Investing in Property in Singapore – Singapore Property Tax & Buying Guide

For most ordinary Singaporeans who aren’t COEs, ministers, investment bankers or heart surgeons, there are two main ways to get rich quick—win the lottery, or buy Singapore property and hope its value skyrockets.

Investing in property is one of the most popular ways to grow your money in Singapore, not least because it’s one of the things you can spend your CPF savings on.

For those of you who are considering buying a second home as an investment property in Singapore, this guide is for you.

How do you make money from property in Singapore?

When Singaporeans buy property, they generally expect its value to increase over time. This rise in value or price is known as capital appreciation, and is one key way to make money out of your property.

For instance, if your home was worth $500,000 when you bought it and is now worth $900,000, that’s capital appreciation of $400,000.

When you sell your property for more than you paid for it, you are enjoying capital gains, which are the result of capital appreciation.

As such, it is important to look out for factors that can encourage greater capital appreciation somewhere down the road, such as upcoming MRT stations or infrastructure improvements.

The second key way to make money out of your property is through rental income.

To find out your rental yield, simply add up all the rental income you’d earn a year, and then convert it into a percentage of your property value.

So for instance, if you’re buying an $800,000 property and renting it out for $5,000 a month, you’d earn $60,000 of rent per year. Your rental yield would thus be 7.5% ($60,000 x 100 / $800,000).

Obviously, the higher the rental yield the better, as it means you’ll be getting a higher return on your investment even before you sell the property. Many buyers also channel rent received into paying their home loan.

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What affects Singapore property prices?

Whether you’ve heretofore been investing in stocks, gold, ETFs or designer handbags (hey, we never said you had to be smart to be invest), your basic goal is the same as any other investor’s—to get back more money than you originally spent on the investment.

In the context of the property market, that means buying when prices are low or at least reasonable, and selling when they’re higher.

To that end, it’s useful to know six major factors that affect property prices in Singapore:

Location and infrastructure

Improved transport infrastructure, or the building of nearby amenities like shopping malls, prominent schools and public libraries can push up property prices. As a general rule, improved transport infrastructure especially can have a huge effect on property prices especially when it comes to new MRT stations within walking distance.

State and condition of the property

The state and condition of the property, especially when it is old, can affect the purchase price. For instance, landed properties require a lot of maintenance, and when they fall into disrepair can be very costly to fix up, which in turn lowers the selling price. Conversely, if you recently renovated your property in a palatable style, that can warrant a rise in your asking price.


Much of Singapore’s residential property is leasehold, with the most common lease duration being 99 years. As time barrels towards the tail end of a lease you can expect a sharp drop in the value of the property. Freehold property retains its value much better over time, but is a lot more expensive to purchase upfront.

Interest rates

Right now, interest rates in Singapore are very low. That means you it costs less to take out a loan when you buy a home. As a general rule, higher interest rates tend to discourage people from buying property, which has a negative impact on prices.

Government policies

The government can step in at any time with policies designed to have an impact on property prices. The cooling measures they put in place beginning in 2009 have suppressed prices considerably.

Economic climate

In a recession, you can expect demand for and prices of property to fall as people tighten their belts, while the reverse is true in times of prosperity.

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Restrictions and cooling measures in Singapore

In order to discourage speculation, the government has put in place certain rules that make it less profitable for people who are selling their properties in the short term, or who wish to buy multiple properties.

When evaluating a potential property investment, be aware of the following cooling measures:

ABSD – Additional Buyer’s Stamp Duty

ABSD will need to be paid if you are already the owner of an existing property and wish to buy another, or if you are not a Singapore citizen. ABSD rates are as follows:

Buyer ABSD rate
Singapore Citizen buying first residential property NA
Singapore Citizen buying second residential property 12%
Singapore Citizen buying third and subsequent residential property 15%
Singapore PR buying first residential property 5%
Singapore PR buying second and subsequent residential property 15%
Foreigners buying any residential property 20%

SSD – Seller’s Stamp Duty for residential property

If you are selling property before you’ve held it for more than 3 or 4 years, you might have to pay SSD.

Date of purchase Holding period SSD rate (on actual price or market value, whichever is higher)
Between 14 Jan 2011 and 10 Mar 2017 Up to 1 year 16%
More than 1 year and up to 2 years 12%
More than 2 years and up to 3 years 8%
More than 3 years and up to 4 years 4%
More than 4 years No SSD payable
On and after 11 Mar 2017 Up to 1 year 12%
More than 1 year and up to 2 years 8%
More than 2 years and up to 3 years 4%
More than 3 years No SSD payable

TDSR – Total Debt Servicing Ratio

The amount of money you can borrow from the bank is capped by (amongst other things) the TDSR, which dictates that your total monthly repayments of your home loan and any other loans (including credit card debt) must not make up more than 60% of your income.

Thus, it is a good idea to avoid getting into credit card debt or taking out hefty loans like car loans just before you are about to apply for a home loan.

LTV – Loan-to-Value Ratio

The LTV ratio, like the TDSR, imposes limits on how much you can borrow from banks to finance your property purchase.

Unlike ABSD, which is tied to the number of properties under your name, LTV ratio relates to the number of outstanding mortgages you’re servicing. The more home loans you need to service, the less you can borrow from a bank.

Conversely, no matter how many properties you own, as long as you’ve paid them off fully you can borrow the maximum amount.

Here are the latest LTV ratios, revised as of July 2018:

Number of mortgages LTV ratio
1st mortgage 75%
2nd mortgage 45%
3rd mortgage onwards 35%

There are slightly different rules for HDB and private property purchases. If you are purchasing an HDB flat, these LTV ratios apply for bank loan tenures up to 25 years. If you’re buying private property, it’s for tenures up to 30 years.

Should your bank loan tenure be longer than that, or if your debt will eat into your retirement years (age 65 and up), the LTV ratio will be smaller so you can borrow less.

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Property tax in Singapore

Property is a great asset to have in Singapore, but you will have to share some of your wealth with the state. Property is taxed differently depending on whether you are an owner-occupier (ie. you are living in the property being taxed) or not.

Note that property tax is charged on the ANNUAL value of your property. If you’re not sure what the annual value of yours is, you can check through the IRAS link provided.


For owner-occupiers, tax rates are as follows.

Annual value ($) Tax structure Owner-occupier tax rate Property tax payable
Up to $55,000 First $8,000 0% $0
Next $47,000 4% $1,880
$55,000 to $70,000 First $55,000 See above $1,880
Next $15,000 6% $900
$70,000 to $85,000 First $70,000 See above $2,780
Next $15,000 8% $1,200
$85,000 to $100,000 First $85,000 See above $3,980
Next $15,000 10% $1,500
$100,000 to $115,000 First $100,000 See above $5,480
Next $15,000 12% $1,800
$115,000 to $130,000 First $115,000 See above $7,280
Next $15,000 14% $2,100
Above $130,000 First $130,000 See above $9,380
Above $130,000 16%


Buying residential property solely as an investment with no intention of living there? You will be charged the following tax rates.

Annual value ($) Tax structure Non-owner-occupier tax rate Property tax payable
Up to $45,000 First $30,000 10% $3,000
Next $15,000 12% $1,800
$45,000 to $60,000 First $45,000 See above $4,800
Next $15,000 14% $2,100
$60,000 to $75,000 First $60,000 See above $6,900
Next $15,000 16% $2,400
$75,000 to $90,000 First $75,000 See above $9,300
Next $15,000 18% $2,700
Above $90,000 First $90,000 See above $12,000
Above $90,000 20%

Non-residential properties

Non-residential properties like commercial (eg. offices) and industrial (eg. factory or warehouse space) are taxed at 10% of the annual value.

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How to find property for sale

So, you’ve saved up enough cash and you’re ready to buy your first investment property. Before you dial that real estate agent’s number you found on Facebook, know that’s not the only way to find property. Here are some common ways Singapore buyers look for suitable properties.

Property listings

Websites like the following contain property listings which have been posted by sellers or their agents:

Note that on online property portals, prices are almost always jacked up because the seller expects you to negotiate.

You can also find property listings the old-fashioned way, by looking through the classifieds section in the newspapers. However, as fewer and fewer people are advertising their properties in this way, the bulk of your research should still be done online.

Sales launches

If you’re looking for brand new property to purchase, you should scout out sales launches being held by developers, usually before construction on the property has even started. You’ll be able to look at models and mock-up images of the property.

The purchase process of uncompleted property is much longer than it is for completed or resale property, as you will pay in stages as the property is being built.

This also means you won’t be able to earn rental income for the property until it is fit for vacant possession, which might be years after you’ve made the downpayment.

Property auctions

These can a good place to pick up a good deal. All you have to do is find out where auctions are taking place, and then turn up in person to bid.

The sellers are usually either banks that have foreclosed on property, or sellers and developers who are trying to get rid of property fast.

There will be a few properties put up for auction at each event, and a reserve price will be set, indicating the lowest acceptable bid.

Make sure you do your price research before bidding on a property, as reserve prices are not always significantly lower than what you might find on the market.

Property agents

The laziest way to find property is to hire a property agent to do the work for you. Agents can scout for properties according to your criteria and then ferry you around in their cars for viewings.

The main downside is that you’ll have to pay the agent commission, typically about 1%, if you are hiring them to act for you in your capacity as a buyer.

Note that agents are only allowed to collect commission from either the buyer or the seller. So if the agent is acting for the seller, you won’t have to pay commission, but he or she will only be able to show you properties being sold by his or her existing clients, rather than source for properties across the entire property market.

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