Landed property in Singapore has long been a symbol of prestige and financial success. As one of the most expensive real estate markets in the world, buying a landed property here requires careful planning and understanding of the complex regulations and market dynamics. For many, owning a landed property is not just a financial investment but also a lifestyle choice that offers more space, privacy and long-term value.
Whether you’re a first-time homebuyer, an investor or someone looking to upgrade to a more spacious living arrangement, buy landed property in Singapore is a significant commitment. This article will guide you through the essential aspects of purchasing landed property in Singapore, covering everything from eligibility and financing options to the types of landed properties available and the steps involved in the process.
Understanding Landed Property in Singapore
Landed property refers to real estate where the buyer owns both the land and the building that sits on it. This type of property stands in contrast to apartments or condominiums, where the land is typically owned by a developer or a management body and the buyer only owns the unit itself.
Landed properties in Singapore come in various forms, including bungalows, semi-detached houses, terrace houses and shophouses. These properties typically offer more space, privacy and the opportunity to personalise the home and garden according to your preferences. However, they also come with higher costs compared to apartments or condominiums, making them less accessible for the average buyer.
Eligibility to Buy Landed Property in Singapore
Before embarking on the journey of purchasing landed property, it’s important to understand the eligibility criteria. Unlike apartments or condominiums, which are generally open to both Singapore citizens and permanent residents (PRs), there are stricter regulations regarding the ownership of landed property.
1. For Singapore Citizens
Singapore citizens have more flexibility when it comes to purchasing landed property. They are eligible to buy any type of landed property, including bungalows, semi-detached houses and terrace houses without restrictions. However, the property must be for residential purposes and cannot be used for commercial or industrial activities.
2. For Singapore Permanent Residents
Permanent residents (PRs) face more restrictions when it comes to purchasing landed property. PRs are typically only allowed to buy certain types of landed property, such as terrace houses, but they must apply for approval from the Singapore Land Authority (SLA) before making the purchase. In general, PRs are not allowed to purchase bungalows or semi-detached houses, unless they meet specific conditions set by the government.
3. For Foreigners
Foreigners face the most significant restrictions when buying landed property in Singapore. Under the Residential Property Act, foreigners are generally not allowed to purchase landed property unless they obtain approval from the Singapore government. However, foreigners can buy landed property in specific circumstances, such as if they are purchasing a property for business purposes or if they are an established investor with substantial financial means. In most cases, foreigners are more likely to be restricted to purchasing condominiums rather than landed properties.
Types of Landed Property Available in Singapore
Singapore offers a variety of landed property types, each catering to different lifestyles, preferences and budgets. Understanding the differences between these property types is essential to making an informed decision.
1. Bungalows
Bungalows are the most luxurious type of landed property in Singapore. These spacious homes are typically located in prime areas and offer the most privacy, with large gardens and ample living space. Bungalows are ideal for those who value exclusivity and are willing to pay a premium for larger plots of land and greater living comfort. However, bungalows are also the most expensive type of landed property in Singapore, with prices often reaching tens of millions of dollars.
2. Semi-Detached Houses
Semi-detached houses are a middle ground between bungalows and terrace houses. These properties are typically larger than terrace houses but smaller and more affordable than bungalows. A semi-detached house shares one wall with a neighbouring property, making them less private than detached bungalows but still offering more space than typical apartments. Semi-detached houses are popular among families looking for a balance of space and affordability.
3. Terrace Houses
Terrace houses are the most affordable type of landed property in Singapore. These properties are usually part of a row of houses and share common walls with adjacent units. While terrace houses may not offer as much privacy as bungalows or semi-detached houses, they are still a great option for families looking for a landed property at a more affordable price. Terrace houses are often located in residential neighbourhoods with convenient access to schools, parks and amenities.
4. Shophouses
Shophouses are unique types of landed properties that combine both residential and commercial space. These properties are typically found in historical districts and offer the opportunity to live and run a business in the same location. Shophouses are typically more expensive than terrace houses but can offer a unique lifestyle that blends work and home life.
Financing Options for Landed Property
Given the high cost of landed properties in Singapore, securing financing is a crucial aspect of the buying process. Most buyers will need to take out a mortgage to fund the purchase. However, it’s important to note that financing options for landed properties are often more restrictive compared to other types of property, such as condominiums.
1. Loan-to-Value (LTV) Ratio
The loan-to-value (LTV) ratio is the percentage of the property’s value that you can borrow from a bank or financial institution. For landed properties, the LTV ratio is typically lower than for other types of properties, with most banks offering loans of up to 75% of the property’s value. This means that buyers will need to have a substantial deposit, usually around 25% of the property price to secure a loan.
2. Stamp Duty and Additional Costs
In addition to the deposit and mortgage, buyers should be prepared for other costs associated with purchasing landed property. Stamp duty, which is a tax levied on property transactions, can be a significant cost. For residential properties, stamp duty is calculated based on the property’s purchase price or market value, whichever is higher. Other costs may include legal fees, valuation fees and maintenance costs.
3. Government Schemes and Grants
While there are no specific government grants for buying landed property, there are various schemes and grants available to Singapore citizens for purchasing other types of properties. It’s important to research available financial assistance options and determine what you may be eligible for, particularly if you’re a first-time buyer.
Steps to Buying Landed Property in Singapore
The process of buying landed property in Singapore is similar to buying other types of real estate, but there are some additional steps involved. Here’s an overview of the typical steps in the process:
1. Pre-Purchase Research
Before you begin the purchase process, it’s important to conduct thorough research. This includes understanding the current property market conditions, researching different types of landed properties and determining your budget. You should also familiarise yourself with the eligibility criteria and ensure you meet the requirements.
2. Securing Financing
Once you have a clear understanding of your budget, you can start exploring mortgage options. Speak to banks or mortgage brokers to understand your financing options and get pre-approved for a loan. This will help streamline the process once you find the right property.
3. Viewing Properties
Once your financing is in place, you can begin viewing landed properties that meet your criteria. It’s essential to work with a reputable real estate agent who can guide you through the process and help you find the best property for your needs.
4. Making an Offer
Once you find a suitable property, you can make an offer. If the seller accepts, you will typically enter into a sale and purchase agreement, which outlines the terms of the deal. You will need to pay a deposit to secure the property.
5. Completing the Transaction
After the agreement is signed, the final step involves completing the payment, signing the necessary documents, and transferring ownership of the property. The completion process usually takes a few weeks, during which time the legal paperwork will be processed.
Conclusion
Buying landed property in Singapore can be a complex but rewarding experience. It’s essential to understand the eligibility criteria, types of properties available, financing options and the steps involved in the process. With careful planning and expert guidance, owning a landed property in Singapore can offer not only a luxurious living space but also a sound long-term investment. Whether you’re a Singapore citizen or a permanent resident, it’s crucial to stay informed and work with professionals who can help navigate the unique aspects of purchasing landed property in this competitive market.
