Residential Property Act – Part 3, What do you advise a foreign person to do before buying a restricted property? What are the conditions under Residential Property Act for Foreigners? Other FAQ on Residential Property Act.
What do foreigners have to take note once they are approved to purchase a landed property?
What do you advise a foreign person to do before buying a restricted property?
- Apply for an In-Principle-Approval from LDAU which is valid for 6 months here
What are the assessment criteria?
|Other landed property areas||SENTOSA COVE|
|Based on individual merits. But main requirements are:
1) Minimum SPR status
2) Make an adequate economic contribution to Singapore
• Academic, professional and/or tech qualifications
• Expertise and working experience needed by
• Investments in the type of industry of service sector needed in SGP
|1) No strict assessment criteria (ie, no need to be SPR;
no need to contribute to SGP economy etc)
2) No MOP period
3) Land must not exceed 18,000 sq ft
4) All 99-year leasehold (no Freehold)
5) No LDAU’s approval needed
6) Own only 1 restricted property
7) For owner-occupied only
8) Rest of the rules are similar to other landed on the mainland
|Foreigners must fulfil the conditions under Residential Property Act :|
|1) Upon approval, the foreign person can only own 1 restricted property for owner occupation only; not for investment (ie, cannot rent out)
2) Minimum Occupation Period (MOP) is 5 years before selling except for Sentosa Cove. Controller of Residential Property will be empowered to lodge a caveat on restricted property to prevent them from selling it during MOP.
3) Land area must not exceed 15,000 sqft regardless whether it is freehold or leasehold
4) Owners who give up their PR status / Citizenship will have to sell their restricted properties within 2 years
5) Foreigner who inherited a restricted property without LDAU’s approval will need to sell it within 5 years from the date of inheritance. Therefore they have 5 years to get approval.
6) If the foreign persons buy land and construct their own houses, they have to complete the construction within 36 months. 5 years MOP starts from MOP or CSC (whichever is earlier)
7) If the foreigner person is changing from 1 restricted property to another, he needs to dispose the 1st one within 3 months from the date of possession of the 2nd restricted property
8) Singaporeans are not allowed to hold restricted property on trust for any foreign person. Such trust is null and void
Other FAQ on Residential Property Act for Foreigners.
|Can the foreign person who wishes to buy a restricted property apply for approval even though he/she does not have a property in mind?|
|• Yes, he may apply for an approval in-principle. In fact, he is encouraged to do so before entering into any contract to purchase a restricted property so as to avoid any forfeiture of monies paid in the event he is/not granted approval to acquire the property
• If approval is granted, he has to submit the details of the property he intends to purchase within 6 months from the date of the letter of approval. Otherwise, the approval will lapse and he will have to make a fresh application. There is no extension of validity for the approval in-principle granted.
|What is the Processing Time and any cost involved?|
|• About 30 working days from the date all information and documents are received by SLA (Singapore Land Authority). The processing time includes verifying the information with other agencies, checking if the applicant or his spouse owns restricted property, as well as the assessment of the application by the Residential Advisory Committee before final recommendation is sent to the Minister for consideration
• Yes, $1,220 per application.
|What is the definition of a Foreign Company?|
|• A foreign company within the meaning of the Residential Property Act is a company that is not a Singapore Company. A Singapore Company is one which is incorporated in Singapore where all its directors and members/shareholders are Singapore Citizen (SC) and if a member/shareholder of a company, it must be a Singapore Company, and so on. The ultimate beneficiaries of the company must be Singapore Citizens (SC).
Singapore Company needs to apply for a Clearance Certificate to acquire and retain the restricted property.
|Can the Foreign Company purchase a Restricted Property for Investment?|
|• No. If the company is granted approval to purchase a restricted property, it will be subjected to the condition that the property is used for the occupation of the company’s senior personnel as a dwelling house and not for rental or any other purpose.|
|Can the Foreign Person appeal if his application is unsuccessful?|
|• Yes, he can appeal within 3 months from the date of the letter informing him of the decision. He is advised to appeal only if there are new substantial grounds not previously brought to authority’s attention|