Living in the tropics requires caution and planning. When it comes to purchasing property, there are many considerations beyond a simple price tag. With an abundance of natural beauty and culture high taxes and stringent regulations, living in the country will not be easy for everyone.
If you know what to look for, buying land in the country can be a rewarding experience that brings you peace and seclusion without sacrificing your home life too much. However, this does not mean that you cannot own real estate in Singapore. Read on to learn more about buying property in Singapore, important considerations when purchasing land in Singapore, and the potential pitfalls of investing in landed properties here.
What is a landed property in Singapore?
Landed property is a piece of land that has been permanently purchased or leased by the owner. This property can be used to develop into a residential, commercial, or industrial building. The lease agreement between the owners and the general public regulates who can stay in the building and what activities are permitted on the land.
When buying landed property in Singapore, there are many things that you must consider beyond just its price. Here are some important considerations when purchasing property in Singapore:
- What will you use it for?
If you do not know what your long-term plans for your home will be, then it may be hard to find an appropriate place to buy a landed property for sale. However, if you have some ideas about what type of building you would like to use it for after buying your land, then this will make finding a suitable place much easier. For example, if you want to build an office building with commercial space on top of it, then locating properties within such areas would be easier than trying to find something outside them.
- What kind of deed does your purchase come with?
The deed is an official document proving ownership over the land that comes with most real estate purchases. If there is no deed associated with the purchase of your land when you make your offer, then you could end up having to pay more at settlement time because there is no proof of ownership signed off by both parties involved in the transaction.
- What type of property do you have in mind?
Remember that Singapore does not allow foreigners to purchase residential property without a valid work permit. Many other types of restrictions could apply.
What Type of Landed property is Available for Purchase?
There are two types of land available for purchase in Singapore. There is freehold land, which means you can own a piece of the property and then build on it. This is often the type of property that most foreigners buy because there are no restrictions on ownership. The second option is leasehold land, which means you have to rent the property from the government or a private owner.
If you purchase leasehold land, it’s not possible to develop on the land because there are terms and conditions in your contract with the government or owner that prevent it. When buying freehold land, you also need to consider what kind of house will fit into your plot as well as whether or not you’re willing to live in an already-built house.
Be Aware of Singapore’s Changing Real Estate Laws
One of the most important things to keep in mind when purchasing land in Singapore is that laws and regulations are always changing. While it is difficult to predict how Singapore’s government has made significant changes to its real estate market over the past few years. This includes new taxes, higher property stamp duties, and expensive building codes that only apply to newly-built properties.
What this means for you is that what may have been a profitable investment six months ago may not be so today. In addition, the increasing demand for urban living has resulted in more restrictions on land use. So while you might want to invest in landed property now, it could be easier said than done when you consider how restrictive the market conditions have become.
Finding an agent in Singapore with expertise in landed property
Landed properties in Singapore are taxed at a high rate; you will also need to invest in additional infrastructures, like water and electricity. You must find an agent who has expertise in the landed property as they can help you identify areas with low taxes and high-value development potential. It is important to find someone who has experience buying and selling land.
If they do not have experience in this industry, they may be investing in the wrong area of the country for you. This can lead to greater losses for your investment. Finally, it is important to find someone who understands the subtleties of dealing with land and government regulations so that your purchase does not fall through because of misunderstandings.
The Process of Purchasing Property in Singapore
The process of purchasing property in Singapore starts with identifying what type of property you’re interested in. This can be accomplished by visiting the Landed Property website, which provides information on potential land plots. If you are looking for a specific place to build your dream home, this is a good starting point. You will have to find a plot that fits within your price range and location requirements before submitting an online application for it. Once you’ve found your desired area, you will need to apply to the land. The next step is paying the deposit and signing a sale agreement with the seller’s agent. Once all documents are signed, the transfer date is set, and your new home will officially be yours!
Taxes and Paying for a Singapore Landed Property
When you purchase a property in Singapore, you will be required to pay the Land Acquisition Tax. This tax is due after the land is purchased, and it is calculated according to the land sold. The first $1 million of the selling price will not be taxed. However, as soon as the selling price exceeds $1 million, the tax begins at 1 percent. If you sell your land within five years of purchase, then you are only liable for 5 percent of the selling price. With this said, if you buy an expensive piece of property in Singapore that requires a large initial investment, it might not make sense for you to resell it quickly.
Should you Buy Landed Properties in Singapore?
This is a question that many people have. First of all, it is important to know the regulations in place for buying property in Singapore. You must be able to prove that you are a citizen or permanent resident of Singapore and have had your tax returns filed in Singapore for the past three years. Additionally, if you are looking to purchase residential land, you must live on the property.
This means that if you already own a home and want to purchase more land, this will not be possible. If you are interested in purchasing land, many considerations come with doing so. The first consideration is where you would like to buy the property. Landed properties can come with a hefty price tag; however, because they often come with large pieces of undeveloped land as well as potential building sites, they can be worth the investment. Another consideration when buying land is whether or not you want it developed or left as natural terrain.
Conclusion
If you don’t mind developing your land yourself for resale or for use internally (such as luxury villas), this is an option worth considering over purchasing an undeveloped piece of land from someone else who plans on developing it themselves later down the line. Then a landed property is a great option for you. That said, what are you waiting for to get started on your property purchase?