If you are looking to purchase a property in Singapore as a foreigner, the good news is that this is usually an attainable goal that many people can achieve. In fact, the country has attracted an increasing number of investors thanks to its transparent regulatory environment. However, it is also important to remember that the country’s property market can seem confusing and complicated, especially to first-time buyers. Therefore, to ensure that the buying process goes smoothly, you will need to spend some time familiarising yourself with the financial rules in Singapore. Within this guide, you will find out more about buying a property in Singapore if you are a foreigner.
Check Your Eligibility
To begin with, you will need to learn more about what foreigners can and cannot buy. In Singapore, residential properties are divided into restricted and non-restricted categories. As a foreigner, you can purchase non-restricted properties, such as apartments or condominium units, flat units, HDB flats, as well as industrial and commercial properties. If you want to buy a restricted property, you will need approval from the Land Dealings Approval Unit (LDAU). These can include terraced houses, semi-detached houses, bungalows, association premises, and others. In addition, you will find that the buying process may differ depending on the property that you wish to buy.
Apply For A Loan
Buying a property in Singapore is a huge financial commitment for many, so it’s crucial to carefully plan this process. As banks often change their home loan interest rates, it might be helpful to compare home loans on PropertyGuru, where you can find a suitable DBS home loan. DBS offers home loans for all types of new and resale private property, along with HDB flats and Executive Condominiums. Before applying, it’s advisable to speak to an expert from PropertyGuru to check if you are eligible and get recommendations tailored to your specific needs.
Consider Stamp Duty
Another factor that you will need to consider is paying stamp duty in Singapore. If you are a foreigner living in Singapore, the stamp duty rates that you will pay will differ from those paid by residents in the country. There are two types of stamp duty that you will need to be aware of. Firstly, Buyer Stamp Duty (BSD) applies to anyone who wants to buy a property in Singapore and is based on a tiered rate depending on the market value of the property. Secondly, you will also need to pay an additional stamp duty rate for foreigners, which is currently set at 20%.
Learn What Affects Your LTV Ratio
You should also keep in mind that banks and moneylenders aren’t obliged to give you the maximum LTV (Loan to Value) you have applied for. They will take your financial circumstances into consideration, which means that you may be awarded a lower LTV. Some factors that might affect your LTV ratio include any outstanding home loans you may have, as well as the location and condition of the property. Also, every home buying and application process involves a credit check, so you should focus on improving your credit score.
Speed Up The Process
At times, the process of buying a property in Singapore may seem never-ending and frustrating. Nevertheless, there are a few things you can do to speed things up. For example, using loan comparison tools and mobile apps may save you valuable time and money. In addition, hiring a reputable and trusted property agent will provide you with great insight into the property market. You should also try to avoid incurring high maintenance or legal fees. Familiarise yourself with the Housing Development Board for more information on each step and what is required of you.
Save Money
Once you are aware of what type of property you want to buy and the loan you are going to apply for, it’s important to ensure that you have control over your finances so that you can save enough money. Depending on the property price, you will be able to determine how much money you should save. There are also a few strategies you can adopt to make things easier. For example, you should try to keep debts low before applying for a loan by paying back your credit cards full or not buying a car before purchasing a property.
Make An Offer
The final step is to make an offer and seal the deal on your dream property. To ensure that your offer gets accepted, it’s important to explain your situation in full. For example, you should let the seller know when you want to move and demonstrate that you have your finances in order. It might also be beneficial to ask for a second viewing, which will allow you to detect any faults that you might have missed on your first viewing. This will show the seller that you are a serious bidder and you may be able to negotiate a lower price.