Landed Rules and forms

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Additional Conveyance Duties ACD Flowcharts

Additional Conveyance Duties ACD Flowcharts

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TOTAL DEBT SERVICING RATIO (TDSR) AND LOAN TO VALUE (LTV) RATIO

The TDSR sets limits on how much a home buyer can borrow.
Financial institutions must ensure that borrowers’ monthly repayment for all debts does not exceed 60 per cent of their monthly income.This includes the mortgage, credit card bills, car loans, personal loans, and so on.
The LTV ratio refers to the ratio of the home loan to the value of the property.
What’s the change: There is no change to the 60 per cent threshold, but it will no longer apply to mortgage equity withdrawal loans with loan-to-value ratios of 50 per cent and below.
These refer to loans which allow borrowers to use residential properties as collateral to get cash. This change will benefit asset-rich but cash-poor retirees.

LOAN TO VALUE (LTV) LIMITS

Loan to value (LTV) is the housing loan quantum a bank or financial institution is willing offer as a percentage of the property’s valuation. LTV limits were tightened in 2013.
LTV is now up to 80 per cent of the property’s value but subject to TDSR. It also depends on whether this is your first, second or subsequent mortgage and your
loan tenure.
For example, a buyer looking for a second housing loan, and one that extends beyond 30 years or his retirement age (set at 65), can only borrow up to 30 per cent of the value of the property, subject to TDSR.
What’s the change: No change.

ADDITIONAL BUYER’S STAMP DUTY (ABSD)

ABSD is levied on Singaporeans who already own one residential property, as well as foreigners and permanent residents buying residential properties.
The rate ranges from 5 per cent for permanent residents buying their first residential property to 15 per cent for foreigners buying any residential property,
according to the Inland Revenue Authority of Singapore website.
It is 7 per cent for a citizen buying a second property and 10 per cent for the third or subsequent property.

SELLER’S STAMP DUTY (SSD)

Property owners who sell their homes within the specified holding period will have to pay the SSD. This applies to homes bought on or after Feb 20, 2010.
The SSD rate is tiered according to how long the property has been held before being sold.
What’s the change: The following changes apply only to homes bought on or after March 11, 2017.
The SSD holding period will be cut to three years, down from four. This means properties sold more than three years after purchase will not attract SSD.
The SSD rates will also be lowered by four percentage points for each tier.
For example, currently, the seller of a property held for for one year or less will have to pay 16 per cent in SSD. With the change, this will be lowered to 12 per cent.
A seller of a house held for three years ago or less will pay 4 per cent, down from 8 per cent.

Additional Conveyance Duties (ACD) Provision

1. What is a Qualifying Acquisition/ Disposal? 

A qualifying acquisition happens when equity interest in a PHE (i.e. the target entity) is acquired and the buyer (with any associates):

  • is already a significant owner of the PHE before the acquisition; or
  • becomes a significant owner of the PHE after the acquisition.

Each qualifying acquisition is subject to ACDB. It does not apply to equity interest acquired before 11 Mar 2017.

A qualifying disposal happens when the seller (together with any associates) is a significant owner of the PHE and the equity interest of the PHE disposed of:

  • was acquired on or after 11 Mar 2017; and
  • disposed of within 3 years of acquisition (holding period) on a first-in-first out basis.

2. What is a Property-Holding Entity (PHE)?

A PHE is a property-holding entity whose primary tangible assets (owned directly/indirectly) are Singapore residential properties. A PHE can be a Type 1 PHE, a Type 2 PHE or both.

Type 1 PHE means the target entity whose market value of the residential properties makes up at least 50% of the value of its total tangible assets (TTA).

Type 2 PHE means the target entity:

  • Which has 50% or more beneficial interest (directly or indirectly) in one or more entities (henceforth referred to as “related entities”) which is a Type 1 PHE; and
  • the sum of the market value of the residential properties beneficially owned by the target entity and its related entities is at least 50% of the TTA of the target entity and its related entities.

3. Who is a Significant Owner of a PHE?

A significant owner of a PHE refers to a person or entity who beneficially owns at least 50% equity interest or voting power in a PHE either on its own or with its associates.

4. Who are Associates?

In determining whether the 50% ownership threshold for significant ownership is met, the equity interest of the buyer’s and seller’s associates will be taken into account. In certain scenarios, the associates’ equity interests will also be included in the tax computation.

Example of associates:

Where the buyer/seller is an individual, his/her associates include:

  1. family members such as grandparent, parent, child, grandchild, sibling and spouse, or
  2. partners in a partnership, limited partnership or limited liability partnership

Where the buyer/seller is an entity, its associates include:

  1. subsidiaries which the entity beneficially owns 75% or more voting capital and more than 50% voting power in,
  2. holding entities which beneficially owns 75% or more voting capital and more than 50% voting power in the entity
  3. other entities in the group that is an associated subsidiary to a common holding entity which meets condition ii.
  4. partners in a partnership, limited partnership or limited liability partnership

5. What are the Additional Conveyance Duties?

In addition to existing stamp duty on shares, the Additional Conveyance Duties (ACD) that will apply on qualifying transfer of equity interests in PHEs are:

  1. Additional Conveyance Duties for Buyers (ACDB):
    1. Existing Buyer’s Stamp Duty at 1% to 3%
    2. Additional Buyer’s Stamp Duty at 15% (flat rate)
  2. Additional Conveyance Duties for Sellers (ACDS):
    1. Seller’s Stamp Duty at 12% (flat rate)

ACD will be levied on the prevailing market value of the Type 1 PHE’s underlying residential property at the time of the qualifying equity transfer, pro-rated by the percentage of the beneficial equity interest transferred in the Type 1 PHE.

Dutiable Documents relating to Property-Holding Entities

Dutiable documents relating to transfer of equity interest in Property-Holding Entities (PHEs) include the following:

  1. Contract or agreement for sale and purchase;
  2. Assignment or transfer;
  3. Gift;
  4. Settlement; and
  5. Declaration of trust

Where there is no document executed for the transfer of scripless shares, Stamp Duty is not payable.

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Landed Property Rules

Application for Foreign Person Purchase

  1. What are restricted properties?

    Restricted properties include:

    1. vacant residential land;
    2. terrace house;
    3. semi-detached house;
    4. bungalow/detached house;
    5. strata landed house which is not within an approved condominium development under the Planning Act;
    6. townhouse;
    7. residential shophouse;
    8. association premises;
    9. place of worship; and
    10. worker’s dormitory/service apartments/boarding house (not registered under the provisions of the Hotels Act).

     

  2. What are the criteria for approval?
    1. you must be a permanent resident of Singapore; and
    2. you must make adequate economic contribution to Singapore.

     

  3. Can I apply even though I do not have a property in mind?

    Yes, you may apply for an approval in-principle. In fact, you are encouraged to do so before entering into any contract to purchase a restricted property so as to avoid any forfeiture of monies paid in the event you are not granted approval to acquire the property.

    If approval is granted, you have to submit the details of the property you intend to purchase within 6 months from the date of the letter of approval. Otherwise, the approval will lapse and you will have to make a fresh application. There is no extension of validity for the approval in-principle granted.

  4. What is the processing time?

    About 20 working days from the date all information and documents are received by us. The processing time includes verifying the information with other agencies, checking if the applicant or his spouse owns restricted property, as well as the assessment of the application by the Residential Property Advisory Committee before the final recommendation is sent to the Minister for consideration.

  5. Is there any restriction on the property that I can buy?

    Yes. The land area of the property must not exceed 1,393.5 sq metres or 15,000 sq feet. In addition, the property must not be situated within a good class bungalow (GCB) area.

  6. What are the conditions of approval?

    The conditions are that –

    1. you shall use the property solely for your own occupation and that of the members of your family as a dwelling house and not for rental or any other purpose;
    2. you shall not dispose of the property within 5 years from the date of legal completion of the purchase of the property or, if the property is under construction, 5 years from the date of issue of the Temporary Occupation Permit or Certificate of Statutory Completion (whichever is issued earlier) for the property; and
    3. you shall not subdivide the property without approval.

     

  7. Can I buy vacant land to build my house?

    Yes. If approval is granted, you will be required to complete the construction of the dwelling house on the property within 3 years from the date of the letter conveying the decision.

  8. I own a restricted property. Can I apply to purchase another restricted property?

    Yes, you may, provided you have fulfilled the 5-year non-disposal condition. However, if you are granted approval for the purchase, you will be required to dispose of your existing restricted property as follows:

    1. on or before the date of legal completion of the purchase of the new property; or
    2. within 3 months from the date of issue of the Temporary Occupation Permit or Certificate of Statutory Completion (whichever is issued earlier) if the property is under construction; or
    3. within 3 months from the date the seller delivers vacant possession of the new property for which the Temporary Occupation Permit has been issued but separate title has not been issued yet.

Application for Foreign Person Purchase (Sentosa Cove)

  1. Can I apply even though I do not have a property in mind?

    Yes, you may apply for an approval in-principle. In fact, you are encouraged to do so before entering into any contract to purchase a restricted property so as to avoid any forfeiture of monies paid in the event you are not granted approval to acquire the property.

    If approval is granted, you have to submit the details of the property you intend to purchase within 6 months from the date of the letter of approval. Otherwise, the approval will lapse and you will have to make a fresh application. There is no extension of validity for the approval in-principle granted.

  2. What is the processing time?

    About 20 working days from the date all information and documents are received by us. The processing time includes verifying the information with other agencies, checking if the applicant or his spouse owns restricted property, as well as the assessment of the application by the Residential Property Advisory Committee before the final recommendation is sent to the Minister for consideration.

  3. Is there any restriction on the property that I can buy?

    Yes. The land area of the property must not exceed 1,672.3 sq metres or 18,000 sq feet.

  4. What are the conditions of approval?

    You shall use the property solely for your own occupation and that of the members of your family as a dwelling house and not for rental or any other purpose.

  5. I own a restricted property. Can I apply to purchase another restricted property?

    Yes, you may. However, if you are granted approval for the purchase, you will be required to dispose of your existing restricted property on or before the date of legal completion of the purchase of the new property.

  6. What are the penalties if I breach the condition?

    Depending on which condition is breached, you may be required to pay a financial penalty or be liable, upon conviction by a court, to a fine of up to $200,000 and/or imprisonment for a term of up to 3 years.

Application for Foreign Entity Purchase

  1. What are restricted properties?

    Restricted properties include:

    1. vacant residential land;
    2. terrace house;
    3. semi-detached house;
    4. bungalow/detached house;
    5. strata landed house which is not within an approved condominium development under the Planning Act;
    6. townhouse;
    7. residential shophouse;
    8. association premises;
    9. place of worship; and
    10. worker’s dormitory/service apartments/boarding house (not registered under the provisions of the Hotels Act).

     

  2. Can a foreign entity purchase residential property?

    Yes, subject to approval. The entity is required to submit an application. A non-refundable application fee is payable.

Application for Variation of Condition

  1. Under what circumstances can I apply for a variation of condition?

    When approval is granted to you, the approval is subject to certain conditions. If you are unable to fulfil those conditions or wish to deviate from the conditions, you are required to submit an application. A non-refundable application fee is payable.

    Examples of when a condition has to be varied:

      1. you wish to carry out additions and alterations or reconstruction or tear down the existing dwelling house on the property to rebuild a new dwelling house;
      2. you had indicated in your application that you wished to carry out additions and alterations or reconstruction to the property at the time of application but changed your mind after approval was granted;
      3. you wish to change the manner of holding of the property to vary the shareholding with the co-owner;
      4. you are unable to complete the construction/reconstruction/additions and alterations

    within the given time;

    1. you are unable to sell your existing property within the given time; or
    2. you wish to change the shareholding in the housing developer company.

     

Application and Cancellation of Clearance Certificate

  1. What is a Clearance Certificate?

    A Clearance Certificate allows a Singapore company/limited liability partnership/society to acquire and retain residential properties subject to the provisions of the Act.

  2. Who can apply for a Clearance Certificate?
    1. Companies incorporated in Singapore, all of whose directors are Singapore citizens and all of whose members are Singapore citizens/Singapore company/Singapore Limited Liability Partnership;
    2. Limited Liability Partnerships (LLP) incorporated in Singapore, all of whose partners are Singapore citizens/Singapore LLP/Singapore company; and
    3. Societies incorporated in Singapore, all of whose members are Singapore citizens and all of whose trustees are Singapore citizens or a trust company licensed under the Trust Companies Act.

    You can submit an online application.  A non-refundable application fee is payable.

  3. What if the entity decides to admit a foreign person?

    If the entity does not own any restricted property, it can apply to cancel the clearance certificate using Form CC (Singapore company and Singapore limited liability partnership) or Form CC (Singapore society). A non-refundable application fee is payable.

    If the entity owns restricted property, it must apply to become a converted foreign entity before it admits the foreign person. The form for this purpose is Form CF (Singapore company and Singapore limited liability partnership) or Form CF (Singapore society). A non-refundable application fee is payable.

Application for Conversion to Foreign Entity

  1. What if the entity is granted approval to become a converted foreign entity but not allowed to retain its restricted properties?

    It would be required to dispose of the restricted properties within 2 years from the date it becomes a converted foreign entity.

  2. What if the entity had admitted foreign persons without first obtaining approval?

    The entity would have committed an offence and, upon conviction, be liable to a fine not exceeding $50,000.

    In addition, the officers of the entity would also have committed an offence and upon conviction, be liable to a fine not exceeding $50,000 or to imprisonment for a term not exceeding 3 years or to both.

    Unless approval has been granted, the entity is also required to transfer all its restricted properties to Singapore citizens or approved purchasers within a year of it becoming a converted foreign entity.

Application for Acquisition by Personal Representative and Beneficiary

  1. Can a foreign person acquire restricted property as a beneficiary through inheritance?

    Yes, subject to approval. He is required to submit an application. A non-refundable application fee is payable. The application will be assessed based on the same criteria for an application to purchase a restricted property.

  2. If the foreign beneficiary is not allowed to acquire restricted property through inheritance, what happens to his beneficial interest?

    The Personal Representatives (i.e. executors or administrators) of the deceased’s estate must dispose of the foreign beneficiary’s interest in the property within 5 years from the date of death of the deceased.

  3. Can a Personal Representative, who is a foreign person or entity, acquire legal title to the property as a Trustee or Executor?

    Yes, subject to approval. He is required to submit an application. A non-refundable application fee is payable.

  4. What if the Personal Representative is unable to dispose of the foreign beneficiary’s interest in the property within 5 years?

    He can apply for an extension of time to do so. The form to use is Form ST. A non-refundable application fee is payable.

Application for Qualifying Certificate

  1. Who can apply for a Qualifying Certificate (QC)?

    A housing developer who intends to purchase restricted property to construct flats or dwelling house for sale.

    A housing developer means –

    1. an individual who is not a Singapore citizen; or
    2. a foreign company, a foreign limited liability partnership or a foreign society; or
    3. a Singapore company, limited liability partnership or society which is not holding a clearance certificate.
  2. How to apply for a Qualifying Certificate?

    You are required to submit the Form QA. A non-refundable fee is payable.

Application for Appeal

  1. Can I appeal if my application is not successful?

    Yes, you may appeal within 3 months from the date of the letter informing you of the decision. You are advised to appeal only if there are new substantial grounds not previously brought to our attention.

     

    Footnotes :

    (1) An entity means a person who is not an individual.
    It includes the following:
    •An unincorporated association
    •A trustee for a collective investment scheme when acting in that capacity
    •A trustee-manager for a business trust when acting in that capacity
    •The partners of the partnership whether or not any of them is an individual, where the property conveyed, transferred or assigned is to be held as partnership property

    (2) From 12 Jan 2013, buyers or transferees who are : FR and entities would have to pay ABSD of 15% on the purchase or acquisition of any residential property.

    (3) Non-individuals/ entities maximum loan capped at 20%.

     

     

     

    Foreigners Face Tougher Rules When Buying Landed Homes
    By iCompareLoan Editorial Team
    Posted on 19-Aug-2013

    The Singapore Land Authority (SLA) revealed that the number of permanent residents granted approval to buy landed homes on mainland Singapore has dropped sharply since 2011, following the tightening of eligibility criteria.

    Since then married PR couples with children who are also PRs made up two-thirds of approved applicants. SLA also added that Singaporean-PR couples’ applications are generally regarded favourably to keep them rooted to the country.

    Market watchers believe that rules were further tightened in the second half of last year to extend the holding period of the property from three years to five years. Furthermore, PRs were barred from acquiring landed homes in the Good Class Bungalows (GCB) area.

    According to SLA in 2010 the number of approvals was 145; in 2011 it fell to 117, and finally only 31 last year. In the first half of this year, only six applications were approved. However these figures exclude the landed homes in Sentosa Cove.

    Landed homes in Singapore fall under the purview of the Restricted Residential Property Act, and foreigners acquiring these houses have to obtain prior approval from the Minister for Law.

    The application process usually takes about 6 weeks.

    But from August 2004, the Government announced a relaxation of these rules for landed homes on Sentosa Cove, in order to attract affluent foreigners. Specifically the approval time can be as quick as two days. In addition, landed homes on Sentosa Cove is exempted from a couple of the rules governing foreigner ownership in the mainland.

    At A Glance

    1. Landed Homes on Mainland Singapore

    Only Permanent Resident (PR) foreigners are allowed to buy
    Maximum land area of 1,393.5 sq m (15,000 sq ft)
    Excludes Good Class Bungalows (GCB) area (permitted previously)
    Minimum occupation period of five years (up from three years previously)
    For owner occupation only (i.e. No renting out)
    Allowed to buy only one landed home at any one time whether on the mainland or Sentosa Cove.

    2. Landed Homes on Sentosa Cove

    Foreigners and PRs are allowed to buy
    No minimum occupation period
    For owner occupation only (i.e. No renting out)
    Allowed to buy only one landed home at any one time whether on the mainland or Sentosa Cove
    Based on caveats lodged with Urban Redevelopment Authority (URA), the proportion of PRs and foreigners buying landed homes has indeed fallen since 2011. In 2012, they made up 1.6% and 1.05%, respectively, of total buyers, down from 3.35% and 1.95% in the preceding year.

    In absolute terms, the number of PRs and foreigners buying landed homes has been steadily declining as well in tandem with the fall in the total number of landed home purchases. The anomaly is in 2011 when the proportion of foreign buyers more than doubled to 65 (1.95%) from 27 (0.62%) in the previous year.

    Table 1: Purchase of Landed Homes (includes Sentosa Cove) by PRs and Foreigners

    Source: URA

    Table 1 Purchase of Landed Homes (includes Sentosa Cove) by PRs and Foreigners

    Table 1 Purchase of Landed Homes (includes Sentosa Cove) by PRs and Foreigners

Property Registration Forms

Approved Forms for use under the Residential Property Act

Visit : https://www.sla.gov.sg/ldau/
Form A Application by foreign person(s) for approval to purchase, acquire or retain residential property under section 25 of the Residential Property Act
Form FC Application by a foreign company for approval to purchase or acquire residential property under section 25/30 of the Residential Property Act
Form FS Application by a foreign society for approval to purchase or acquire residential property under section 25/30 of the Residential Property Act
Form FLLP Application by a foreign limited liability partnership for approval to purchase or acquire residential property under section 25 of the Residential Property Act
Form B Application for clearance certificate by a Singapore company under section 10 of the Residential Property Act
Form C Application for clearance certificate by a Singapore society under section 16 of the Residential Property Act
Form B (LLP) Application for clearance certificate by a Singapore limited liability partnership under section 11 of the Residential Property Act
Form CC Application to cancel clearance certificate by a Singapore company under section 10 of the Residential Property Act or by a Singapore limited liability partnership under section 11 of the Residential Property Act
Form CS Application to cancel clearance certificate by a Singapore society under section 16 of the Residential Property Act
Form CFC Application by a Singapore company or limited liability partnership with residential property for approval to become a converted foreign company or converted limited liability partnership respectively and to retain its residential property under section 26 of the Residential Property Act
Form CFS Application by a Singapore society with residential property for approval to become a converted foreign society and to retain its residential property under section 26 of the Residential Property Act
Form QC Application for qualifying certificate by a housing developer under section 31(2) of the Residential Property Act
Form RQ Application by a housing developer to retain flat or dwelling house under sections 31(4) and 25 of the Residential Property Act
Form UC Application by a foreign person / company for approval for change of existing use of property to residential purposes under section 28 of the Residential Property Act; or Application by a foreign person / company for approval for residential development on land deemed non-residential under section 28A of the Residential Property Act
Form VC Application for variation of condition under the Residential Property Act
Form ST Application by personal representative of a deceased person’s estate for extension of time to dispose of foreign beneficiary’s estate and interest in the deceased person’s residential property under section 3(5) of the Residential Property Act
Form AP Appeal to the Minister under section 25(12) of the Residential Property Act
Form
(Sentosa Cove)		 Application by a foreign individual to purchase/acquire a restricted residential property at Sentosa Cove under section 25 of the Residential Property Act

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