Real estate investing Singapore

One of the most profitable ways to invest is through real estate. Real estate investment is very costly, especially in Singapore. However, the profits you gain through investment property is long term. That is why many individuals buy property in Singapore to use as a property investment.

It is a bit far-fetched to find property prices Singapore investment options. That is because most properties in Singapore are very expensive. However, this should not dissuade you from investing in real estate in Singapore. In this article, we will discuss the advantages gained if you buy property in Singapore. We will also tackle the eligibility of foreigners to own investment property as well as the taxes. We will also cite a few places where you can buy property in Singapore for investment.

KEY LEARNINGS & TAKEAWAYS

  • Singapore is one of the most expensive places to buy property in the world. This makes any investing mistakes very expensive.
  • Foreigners are allowed to invest in certain Singapore properties.
  • Keep your taxes in mind.
  • You must pay Additional Buyer’s Stamp Duty (ABSD).
  • Foreigners have to pay an additional tax on top of that. 

If an investor’s goal in buying real estate investment is for high rental income and capital appreciation, Singapore is not the country for you. Finding property prices Singapore investments is very challenging. Furthermore, many neighboring Asian countries offer far more superior real estate investment opportunities at a cheaper price than the cost to buy property in Singapore. Therefore, choose Singapore for your property investments if you aim for stability over getting high profits.

Investment property eligibility of foreigners

Foreigners are eligible to buy any condominium unit in Singapore. They are treated the same way a Singaporean citizen is treated when it comes to buying condominiums. They will get a freehold title with their name on it. However, that is not the case if the foreigner chooses to get a property prices Singapore investment.

Technically, all landed properties are exclusive to Singaporean citizens. Foreigners can still buy a landed property. However, there are strict rules that they need to comply with. One of them is government approval.

A foreigner needs to prove that by getting landed property ownership, he will be able to benefit Singapore’s economy. If the benefit to the economy can be quantified, it is said that the foreigner should be able to contribute at least SG$20,000,000 or greater. Thus, only a handful of foreigners get approved for this.

Furthermore, foreigners pay higher tax on property purchases. This is the reason why even the property prices Singapore option can be very expensive. Usually, foreigners wait to get approved of permanent residency in Singapore before they buy property in Singapore. This is so that they will pay less taxes.

Singapore property taxes

When you buy property in Singapore, expect that you will have to pay taxes. The two basic types of property taxes are the annual property tax and the Additional Buyer’s Stamp Duty (ABSD). As mentioned, foreigners pay a lot more taxes on properties compared to Singapore citizens and permanent residents. Thus, it is important to know the tax rates before you buy property in Singapore.

Additional Buyer’s Stamp Duty (ABSD) is paid upon purchasing a property in Singapore. This is usually based on a percentage of the total selling price of the property. Singaporean citizens are not required to pay ABSD if it is their first time buying a house. However, they need to pay 7% of the selling price as ABSD for their second home. ABSD rate will gradually increase the more they buy properties.

Singapore permanent residents are required to pay ABSD at 5% on their first property. The highest ABSD rate both citizens and permanent residents need to pay is only 10%. However, foreigners are required to pay 15% of ABSD or higher.

Annual tax property has a progessive tax rate that is based on annual rental value. There is a specific rate that is assigned depending on the property price. However, foreigners are required to pay an additional 10% on the top of the tax rate. This means that buying the property prices Singapore house will still cost a lot for a foreigner as well as while he owns the property.

Ideal places to invest in Singapore

The most ideal place where you should buy property in Singapore is those areas that have easy access to Singapore’s MRT stations. This is the widely-used form of transportation in Singapore. That is why most home buyers choose to leave near these MRT stations. Thus, you should pick properties for investment that are near these transport systems.

As for a specific region, there are a few things that you need to take note of. Properties in the central region of Singapore are the most expensive in all of Asia. You are likely to find properties that cost S$30,000 per square meter as the property prices Singapore option. Most properties here can be bought with leasehold tenures that can last for either 99 years or 999 years. Northern part of the country has one of the cheapest-priced properties. That is because it has more greenery than high buildings. The west region of Singapore is usually where the industries and large educational institutions are located. That is why most investors pick properties that are ideal for workers and students. Thus, it is important that a property investor does research on the region before deciding to buy property in Singapore for investment.

In summary

Singapore may be the second most expensive country to buy property for investment. However, that does not imply that investing in real estate in Singapore is not profitable. It is important to research which properties will give maximum profit to you. Better yet, you can also hire a property agent to help you buy property in Singapore for investment. Do you want more information on property investment in Singapore? Read more articles at SRX Property Singapore.