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Jul 24, 2011

Singapore Landed Property

New Condo Launch: Singapore Landed Property

This residential property post on Singapore Landed Property is provided for information about Singapore landed property.

Source: The Business Times
Author: Michelle Quah

(SINGAPORE) The Singapore government has come out to say that landed property in Singapore will remain the primary preserve of Singaporeans.

In response to queries on the matter, Law Minister K Shanmugam told The Business Times that 'the government takes a strict approach towards ownership of landed property in Singapore by PRs (permanent residents)'.

He said that PRs today own only 3.5 per cent of landed residential properties in Singapore - and this includes the Sentosa Cove properties, for which the government had taken a decision to liberally allow purchase by foreigners.

Mr Shanmugam also said the ministry regularly reviews the rules to ensure that they are current and relevant.

The issue came under the spotlight after reports in this paper and in The Straits Times said that a high proportion of private homes are being snapped up by foreigners.

Citing a DTZ Research report, both papers said that foreign home buyers snapped up 16 per cent of all private homes sold in the first quarter, the highest quarterly percentage since data became available in 1995. The reports added that foreigners were also active in the last quarter of last year when they bought 13 per cent of all homes sold.

The report in The Straits Times prompted a response from a member of the public, Koh Chin Chin, who wrote to ST, saying she was shocked at the number of private homes sold to foreigners. She said 'it is high time the government stepped in to address this issue ... (and) limit the percentage of homes sold to foreigners'.

Mr Shanmugam's stand was unequivocal. 'The government believes that landed residential properties must remain the primary preserve of Singapore citizens, given their scarcity in Singapore,' he said.

He reiterated that only foreigners who are PRs can purchase landed residential properties in Singapore - and those who wish to purchase such properties must seek the approval of the Law Minister.

He said approvals are only given to applicants who are making a significant economic contribution to Singapore. Even then, each approved foreigner can only purchase one property.

The treatment is slightly different for the Sentosa Cove properties, where foreigners who are not PRs are allowed to purchase homes - but are restricted to landed property. He explained that the Sentosa Cove properties belong to the high-end segment of the property market, and are deliberately marketed as a unique, world-class development to attract famous, wealthy and influential persons to come to Singapore.

The minister went on to say that stringent conditions are imposed on approved PR purchasers of landed properties. For example, the property must be for owner-occupation, and cannot be sold within three years. This is to deter purchases for speculative purposes, he said.

Singapore citizens and PRs who renounce or lose their citizenship or permanent residency are also required to dispose of any interests they have in landed residential properties.

There are also severe penalties for those who breach these conditions. For example, a PR owner who rents out his landed residential property without approval now faces a financial penalty of up to three times the rental income earned over the period of breach, or $10,000, whichever is higher. A PR owner who disposes of a restricted property without approval during the non-disposal period now faces a maximum fine of $200,000.

These are enhanced penalties, which came into effect in January this year. The previous penalty for both offences was a maximum fine of $5,000 and/or a three-year jail term on conviction.

The DTZ Research report also said that Chinese buyers overtook Malaysians as the top buyers by accounting for 24 per cent of purchases made by non-Singaporeans in the first quarter of the year.

It went on to say that homes in District 16 - comprising Bedok and Upper East Coast - saw greater buying interest from foreigners compared with last year. And that District 18, including Tampines and Pasir Ris, and District 23 with Hillview and Choa Chu Kang were also increasingly popular.

The report said that foreigners bought more into the high-end market. They accounted for 21 per cent of all the homes sold for $1.5 million and above in the first quarter, up from a 17 per cent share in the previous three months.