Buying Guide: Purchasing Properties
Basic Factors to Consider
Some of the factors you may need to consider before purchasing a home are:
• Budget
• Commuting plans
• Type of property you are looking to purchase
• Additional facilities
The most important question to consider is: what is your budget for purchasing a home? This will help you in determining the type of residential property you are eligible for.
However, if you do not have a specific budget constraint, then you might want to decide what type of residential property is suitable for you and your family based on the following factors such as commuting plans, neighboring schools around the desired property (if you have children), and the proximity to amenities such as shopping malls, MRT, bus stops, supermarkets and etc.
Financing Your Home
It is advisable to finance the purchasing of a home using a bank loan, especially if you have limited excess funds. For this, it is recommended that you decide first on the type of residential property you are looking for, and ensure that it is within your budget. If you have engaged a real estate agent or a solicitor to act on your behalf, check with them on all fees payable so as to prepare a more accurate estimate of your overall budget.
Banks will also charge an administrative fee for processing a mortgage, as well as an additional fee for valuing a property. When applying for a mortgage, the amount you will ultimately be allowed to borrow will depend on your own individual financial circumstances and the bank's valuation of the property or the actual transaction price, whichever is lower. The bank will also take into consideration your ability to make the monthly instalments to repay the loan, as well as your credit history.
Singaporeans are usually allowed to borrow up to a maximum of 75 percent of the property value, while foreigners may be granted a loan of up to 50 per cent to 60 per cent of the property value or purchase price. Some foreigners may be allowed to borrow up to a maximum of 70 per cent, depending on their credit standing and their ability to provide evidence of having established funds, but this approval is only granted on a case-by-case basis.
If you are buying a Housing Development Board (HDB) flat, you may want to look into applying for a HDB loan. HDB offers concessionary loans to first-time home buyers and second-time home buyers, who are upgrading to another HDB flat. DBSS (Design, Build and Sell Scheme) and BTO (Built to Order) flats are also available and applicable to Singaporeans only. (Visit the HDB website here)
Payments
Under the Standard Payment Scheme, you will make a total of 10 different payments.
1. The first payment to be made is the booking fee, which is typically between five per cent and 10 per cent of the purchase price.
2. After signing the Sale and Purchase Agreement, you will be required to make a down payment of 20 per cent of the purchase price, less the option fee.
3. Upon completion of the foundation work, you will be required to make a payment of 10 per cent of the purchase price.
4. You will have to make another payment of 10 per cent of the purchase price, following the completion of the unit's reinforced concrete framework.
5. Once the brick walls of the unit have been completed, you are expected to make a payment of five per cent of the purchase price.
6. Another payment of five per cent is due upon completion of the unit's roofing and ceiling.
7. After electrical wiring, internal plastering, plumbing and door and window frame installations have been completed, you will be required to make a payment of five per cent.
8. Following completion of the car park, roads and drains, you will have to make another payment of five per cent.
9. Upon receiving a Notice of Vacant Possession, you will be required to make a payment of 25 per cent of the purchase price.
10. On the completion date, you will have to make payment on the remaining 15 per cent. Besides the purchase price, there are other costs which you are likely to incur such as property taxes and maintenance charges. If you are a non-Singaporean citizen, do note that you will be taxed differently from that of a Singaporean citizen, in accordance with the Inland Revenue Authority of Singapore's (IRAS) regulations. (Visit the IRAS website here)
Notice of Vacant Possession
When the unit is ready to be handed over, the housing developer will issue you a Notice of Vacant Possession. The housing developer must also provide you with a copy of the Temporary Occupation Permit or Certificate of Statutory Completion as well as a copy of a certificate by an architect or a professional engineer, who can verify that all works have been completed in accordance with the approved plans and specifications.
Expatriates in Singapore
Expatriates in Singapore on employment / professional visit passes could apply for their children for admission to the government or government-aided schools through the Ministry of Education (MOE). If there are vacancies, they need to obtain student passes from the Immigration Department. School fees in such schools are much lower than in private schools. The students in local schools are usually Singaporean origin whereas students in International Schools consist of students from all over the world. Information and procedure of enrolling into a local school are listed below. Admission of Foreign Students to Government, Government-aided, Independent Schools, Junior Colleges and Centralised Institute.
Applications for school admission of foreign students must be made using the prescribed form obtainable from the foreign student information website or the schools (ie Government/Government-aided/Independent schools/Junior colleges/Centralised institute). For information on school admission of foreign students, you may visit foreign student information website at http://www.moe.gov.sg/esp/foreign/
Defects
There is a defects liability period of 12 months from the date you receive your Notice of Vacant Possession from the housing developer. During this period, the housing developer has an obligation to rectify any defects in the housing project which become apparent.
You should inspect your unit thoroughly as soon you take possession of it. If you discover a defect, inform the housing developer in writing and request that it be rectified. The housing developer is obliged to rectify any defect within one month of receiving notice.
If the housing developer is unable to rectify the defect within one month of receiving notice, you may notify the housing developer in writing that you intend to engage a third party to carry out the necessary repairs and provide the estimated costs of the repair works.
You should not include any defects in this notification that were not mentioned in the previous notice to the housing developer. If any new defects are found, you should inform the housing developer in writing first before allowing a one-month period for rectification works.
Following the second notification, you should allow the housing developer an additional period of 14 days to perform the necessary repairs. If the housing developer still fails to do this, you may proceed with the repair works and make a claim for the costs from the housing.
Pet Relocation
There are certain restrictions imposed for the relocation of a pet brought from places other than England, Ireland, Australia and New Zealand. These pets are quarantined for around thirty days. The completed license has to be submitted two weeks in advance before the import. An amount of S$50 is charged for every pet.
There is also a ban on Pit Bulls, Tosas, Akitas, Dogo Argentinos, Fila Brazilieros and Neapolitan breeds in Singapore. The Animal, Meat & Seafood Regulatory Branch in the Singapore government can be approached for obtaining detailed information on import regulations.