizens from certain countries are exempt from ABSD. Please note that property buyers from certain countries who are within the scope of the respective Free Trade Agreements (FTAs) are exempted from ABSD. These nations will be given the same treatment as Singapore Citizens. Such citizens include:

• Nationals & Permanent Residents of Liechtenstein, Iceland, Norway, Switzerland and
• Nationals of the USA.

They will only be imposed an ABSD of 20% for their second private residential property and 30% of their third & subsequent private residential properties in Singapore.

Can a foreigner apply for mortgage loans in Singapore?

Foreigners can indeed apply for mortgage loans in Singapore, however, please note that there are limits on the required minimum cash down payment and on the Loan to Value (LTV) ratio of the mortgage. For example, the cash downpayment can range between 5% to 10% while the Loan to Value ratio can vary between 75% to 55% depending on the mortgage loan applicant’s age and loan tenure.

What are the legal requirements for getting a mortgage loan in Singapore if you’re a foreigner?

Once the property is approved for purchase, the mortgage application process is the same for both Singapore locals and foreigners. However, you must overcome legal restrictions that are specific to you.

Apart from having a good credit score, banks will be verifying your loan eligibility based on your net worth statement and proof of income.

You will have to submit the latest proofs of income such as payslips and bank account statements for the last 6 months, along with notice of assessment. You would also need to provide your latest CPF Ordinary Account (OA) statement showing account balance and contributions, if applicable. Other documents include:

• A copy of your passport or identity card;
• Signed Option to Purchase (OTP) or Sales and Purchase (S&P) Agreement.

At this stage, you must engage with a conveyancing lawyer and submit all the discussed documents. You will also be required to pay additional property costs and fees associated with buying a house in Singapore.

Which banks in Singapore offer home loans to foreigners?

All banks in Singapore offer home loans to foreigners who wish to buy or acquire authorised residential private properties in Singapore, either to live in or purely for investment purposes.

You can directly contact any of the major banks such as DBS, OCBC, UOB, Standard Chartered, Citibank, HSBC, Maybank, and others to apply for a home loan or you can simply contact DollarBack Mortgage, so that our professional consultants can help you find the right home mortgage loan for you.

Please note different banks may have different internal credit guidelines (i.e. different rates & packages) when it comes to how much of a mortgage amount can be granted. A mortgage consultant can help you negotiate with banks on your behalf and get the ‘best’ home loan package based on your current financial situation.

How much can a foreigner borrow for their home loan in Singapore?

The maximum amount you can borrow depends on the number of housing loans you already have or will be taking. If it is your first loan, you are entitled to an LTV of 75%. This means you can borrow as much as 75% of the market value or purchase price (whichever is lower) if you don’t have an outstanding housing loan.

As part of a cooling measure, the Singapore government has recently tightened the bank loan LTV from 80% to 75%. But if you have an outstanding loan, only 45% of the property’s market value or purchase price can be borrowed. The more outstanding loans you have at a time, the less amount you are allowed to borrow as a home loan.

What are the best places to live in Singapore for expats?

Singapore is a fantastic location to live in for expats and their families thanks to the low crime rate, exemplary cleanliness, and vibrant, multicultural community. If you are looking for a good expat enclave in Singapore, you may consider the following places:

Orchard Road

Linked with major stores, hotels and boutiques, the iconic Orchard Road (District 9) is the prime shopping area and entertainment zone of Singapore. This commercial hub of the city-state also offers sky-high luxury living with towering condominiums and apartment blocks. No doubt, it is one of the most expensive areas in the country.

Holland Village

Close to the downtown and just minutes away from Orchard Road, Holland Village has attractive leafy suburban streets packed with larger family homes, condominiums and apartment blocks together with local shops, Western restaurants and bars, giving this central location a community village vibe. With a range of housing options, open green spaces and the best schools around, you can choose your preferred style of living.

Sentosa

One of the most elite and expensive places to live in for expats in Singapore, Sentosa has some of the most extravagant sea-facing bungalows with eye-popping architecture and an array of shopping malls and dining options at the gateway. Residents of Sentosa Cove get access to a gold course, high-end restaurants and many recreational activities.

East Coast

Expats looking for a more local lifestyle away from the busyness of the city, affordable yet spacious condominiums, and proximity of eateries and safe space to bike and rollerblade choose the ever-popular East Coast. You can also find apartments with excellent sea-facing views and more reasonable rents or even some landed houses if you have privacy at the top of your priority list.

Tanjong Pagar

Located right in the heart of the city centre, Tanjong Pagar boasts classic shophouse-style buildings that lend a cultural charm to the area and are within walking distance to the main Central Business District of Singapore. This area has been hugely redeveloped to keep up with the demand and has all types of housing options available. The condo blocks have a pool and gym facilities with impressive skyline views.

There are many other expat-friendly places in Singapore, such as Robertson Quay, River Valley, Bukit Timah, Tanglin, Tiong Bahru, Woodlands, Marina Bay, Geylang and Serangoon. You can get in touch with one of our mortgage consultants if you are looking to purchase a house anywhere in Singapore.

Final Thoughts

If you are a foreigner making your first property purchase in Singapore, you might feel confused about where to begin thanks to the mind-boggling amount of information teeming the internet. At DollarBack Mortgage, we put your concerns at the top of our priority list.

Under the guidance of a professional mortgage broker with a wealth of experience and in-depth knowledge of the local property market, you can make a sound decision. We compare home loan packages across 16 banks in Singapore serving as your one-stop-shop for all your home loan needs. Let us help you in your home purchase decision.

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