Key Restrictions and Guidelines for PRs
1. Waiting Period for HDB Purchase
PRs cannot buy a Housing Development Board (HDB) flat immediately after obtaining their PR status. They must wait for three years before being eligible to purchase a resale HDB flat. Notably, PRs are not allowed to buy new Build-To-Order (BTO) flats.
2. Loan Restrictions
While Singaporean citizens can access HDB loans, PRs must rely solely on bank loans for financing their HDB purchases. This can affect the affordability and financial planning for PR buyers, as bank loans often have different terms and interest rates compared to HDB loans.
3. Rental Regulations
PRs are restricted from renting out an entire HDB flat. However, they are allowed to rent out individual rooms within their HDB flat. This regulation helps ensure that HDB flats, which are subsidized public housing, are primarily used for owner-occupation rather than investment purposes.
4. Home Improvement Program (HIP) Subsidy
The Home Improvement Program (HIP) offers significant subsidies to Singaporean homeowners (up to 95% subsidies) for upgrading essential features such as toilets, water pipes, and main doors. PRs, however, are not entitled to this subsidy and must pay the full cost of any HIP upgrades.
5. Ownership of Private Property
PRs must dispose of their HDB flats within six months of purchasing any private residential property. This ensures that HDB flats remain accessible to citizens and do not become a tool for property investment by PRs.
6. Landed Property Restrictions
PRs require approval from the Land Dealings Approval Unit (LDAU) of the Singapore Land Authority (SLA) to purchase landed properties in Singapore. This approval is typically granted on a case-by-case basis, considering factors like the PR’s economic contributions to Singapore and the duration of their PR status.
7. Loss of PR Status
If a PR gives up their PR status, they must dispose of any HDB flat or landed property they own. This ensures that such properties remain within the pool accessible to citizens and long-term residents committed to staying in Singapore.
8. Inheritance of Restricted Properties
PRs cannot inherit restricted properties (e.g., landed properties or residential units with commercial elements on the ground floor) unless they receive specific approval from the Singapore Land Authority. This rule helps regulate the ownership of high-value or strategically significant properties.
9. Resale Restrictions
PRs cannot sell restricted properties within the first five years of purchase, even if they are willing to pay the Additional Buyer’s Stamp Duty (ABSD). This cooling measure helps stabilize the property market and prevent speculative buying.
10. Stamp Duties
PRs are subject to ABSD on property purchases. The ABSD rates for PRs are 5% for the first residential property and 30% for the second property. These rates are part of Singapore’s property cooling measures to curb excessive investment demand and maintain housing affordability for citizens.
How to Buy Property as a PR
When buying property, PRs should consider the following steps:
- Determine Eligibility: Ensure you meet the necessary criteria, such as the three-year waiting period for HDB resale flats.
- Arrange Financing: Since PRs cannot take HDB loans, securing a bank loan and understanding the terms and conditions is crucial.
- Understand Stamp Duties: Calculate the Buyer’s Stamp Duty (BSD) and ABSD applicable to your purchase. For instance, a PR buying a $1 million property will need to pay an ABSD of $50,000 in addition to BSD.
- Seek Approval for Landed Properties: If purchasing landed property, apply for LDAU approval and prepare to demonstrate significant economic contributions to Singapore.
How to Sell Property as a PR
When selling property, PRs should:
- Ensure Compliance with MOP: Make sure the property has met the Minimum Occupation Period (MOP) requirements, especially for HDB flats.
- Be Aware of Resale Restrictions: Understand the five-year holding period for restricted properties before attempting to sell.
- Plan for Stamp Duties: Be aware of any Seller’s Stamp Duty (SSD) that might apply if selling within the stipulated holding period.
Navigating the property landscape in Singapore as a PR requires careful planning and adherence to regulations. By understanding these guidelines, PRs can make informed decisions and avoid pitfalls in their property transactions.
For further detailed guidelines, consult sources like the Inland Revenue Authority of Singapore (IRAS), Housing & Development Board (HDB), and Singapore Land Authority (SLA).