Property ownership brings with it incredible excitement. It comes with the promise of financial security and might just be your key to financial freedom. Looking to buy private property in Singapore? Owing to lack of knowledge, the journey to property ownership can turn into a grueling process that you really did not anticipate. If done wrong, it can also bring with it unforeseen risks capable of completely destroying your financial stability.
So, to help you out, here are some of the top regulations you should keep in mind when buying private property in Singapore:
To be eligible for private property ownership in Singapore, the rules state that you should have lived in the executive condo, DBSS flat or HDB apartment for a Minimum Occupation Period of at least five years before purchasing it as your private property. However, if you have lived in a Housing and Urban Development Company, this occupation period doesn’t apply to you.
If you are looking to buy property using alternative funding by asking for a loan from your bank, you will be required to meet certain thresholds. They include:
• Your TDSR-Total Debt Servicing Ratio: To be approved, the lenders look at all the loans you are currently servicing in a month. Whether it is property loans, student loans, personal loans or car loans, if it exceeds 60% of your gross salary per month, you will not be approved.
• Loan to Value Ratio: When buying your first home, you can’t ask for a loan matching the entire value of the property. Here, you are only given 80 percent to 90 percent of the total property value and expected to come up with the rest on your own.
Minimum Down Payment
When using a bank loan, you are required to pay up to 5% of the value of the property in cash as minimum down payment.
Pay Additional Buyer’s Stamp Duty
Additional buyer’s stamp duty is nil if you are buying private property for the first time. However, you should note that it increases to 7% of the second property value if you are a Singaporean citizen. If you are a foreigner, the cap is 15%.
By and large, knowing what to expect as an investor looking to buying private property in Singapore is the main determining factor as to how smooth or rough the process will be for you. Above are just hints of top regulations you should keep in mind before you start the property ownership journey in Singapore.