Procedure to Buy or Sell - (Locals/ Foreigners)

July 25

Procedure to Buy/Sell

Who Can Buy Private Property?

All Singapore citizens and companies can freely buy any type of private residential property. However, there are HDB and CPF restrictions that may affect you when you buy a private property. For flats bought directly from HDB (including flats bought from the open market with CPF Housing Grant)

a) The flats lessees must satisfy the required occupation period for the flat before acquiring the private property
b) The flat lessees must continue to stay in the HDB flat after acquiring the private property.

For flats bought from the open market without CPF Housing Grant

There is no need to satisfy the required occupation period for the flat before acquiring the private property. However, the flat lessees must continue to stay in the HDB flat after acquiring the private property.

The Buying / Selling Process for locals:

1) Select an agent

Optional, but recommended. A professional agent will not only help you to find the right property, but also ensure you get the right price, ensure all small details are covered prior to purchase, guide you through the process and make recommendations on financing and legal representation.

2) Find your property and agree a price

When reaching a preliminary agreement to buy, ensure that all important points have been discussed and agreed, including any repairs or changes prior to purchase, what stays and what goes, any special requirements from both side and the anticipated schedule.

3) Sign an Option to Purchase

For Private Property - This is obtained from the seller through their lawyer or agent. At this point you are required to pay a non-refundable option fee (normally 1% of purchase price). The option period is usually 14 days.For HDB Property - Since 15 April 2003, the HDB standard Option to Purchase has replaced the Sale & Purchase Agreement as the form of contract to be used in resale flat transactions. Buyers and sellers should not enter into any other forms of agreement or supplemental agreements.

4) Appoint a Lawyer

You now need to appoint a lawyer to make legal enquiries on the status of the seller, the title of the property and the terms of the sale.

5) Arranging Financing

Compare interest rates and special terms when choosing your finance scheme. You can apply for withdrawal of CPF savings by completing an application together with a valuation report prepared by a licensed valuer who is on the CPF panel of valuers.

6) Exercise the Option / HDB 1st Appointment

For Private Property - If all is well you now sign the sale contract, and pay 5% of the purchase price (less the option fee). You also need to pay stamp duty within 14 days of the contract.

For HDB Property - The buyer and seller must both attend the Sales Declaration & Registration appointment to seal the closing price. After this appointment, HDB will check eligibility of the transaction and arrange for a 1st Appointment – usually about 4 weeks after the Sales Declaration.

7) Legal Inspection & Completion

Your lawyer will carry out an investigation of title deeds and send requisitions to various government departments. The seller’s lawyer will also prepare the completion statement and send documents for stamping to effect completion.

8) Settle Payment and Handover / HDB 2nd Appointment

For Private Property - You now settle the outstanding balance of the purchase price. This might be 8 to 12 weeks after exercising the option. The seller’s lawyer will then handover the keys and title deed of conveyance, and you become the owner of your new home.

For HDB Property -
Completion takes place at the 2nd Appointment, usually about a month after the 1st Appointment. The insurance and mortgage is arranged and stamp duty, legal fees and agent fees are paid. The sale is completed and arrangements are made for moving into your new home.

Entire Process Time: Usually between 10 to 14 weeks

Foreigners Buying

A foreign person is defined under the Residential Property Act to be:

(a) any person who is not a citizen,
(b) any permanent resident,
(c) any foreign company or any converted foreign company,
(d) any society or converted society.

Hence, even a permanent resident is categorised as a foreigner unlike in the case of purchasing a Housing and Development Board flat, whereby a permanent resident could be the applicant or the authorised occupant of the said flat.

However, it does not necessarily mean that all foreigners are restricted from purchasing residential properties in Singapore. A foreign person can still buy residential property caught under the Act if he / she had obtained explicit approval from the Land Dealings Approval Unit (Controller of Residential Property; Section 25 of Residential Property Act).

The approval will be looked upon favourably if: - the individual is a permanent resident- an individual who can provide economic benefits to Singapore or makes adequate contribution in Singapore; and- one who possesses professional or other qualifications or experience which are of benefits or advantageous to Singapore.

Any foreigners who attained ownership of residential properties in Singapore prior to the commencement of the Act can have the right to retain it. In the event the said foreigners are desirous to sell their properties, it shall have to be sold only to any Singapore citizen or approved purchasers as stipulated by the Act.

Foreigners who are interested in purchasing residential properties but have yet to attain explicit approval from the Land Dealings Unit, the real estate agent can still have the foreigners to commit in the sale and purchase of the property concerned by spelling out clearly in the Option to purchase documents by the insertion of a clause, i.e. “the intended purchase of the above mentioned property by the intending Purchases, namely one ___________ is subject to explicit approval from the Land Dealings Approval Unit, Controller of Residential Property as stipulated by the governing Residential Property Act 1976.

In the event the approval is not validly obtained, it is hereby understood that the owners shall refund all monies without interests accrued to the said intending Purchaser and thereafter neither party shall have any claims, demands, proceedings, costs, expenses whatsoever against each other as pertaining to the said cancellation of intending sale and purchase of the said property concerned”.

Foreigners can still attain interest in Singapore residential properties with a written approval from the Controller of Residential Property Land Dealings:- A unit in an approved condominium development. - Any non-residential, commercial or industrial property. - You are buying the property for owner-occupation.

For restricted property such as vacant land, landed properties such as bungalows, semi-detached and terrace houses and units in buildings of less than 6 levels, etc. foreigners need to apply for approval from Singapore Land Authority before buying.

For more details on application, visit the Singapore Land Authority website. For HDB flats, HDB shop-houses and executive condominiums, eligibility is subjected to the Housing and Development Board.To buy a flat directly from HDB, you must be a Singapore citizen, must include another Singapore citizen or Singapore permanent resident to form a family nucleus.

To buy a flat from the resale market, you must be a Singapore citizen or Singapore permanent resident. Include at least one listed occupier who is a Singapore permanent resident or Singapore citizen.Are there any restrictions on home loans for foreigners?

Foreigners and permanent residents can borrow loans up to 70% - 80% of the purchase price of the property subjected to different banks criteria. Non-Singapore companies cannot be granted Singapore dollar loans to purchase residential properties.

What conditions must I fulfill if I am a Permanent Resident getting a home loan?

To obtain Singapore dollar loan, you have to provide: - A written understanding that you do not have outstanding housing loans from any other financial institutions in Singapore.