Residential Property Act – Part 4, What are the conditions under Residential Property Act for Foreign developers? Other FAQ on Residential Property Act.
What do foreign developers have to take note?
Residential Property Act (Part 4)
Conditions for Housing Developers:
- This Act also applies to foreign housing developers (ie, those with foreign shareholders) developing residential projects in SGP
- Developers with foreign shareholders are required to get a Qualifying Certificate (QC) to buy residential site for Development
- Foreign housing developers are not allowed to rent out the unsold units. They can be fined 3 times the rental income or $10k (whichever is higher)
- Foreign housing developers who are unable to complete their residential projects within a stipulated Project
Completions Period (PCP), which is currently 5 years from the date of purchase of the land, not only will have their Banker’s Guarantee forfeited but an extension charge will be also levied on the extend period beyond the PCP They are also required to sell off all the units within 2 years from TOP
If the developer couldn’t meet the deadline, They will be subject to extension charge of % of the purchase price of residential land on pro-rated based on the proportion of unsold units:
- 1st year extension – 8%
- 2nd year extension –16%
- 3rd year extension – 24%
Banker’s Guarantee of 10% of purchase price of site shall be forfeited
What are the Conditions attached to a Qualifying Certificate (QC)?
- Complete the construction and obtain the Temporary Occupation Permit (TOP) or Certificate of Statutory
Completion (CSC) within 5 years from the date of issue of the QC or the Collective Sale Order (CSA) [whichever is later]
- Dispose of all the residential units within 2 years from the date of issue of the Temporary Occupation Permit (TOP) or Certificate of Statutory Completion (CSC) [whichever is earlier]
- Must not, without approval, change the shareholding of the housing developer after QC is issued
- Must not, without approval, sell the land in its vacant or undeveloped state
- Provide security (Banker’s Guarantee of 10% of the purchase price of land)
What if the housing developer is not able to complete the housing development within the 5-year period?
What if the housing developer is not able to sell all the units in the development within the 2-year period?
- The extension charge payable for an extension of time is
- i) 1st year extension: 8% of the purchase price of the land
- ii) 2nd year extension: 16% of the purchase price of the land
iii) 3rd & subsequent year extension: 24% of the purchase price of the land