There are two main types of land properties in Singapore when it comes to property ownership: Freehold, and Leasehold. The main difference between the two lies in the ownership of the land where the landed property sits on.
Freehold refers to the type of landed residential property that is most commonly known, as both the house and the private property it is built on are owned by one person or entity. 80% of landed housing in Singapore are under a freehold status, but that doesn't stop freehold from being the ideal and preferred form of property ownership.
Buyers and sellers of freehold properties will need to visit the Singapore Land Authority to process documents, though some real estate agents are capable of processing the documents for you.
As seen in any HDB flat, leasehold refers to properties where the owner of the land and the homeowner are separate entities. The homeowner may own the house, condo unit, or apartment, but the HDB in Singapore owns the land where the property is built on. A leasehold landed property is generally more affordable than a freehold, but the risk lies in the duration of the land lease.
In the case of HDB, their properties are set at a 99-year lease, supposedly outliving the occupants staying in the unit. However, at the end of the lease period, the land owner has the right to take the land back, or renew the lease as they please. Often, the lease extends beyond one generation of land owners, and complications may arise in a leasehold landed property in cases of disagreement on lease renewal.
Besides ownership, there are a few types of landed property designs and layouts that buyers can choose from based on their preference: Terrace House, Semi-detached House, Bungalow, and a Good-class Bungalow (GCB). The last one being the type of mansions you'd see in Crazy Rich Asians.
Prices are dependent on the type of house, ranging from S$1,800,000 all the way to a whopping S$110,000,000 for an average GCB!
Terrace houses are part of a line of houses with at least three units per line. Terrace houses share walls with their neighbours, and middle units share both sides of their walls with their neighbours on the left and right of the house.
Semi-detached houses come in a pair, where both houses are conjoined by one wall, keeping both units completely separate in accessibility and space. Often, this type of housing would mirror each other, especially when the units come as fully furnished.
A bungalow, also called a single detached landed house or a free-standing house, does not share any walls with neighbouring houses, and often have yards and gardens that fence around the house for a completely private property.
The grandest of all Singaporean properties, a GCB has a minimum of 1,400sqm of land space, and is reserved for the high-rollers of Singapore. Buying landed property like a GCB can set you back millions, as the properties are considered the most luxurious housing in Singapore.
Any Singapore citizen with an adequate budget is allowed to own land title in the country. However, there are extensive documents needed to prove capability of payment, deed of sale, and other proof of legitimacy from the buyer in order for the property sale to push though.
Approval for buying properties in Singapore has a couple of requirements to approve your landed property transactions:
Additionally, foreigners may also purchase properties in Singapore with approval under the Residential Property Act, but are limited to condos and not land title. However, there are a couple of factors to consider, as buying properties, even a non-landed property, as a foreign citizen is a much more difficult process than for Singaporean citizens. A foreign citizen refers to anyone who is NOT:
There are three main ways to pay for a property in Singapore, these include Cash, CPF Funds, and a Housing Loan. To buy landed property, buyers must have proof that they can secure payment for the landed home, be it a cash account, or an approved bank loan from any reputable financial institution.
There are also some fees that will need to be paid for when buying a landed home. One is the Option Fee, which will be paid for the Option to Purchase the property. A buyer will also need to pay deposits, stamp fees, and of course, the purchase price.
Is it better to buy a freehold or a leasehold property?
The answer really depends on you! Are there currently favourable freehold properties in the property market, or are the leasehold properties more worth their value? Most landed properties are ideally freehold, but leasehold properties are often more affordable and can have long leases that can outlive your stay in the property.
What is the difference between a terrace type house and a semi-detached one?
The main difference is the number of houses lined up together. Terrace types usually have three or more houses, sandwiching the middle houses together. A semi-detached home would have only two houses mirroring each other, so the space often feels bigger.
What type of houses or properties can foreign citizens buy?
This is a bit confusing, but generally foreign persons can buy most condominium types, as well as some landed housing as long as they seek approval from governing bodies before they make the purchase. A foreign person can also look to buy one of the landed houses on Sentosa, or an executive condominium unit that is more than 10 years old.