Good Class Bungalows FAQ
Good Class Bungalows (GCB) Questions:
Am I a foreigner person?
A Singapore Permanent Resident (PR) is considered a foreigner person.
Is there any restriction on the property that foreigners 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.
Since the second half of 2012, the government has generally not granted approval to foreigners to buy a landed home in a GCB Area. Landed residential properties in Singapore are generally the primary preserve of Singapore citizens.
A foreigner who wishes to purchase a landed residential property is required to seek approval under the Residential Property Act.
On mainland Singapore, the minimum criterion is that he or she must be a Singapore permanent resident (PR). In addition, each applicant is assessed on a case- by-case basis, taking into consideration factors such as his or her economic contribution in Singapore.
In general, on mainland Singapore, PRs are allowed to buy only landed residential properties which do not exceed 15,000 sqt in land area, and which are not within a GCB Area.
An Applicant wishing to buy a landed property within a GCB Area and /or exceeding 15,000sqft in land area will have to meet more exacting qualifying criteria, including that of having made exceptional economic contributions in Singapore.
Singapore permanent residents, such as the Dyson, need to get special approval from the government to purchase and own GCBs. Criteria include making exceptional economic contributions in Singapore and the buyer can only use the GCB for owner-occupation.
While anyone can buy a non-landed private home in Singapore, one generally has to be a Singapore citizen to be allowed to buy a landed property in a GCB Area.
As of 2019, In the past seven years, seven Singapore permanent residents who have made exceptional economic contributions to the Republic have been granted approval to buy a landed residential property in a GCB Area. Of these, four involved properties more than 15,000 sq ft in land area, said SLA’s spokesman.
Sentosa cove remains the only place in Singapore where a non -PR foreigner may buy a landed home, although this is still subject to government approval.
Can foreigners set up a property investment company in Singapore to invest in Good Class Bungalows (GCB)?
What if the purchase is done through a joint venture (JV) business entity registered in SG via a partnership or limited company between a Singaporean and a foreigners and what maximum stake can the foreigners have in the JV company to qualify it to buy landed properties?
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
A foreign company within the meaning of the Residential Property Act is a company that is not a Singapore company.
A Singapore company is one which is incorporated in Singapore and where all its directors and members/shareholders are Singapore citizens and if a member/shareholder is a company, it must be a Singapore company, and so on. The ultimate beneficiaries of the company must be Singapore citizens. Hence if the joint venture company have any foreigners at all, it will be classed as a foreign company, and in general cannot buy good class bungalow (GCB).
Can foreigners set up a trust structure in Singapore to invest in Good Class Bungalows (GCB)?
A buyer may use a trust structure to buy a property for legacy planning, for instance. This is when a property is bought with the aim of passing it down to a beneficiary who has not yet come of legal age for property ownership.
Using a trust structure to buy a property could also stem from the buyer wanting to keep his or her identity under wraps.
Under the Residential Property Act, a foreigner who wishes to purchase a landed residential property in Singapore must seek approval from the authorities.
A spokesman for the Singapore Land Authority (SLA), contacted by BT, said: “If a property is purchased under a trust arrangement, the party lodging the transfer (for the purchase of the property) is required to state the details of the beneficiaries.”
The purchase of a good class bungalow property by foreigners via a trust structure will require approval from the authorities, unless the beneficiary of the trust is a Singapore citizen.
Is the property investment company that they registered in Singapore exempted from the 20% stamp duty since it is a Singapore company?
From July 2018, buyers or transferees who are : Foreigners (FR) would have to pay ABSD of 20% on the purchase or acquisition of any residential property.
Entities would have to pay ABSD of 25% on the purchase or acquisition of any residential property, Plus additional 5% for developers.
What is the maximum loan that the Singapore company can qualify for?
Non-individuals/ entities maximum loan is capped at 15%.
Kindly advice on Additional Buyer’s Stamp Duty (ABSD) remission requirements for married couple.
ABSD remission may be applicable to a married couple who purchases a second residential property jointly, if the remission conditions are met. The couple must include a Singapore Citizen. The main conditions are as follows:
ABSD has been paid on the second residential property.
The first residential property (co-owned or separately owned) is sold within 6 months from the date of purchase of the second property for completed property or the issue date of the Temporary Occupation Permit (TOP) / Certificate of Statutory Compliance (CSC), whichever is earlier, if the property was uncompleted at the time of purchase.
The married couple has not purchased or acquired any other residential property since the purchase of the second residential property.
6 months is based on option exercised date.
It takes about 1 month for IRAS to process and for ABSD remission to be passed to law firm.
E.g. Husband is Singapore citizen. Wife is Foreigner ( NON PR).
Own 1 landed A in husband’s sole name.
If they buy landed B in Husband’s sole name, Husband Pays 12% ABSD as second property. Thereafter, Husband sells off landed A.
Can Buyers claim back 12% ABSD once landed A is sold ?
No, 12% ABSD cannot be claimed back. In IRAS eyes, Matrimonial property is a Property jointly owned in 2 names of husband and wife.
If property is in one name, It cannot be classed as Matrimonial property.
Also, even if a property can be classed as a Matrimonial property, the property A must be sold off within 6 months.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Singapore is an attractive destination to both local and foreign ultra-high net worth individuals, offering security, racial harmony, solid economic fundamentals, sound financial framework, relative resilience of Singapore dollar, ease of doing business, world-class education system, developed infrastructure and quality medical facilities – all these continue to make Singapore one of the choice locations for potential investors!
SELL/ BUY/ RENT- Good Class bungalows
Call me Serene Chua @ HP 98-199-199
for a non-obligatory discussion.
$$ Referrals Appreciated $$
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
