Singapore Property FAQ

Yes, you may, but you have to engage a Lawyer to draft the Deed of Gift, and request for his advice on the effects and consequences of a gift of real property.

Transaction is Voidable

For gift of immovable property within 5 years from the date of the relevant bankruptcy application in which the grantor is adjudged bankrupt, the gift is voidable at the option of the Official Assignor (OA) who may apply to the Court for the relevant orders under the Bankruptcy Act (Cap. 20) subject to the relevant provisions of the Act. The gift may be set aside and form part of the estate of the bankrupt grantor, and the grantee will lose his rights to the property.

Mortgage

In view of the implications of a gift transaction, a Bank is unlikely to grant financing with the property as a security until more than 5 years has elapsed from the date of the Gift

CPF Charge

Where the property is subject to CPF Charge  and part of the interest in the property is to be transferred by way of gift, the CPF Board would, before consenting to the transfer, require, among other things, a statutory declaration from the donor of the gift to state that he was solvent at the time of making the gift and he has not become insolvent as a result of the transaction.

Because of the serious consequences, before any gift of real properties, it is important that you discuss your intended gift with your Lawyer, so that you are fully aware of the implications resulting from such gift.

Subsequent Sale

An owner of a property which is subject to transaction at an undervalue (including a gift) as referred to in section 98(3) of the Bankruptcy Act would find it difficult to sell the property within 5 years from the date of that transaction.

For a sale and purchase transaction governed by Condition 10.2 of the Law Society Conditions of Sale 2012, a buyer may rescind the purchase on that ground, which is to protect the buyer who may not have knew of the gift element prior to entering into the purchase. If there is a gift element or property subject to a transaction at a substantial undervaluation, the buyer would find it difficult to procure bank loan to finance the purchase price, and further, within a 5 years period from the date of that transaction, it remains voidable at the option of the Official Assignee as aforesaid.

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Caution: This article does not provide legal opinion nor is it comprehensive nor free from error, and reader should read with caution and not rely on the same. You should consult your lawyer if you have any specific legal issue.

This is a common issue raised, especially between co-owners of a property (real estate). An owner wishes to transfer his share (undivided half share or a % share) in the property without any consideration to his co-owner(s) and/or third parties (eg. his wife or his mother).

Usually there are 2 scenario, namely:-

(A) Property is subject to a Mortgage and/or CPF Board Charge
(B) Property is free from encumbrances (no Mortgage or Charge)

Please read our FAQ in respect of gift of property (real) under this section to under the implications of gifts (not exhaustive).

We shall now examine the 2 scenario.

(A) Property is subject to a Mortgage and/or CPF Board Charge

If your property is encumbered by a Mortgage (eg. mortgage loan from a Bank) and/or CPF Board Charge, then you should always check with the Bank or CPF Board before attempting to enter into a Deed of Gift of your share in the property.

In many cases, the Mortgagee (eg. Bank) is unlikely to accede to your request to transfer your share by way of gift due to the implications as discussed in the section.

Further, even in the unlikely event that the Mortgagee is agreeable, if you are no longer an owner in the property after the transfer, your Transferee(s) will need to procure the discharge of the existing Mortgage and a fresh Mortgage will need to be registered, and legal costs and expense will be incurred.

In order to avoid to need of obtaining consent from your Mortgagee, if you have the means, you may wish to repay the Mortgage loan and discharge the existing Mortgage, and then transfer your share in the property by way of gift under scenario (B) below.

(B) Property is free from encumbrances (no Mortgage or Charge)

Before attempting to transfer your share in a property by gift, please consider all implications relating to gifts.

Having considered all implications of gift of property, if you still wish to proceed, you should engage a law firm of your choice.

Generally, under scenario (B), the following may need to be done (not exhaustive or comprehensive):-

1.    Deed of Gift to be entered between the Transferor and the Tranferee
2.    Stamping (ad valorem) of the Deed of Gift based on the market value of that share of the property to be given. Parties are advised to obtain a valuation report on the market value of the property, so as not to under-declare the market value to the Commissioner of Stamp Duties (IRAS). Penalty may be payable for under-declaration of market value.
3.    Transfer instrument to be prepared and filed at the Singapore Land Authority with the relevant title document.
4.    Notice of Transfer to be lodged with the Comptroller of Property Tax, MCST (if any) and Tenant (if any).

Legal costs and expense will be incurred for the above process.

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Caution: This article does not provide legal opinion, and reader should read with caution and not rely on the same. You should consult your lawyer if you have any specific legal issue.

Where a Property Owner already owns a partial interest in a property (either as joint tenant or tenancy in common), the Additional Buyer Stamp Duty (ABSD) rate [based on 11 Jan 2013 Property Measure] applicable for the acquisition (eg. purchase) of additional interest in the same property will depend on the number of properties he already owns at the time of the acquisition.

Therefore, if a Singapore Citizen only owns a partial interest in 1 property, his acquisition of additional share in the same property would not be subject to ABSD. But if he already owns partial interests in both properties A and B, his acquisition of additional share in property A or B or both would be subject to ABSD rate of 7% as he owns 2 properties at the time of the acquisition of additional interest.

If a Singapore Permanent Resident only owns a partial interest in one property, his acquisition of additional interest in the same property would be subject to ABSD at 5%. But if he already owns partial interests in both properties A and B, his acquisition of additional share in property A or B or both would be subject to ABSD rate of 10% as he owns 2 properties at the time of the acquisition of additional interest.

[Caution Note: the above may be inaccurate and/or contains errors, and kindly do not rely on the same without obtaining proper legal advice based on your scenario. Please note that government policies and laws change from time to time. If you chose to rely on the above information, you are doing so at your own risk.]

Singapore Government has on 11 January 2013 introduced a slew of measures to dampen the demands of private and public housing, and also industrial properties. Housing loan measures are also introduced.

Despite the last anti-speculative measures in 2011, demands for private and public residential properties have continue to rise, and prices of private properties in sub-urban areas have also risen.

Additional Buyer’s Stamp Duty (ABSD) rates will be raised between five and seven percentage points across the board. The new measures will come into effect on 12 January 2013. Refer to table attached.

Sources (IRAS):

IRAS Annoucement: 11 January 2013 Singapore Property Cooling Measures (effective date: 12 January 2013) 
Details of the ABSD measures: Annex 1
Housing Loan measures: Annex II
Public Housing measures: Annex III and Annex IV
e-Tax Guide on ABSD (Revised)
Seller’s Stamp Duty Measures on Singapore Industrial Properties

IRAS Annoucement: 11 January 2013 Singapore Property Cooling Measures (effective date: 12 January 2013)
Details of the ABSD measures: Annex 1
Housing Loan measures: Annex II
Public Housing measures: Annex III and Annex IV
e-Tax Guide on ABSD (Revised)
Seller’s Stamp Duty Measures on Singapore Industrial Properties

Applications to buy vacant land will not be favourably considered. Applicants are advised to buy built-up property or a property under construction.

It means all residential landed properties, including vacant land, detached houses, semi-detached houses, terrace houses; and any land or building zoned or gazetted for residential purposes.

Approval will have to be obtained from the Minister for Law to purchase any of the above.

If the shophouse (mixed commercial and residential use) is not strata subdivided and is in an area zoned for commercial use, it is not a ‘residential property’ within the meaning of the Residential Property Act.

If the shophouse (mixed commercial and residential use) is not strata subdivided and is in an area zoned ‘residential’ within the meaning of the Residential Property Act, it is a restricted residential property.

Your lawyers will be able to advise you based on the Chief Planner, URA’s reply on the zoning and approved use of the property. 

Foreign person as defined in the Residential Property Act includes:

1. person who is not a Singapore citizen
2. a foreign company; and
3. a foreign society

A foreigner may buy the following types of properties:-

1. a flat or apartment in a building (irrespective of levels) (including an HUDC Phase I or Phase II flat and a privatised Phase III or IV flat). However, the foreigner may not buy all the units within a Development.
2. an unit in an approved condominium development.
3. a leasehold estate in a property defined as “residential property” for a term not exceeding 7 years including any further term which may be granted by way of an option for renewal.
4. a HDB flat purchased directly from HDB*
5. a resale HDB flat where HDB has consented to the sale*
6. a HDB Shophouse*
7. an Executive Condominium purchased under the Executive Condominium Housing Scheme Act*

NOTE: Properties (4) to (7) above are not under the purview of the Residential Property Act. Intended purchasers of these properties are required to enquire directly with the Housing And Development Board regarding their eligibility