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In Singapore, owning a private property is a highly coveted dream for almost any hardworking Singaporean. As one of the most expensive countries in the world to live in, aspiring residential property owners spend years doing their research, financial planning and other preparations to make the dream work.
So before you even set your eyes on a property, you will need to consider your eligibility status and other requirements: Are you within the required debt to income ratio? How much home insurance should be taken into consideration? And most importantly, can PR buy landed property in Singapore?
Read also: Can Foreigners Buy Landed Property in Singapore
1. You need to be a Singapore Citizen (SC) or a Singapore Permanent Resident (PR)
Owning a landed property in Singapore is a right and privilege granted to both citizens and permanent residents. This means that a Singapore Citizen or SCs and permanent residents are allowed by the government to acquire the full slate of landed properties such as bungalows, semi-detached houses, terrace houses and cluster housing.
Foreigners or expats, on the other hand, are only permitted to buy executive condominiums and other similar living space properties.
Read Also: Can Singapore PR buy Executive Condominium (EC) Units?
Meanwhile, non-local individuals wishing to own a landed property in the country will have to be a permanent resident for 5 years before they can apply for a permit. These applications will then be reviewed by the government based on individual economic contributions and will be assessed on a case-to-case basis.
2. Your debt-to-income ratio should be 60% and below
Apart from your citizenship and residence status, another important requirement when owning a landed property in the country is your debt to income ratio. This means that, assuming you have joint mortgages, your total household income or total combined salary will be considered.
This will be followed by the debt-to-income ratio for handling monthly debt repayments, a figure that can be calculated by summing up the monthly debt obligations and dividing it with your base salary.
Buyers with debt-to-income ratios of 60% and below are permitted to apply for mortgages on properties. This is allowed as long as the loans borrowed do not surpass 75% of the total property value.
3. You are prepared to spend 110% more on home insurance
Property buyers are also advised to consider additional fees and duties when snapping up their coveted real estate. This involves the downpayment of 25% of the property’s value, stamp duties, legal fees, evaluation fees and even the Additional Buyer's Stamp Duty or ABSD. Energy to home insurance costs should also be taken into consideration.
Compared to average HDB and condominium owners, landed property owners in Singapore are expected to shell out 100% on home insurance and other home improvements such as renovations and furnishings. This is why all aspiring buyers are heavily advised by real estate experts to examine all financial costs and carefully assess their property rights before deciding to buy and sign a contract.
4. You are included within the top 5% of earners
While not necessarily a marker of eligibility for property ownership, a high monthly income will still guarantee you to be able to afford and buy a wider range of landed properties in the country. This includes property types such as terrace homes, bungalows and cluster houses.
For example, an average monthly income of up to S$34,646 per household is considered to be within the top 5% of earners in Singapore.
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