Tips for buying property in Singapore (2025)

In Singapore, foreigners are allowed to buy houses for living or investment purposes since 19 July 7, based on the Residential Property Act (RPA).

Singapore is known as one of the top business destinations in Asia. The Singapore government always creates favorable conditions for businesses and individuals to come to this island nation to invest and do business. If a business has Singapore company registration, the settlement story, with many issues related to real estate is the next step that needs attention.

For those planning to live in Singapore long-term, buying a home is often seen as more practical than renting. However, it’s important to understand the rules, costs, and other details involved.

Our article will give you a clear overview of the property buying process in Singapore, and also explain the costs, taxes, and other key points to know before making a purchase.

1. Legal framework

As part of the ASEAN Economic Community (AEC), labor movement between member countries has become more common. Because of this, more foreigners—especially citizens from ASEAN countries—are buying and selling property in Singapore. They do this for many reasons, such as starting a company, investing, doing business, settling down, or renting a place. Some people also buy or rent a home when they stay in Singapore for short-term English courses.

No matter the reason, buyers must first check if they are allowed to buy the type of property they want. Singapore has specific rules about which properties foreigners can and cannot buy.

These rules are part of the Residential Property Act of 1973. This law controls what kind of land and housing foreigners can own. It applies to anyone who is not a Singapore citizen—including both temporary and permanent residents.

Types of real estate restricted from foreign ownership:

1. Vacant land planned for residential use.
2. Land with houses such as bungalows, terrace houses, or semi-detached houses.
3. Properties that are part of a residential development but are not officially classified as condominiums.
4. Apartment in a building of less than 6 floors.

If a foreigner wants to buy any of these restricted types of properties, they must first apply for special permission from the Land Dealings Approval Unit.

Types of real estate not subject to foreign ownership restrictions:

1. Apartments in the project are approved as condominium development under the Planning Act.
2. An apartment in a building of six or more floors including the ground floor and the floors below the ground floor.
3. Real estate for lease in the real estate group is restricted in ownership with a term of no more than 7 years.

In short, the real estate market in Singapore is divided into two areas.

• First area The first type of property is private housing, provided by real estate companies. These are the kinds of properties that foreigners—including Vietnamese citizens—are allowed to buy.Examples include: High-rise apartments (also known as condominiums), apartments in smaller buildings. These types of properties are more accessible for foreigners compared to other housing types in Singapore.
• Second area specializes in dealing in government-built housing, commonly known as HDB housing. This type of real estate is often restricted to foreign ownership. If you want to buy real estate such as Housing Development Board (HDB) flats, you need to contact HDB.

2. Mortgages and Investment Capital

To finance a home purchase, buyers can borrow up to 80% of the property value (or the estimated value, as long as it is lower than the actual value) from local banks. If the buyer already owns a property in Singapore, they can only borrow up to 60%.

Many banks offer home loans to foreigners. Homebuyers should ask about mortgage terms and discuss their current personal circumstances with a financial advisor.

The same is true for buying real estate for business investment purposes. If you want to rent out or resell your newly purchased apartment for profit, investors should consider the market situation before making any buying or selling decisions.

First, it can be said that the rental sector in Singapore tends to decrease (up to 3%) compared to other Asian countries such as Indonesia or Thailand. Second, the government has introduced many "stabilization" measures to stabilize the real estate market. Currently, real estate prices in Singapore seem to be increasing slowly, but whether they will develop further or not remains to be seen.

In short, this is a complex issue, depending very much on the buyer's personal finances and investment goals. Buyers/investors should present their personal financial capabilities to a consultant about buying property in Singapore before committing to anything.

3. Real estate buying and selling process in Singapore

Once you have found a desirable apartment, the buying process will proceed as follows:

Buyer contacts seller or agent Buyer pays 1% of the home value to seller Seller confirms in writing 'option-to-purchase' to buyer through buyer's attorney With 'option-to-purchase', seller has no right to accept other offers for home for a period of two weeks

A "call option" typically refers to a payment term of up to 10% of the purchase price. This shows the seller that the buyer is serious about the purchase.

The attorney will prepare the documents for transferring the property. They will also advise the buyer on the amount due upon completion of the sale.
When buying a property in Singapore, it is not advisable to ignore the help of a professional lawyer. In addition to the assistance mentioned above, the lawyer will look into the owner's ownership information, check the owner's credit history and many other important information.

4. Costs of buying real estate

Obviously, when buying property in Singapore, buyers will have to bear certain costs. Common costs include:

• 18% VAT on properties (e.g. properties built less than 1 year ago).
• 3% stamp duty on first purchase (depending on property value).
• 1% of the value for real estate broker.
• Legal fees for lawyers, usually 0.3% of the property value.
• Transfer of ownership registration fee.

5. Property tax

In addition to maintenance costs, buyers must pay property tax in Singapore. This tax is calculated using the formula:

Tax = annual value x tax rate.

The annual value of a property is the estimated amount of money that would be earned each year if the property were rented out. This figure is adjusted annually to reflect market conditions. When calculating this, it does not matter if the owner actually rents out the property or if the rent is different from the assumed value.

Tax rate: varies from 10 - 19% (10-20% from January 1), depending on the annual value. For apartment owners, the tax rate is much lower, around 2015-4%.

6. Tax on rental income

If the owner has rental income after purchasing a property in Singapore, this income must be declared in the personal income tax. Rental income must be listed in the tax form under "Other income: rental of property"

Rental income tax is calculated by subtracting deductible expenses from annual income. Deductible expenses include:

1. Home loan interest.
2. Property tax.
3. Fire insurance.
4. Cost of maintenance, repair, replacement of furniture and accessories.
5. Utility bills (if not paid by tenant).

Local residents pay a progressive income tax rate of 0-20%, depending on their tax bracket.

Generally, financial residency regulations apply to all permanent residents, as well as all foreign nationals.
All other individuals are taxed as non-Singaporeans. Their income including rental income is taxed at the flat rate of 20%.

As one of the countries with the greenest and cleanest living environment in the world, along with a stable and developed economy and politics, Singapore is a top choice for foreigners to live, work and settle.

6. How can we help you incorporate your company in Singapore?

Global Links Asia, with its experience in consulting and supporting the establishment of a company in Singapore, will assist businesses in complying with Singaporean law by:

• Consulting on suitable company type when opening a company in Singapore.
• Legal advice meets company needs and supports problem solving, ensuring the company operates legally and effectively.
• Offer you nominee director, secretary, andregiserted adress solutions.
• Manage your company financially with our one-stop cost-efficient tax accounting services for Singapore companies
• Register and verify your bank account.
• Hiring staff, auditing, payroll reporting, and trademark registration in accordance with legal procedures.

In addition, when businesses have a need, GLA will provide consulting support and connect with experienced Singaporean lawyers to support businesses in purchasing real estate in Singapore to serve corporate or personal needs.

Highlights

• Foreigners can buy property in Singapore, but they must follow the Residential Property Act 1973 and its later updates. Some types of property are restricted, and you need to get special permission if you want to buy them.
• When buying, you’ll need to pay for several costs, such as VAT, stamp duty, legal fees, and property tax. Rental income is also taxed.
• The purchase process includes placing a deposit, signing a “purchase option,” and completing the transfer with the assistance of a professional attorney from GLA.
• GLA can support you with all legal matters, including starting a company, managing finances, and buying property in Singapore.