1. State of the Market
The sales market continues to be strong in 2012; this has required the government to step in with regular “cooling measures”. Whether you’re looking for an investment or a place to live, buying is a good option if your circumstances allow it. Investing your monthly rental allowance into your own property rather than someone else’s makes good sense.
On the other hand, the volatile nature of the Singapore market makes property ownership a tricky prospect in the short term. As an expatriate, how long you reside here usually depends on your employment contract. If you do buy property and have to sell it at short notice, you run the risk of having to offload it at an unfavourable price when the market is in a downturn. If you have the financial holding power to keep the property and sell it at a later time when prices are high, Singapore offers great returns on your investment and is a popular country for property investment for this and other reasons.
There are no restrictions against expats purchasing condominiums. However, to buy a landed property (a house with a garden or yard), you will need to hold Permanent Residence status and receive special approval from the Land Development Authority with strict conditions attached. Landed properties include bungalows, semi-detached houses and terrace houses.
It is recommended that you put down at least 30 percent of the purchase price to safeguard yourself against market downturns. Also remember to allow for additional expenses including maintenance of the property, insurance and taxes. If you live in your property, the tax rate is four percent of the annual value of the rental. If you rent it out, the rate increases to 10 percent.
• Solicitors’ fees
• Mortgage solicitors’ fees
• Transfer fee and stamp duty
• Government department fees
• Transfer and mortgage registration fee
Once you have found a property that interests you, confirm its value through a bank or check the Inland Revenue Authority’s website for the last transaction price of a similar property. Once you and the seller have agreed on a price, you will need to pay a one-percent deposit to secure it. You are usually allowed a two week option period to pay a further four percent, then a further eight to 12 weeks to pay the balance. You should have a lawyer on hand to advise you during this time.
A foreigner can usually borrow up to 80 percent of a local bank’s valuation of a property.
|Expat Realtor can also assist you with buying a home. Their extensive database will give you a good idea of what’s on the market. Call them at 6255 1027.|