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Property Fundamentals

    1.  Classification and Governing Body

Properties are generally classified as:  

a)     Residential.    Refers to properties for the purpose of residence (where people live).  

·         Landed residential property are residential units with individual ground contact.  It includes vacant land, detached and semi-detached houses, bungalows, terrace houses. 

·         Non landed or Strata titled residential property which includes flats, apartments and condominiums. 

b)    Commercial.   Refers to properties owned to produce income and/or used solely for business, trade in goods and services purposes.  It includes shopping malls, offices, convenience stores and restaurants and hotels. 

c)     Industrial. Refers to properties used as sites for production and warehousing. It includes factories and storage facilities. 

 

In Singapore, there 3 main governing bodies for properties matters are HDB, JTC and URA. A quick snapshot as follows: 

              i.        Housing and Development Board (HDB) regulates and administer the sales of new public housing (HDB flats) and commercial properties (HDB shop house). For more information and details, please refer to HBD website.     

             ii.        Jurong Town Coporation (JTC) regulates and administer the sales of industrial properties by the Government. For more information and details, please refer to JTC website.

            iii.        Private properties, be it residential, commercial or industrial are regulated by the Urban Redevelopment Authority (URA).  For more infromation, please refer to URA website

 

  2 。 Property Tenure 

Leasehold is a form of land tenure or property tenure where one party buys the right to occupy the land or building for a given period of time.   When the lease expires, ownership of the property reverts back to the freeholder.  The lease length may be extended by agreement with the Freeholder at a specified cost.  

Freehold gives outright ownership of the property and land on which it stands.  A freehold estate is where the owner of the land has indeterminate period of ownership. In Singapore, Fee Simple (or Grant in Fee Simple) and Estate in Perpetuity (Statutory Land Grant) are form of freehold estate.  Fee Simple owner does not pay ground rent while Estate in Perpetuity owner is subject to payment of ground rent.     

In the market, do take note that t here may be private freehold owners/developers selling their properties on leasehold term. Also t here may be  leasehold property tenure of 999 years being marketed as ‘freehold’.    

 

3.   Condominium versus Apartment 

A condominium is a type of residential property created under the Land Titles (Strata) Act, Chapter 158 and is also known as a "strata title property". Both condo and apartments are strata titled and both shared common facilities within the premises 

For a development to be granted a condominium status, the size of the site must be at least 40,000 sqft. Anything less than 40,000 sqft is classified as an apartment. Because of its bigger land area, condominium has a lot more common facilities than an apartment. Residents are expected to have complete access to all common facilities and areas such as gymnasium, BBQ area, swimming pool, etc…  

A condominium owner owns a share of the common facilities. Under the same Act, a Management Corporation (MC) needs to be created to manage the common property.  A condominium owner can be voted into the management council to have a say in the management of the common property.  An apartment owner has certain rights and obligations spelt out under the lease. However, An apartment owner is not able to participate in the management of the facilities.  

 

4.   Commercial versus Industrial 

The difference between commercial and industrial land is mainly one of use. Commercial areas are used for trading goods and services while industrial areas serve as sites of production. Commercial areas are most valuable when they receive heavy traffic from potential customers. Industrial areas, by contrast, benefit from easy and quick access to transportation. 

 

5.   Foreign Ownership Restriction 

For public housing, a SPR/foreigner must formed a valid family nuclues comprising of at least 1 Singpaore Citizen in order to buy a new BTO/DBSS/EC unit from HDB or a resale unit from the market.   A SPR couple cannot only buy a new HDB unit from the market, a SPR couple can only buy a resale HDB unit. 

There is no restriction for foreigners to purchase commercial and industry properties.  However, for private residential property, there are certain restrictions imposed by the Government since 1973.   Under the Residential Property Act, foreigners cannot purchase vacant residential land, landed property (detached house, semi-detached house, terrace house (including linked house or townhouse) unless prior approval is obtained from the Minister of Law.  For more details, see on FAQs on foreigner purchasing restricted residential property

 

 

6.  Minimum Occupation Period and/or Holding Period 

For Public HDB Housing, including Resale HDB flats as well as new BTO, EC and DBSS flats, there is a Minimum Occupation Period (MOP) of 5 years before the unit can be re-sold in the market. 

For private residential property, there is no minimum holding period (the interval between the acquisition and sale of property) or minimum occupation period for private property before a unit can be resold in the market.   

For foreigners who have obtained approval to purchase landed residential property, the sale of landed property is allowed only after a minimum occupation period of three years.  The only exception is landed property in Sentosa Cove. 

 

 

 

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External Links

1. Buying an Executive Condo

2. Hot/Value Property FACTS for Singapore Residents