Rules For Singaporeans And PRs Buying Overseas Property

· Buying A Property

Purchasing Overseas Property

General Rules and Regulations

1) HDB owners who wish to invest in overseas residential properties can only do so after fulfilling the Minimum Occupation Period (MOP)

In general, HDB flat owners must occupy the flat for a minimum period of five years before they can sell the flat in the open market, rent out the whole flat, and invest in private property – both local and overseas. The MOP is applicable for both new and resale flats, and starts from the date you take possession of your flat.

There is no limit on the number of private properties you can acquire once you fulfill your flat’s MOP, and the private residential property acquired can be still under construction or ready for possession.


2) HDB owners who wish to invest in overseas non-residential properties can do so even before fulfilling the MOP

Non-residential properties are typically lumped under commercial real estate, which comprises the following property types: industrial, retail, offices, shophouses and mixed-developments.

Commercial properties can generally achieve higher rental yields. However, they also tend to be more volatile as the performance of a commercial property is closely tied to the growth of its sector. For example, if an industrial property is occupied by semiconductor manufacturers, then it will be closely tied to the performance of industry exports.


3) For HDB owners who are Singapore PRs, you will be required to sell your flat within 6 months of acquiring a residential property – both locally and overseas

As a HDB flat owner, you can choose to buy private residential properties locally or overseas if you fulfil the eligibility conditions that apply to your flat. This includes the five-year MOP.

However, if all owners of the flat are Singapore PRs, and you have already fulfilled your flat’s MOP, you will be required to sell your flat within 6 months of acquiring your completed/uncompleted private residential property.


4) You can’t use your CPF savings to buy overseas properties

CPF savings can only be used to buy properties in Singapore. A downside to this is that you will be required to fork out a heftier initial cash outlay for your purchase of overseas properties. This also decreases your ability to acquire such properties as you will have less monies to contribute to the purchase.

However, properties in emerging markets tend to be priced considerably lower than properties in Singapore. In any case, it is important to first perform your financial assessment to find out your affordability and payment capacity before making a decision.


5) You may get a loan from a local or an overseas bank

When obtaining financing for an overseas properties, buyers have a choice of taking a loan from either a local bank or a bank in the host country of your foreign property purchase. Some important things to note include interest rates, the loan currency and loan limits.

If you take up a loan from a local bank, you should be mindful that the Total Debt Servicing Ratio (TDSR) will apply. However, not all banks in Singapore offer overseas property loans, and many who do tend to offer such loans only for a handful of developed countries such as Australia or the United Kingdom. Further, some banks offer overseas property loans only for purchase of properties in certain cities within a country.

In such cases, the buyer will have to take up a loan from a bank in the host country of their foreign property purchase. One downside to this is that interest rates from overseas banks do tend to be higher. Generally, your loan-to-value limit will depend vary between different banks and countries, and can range between 50% and 80%.


6) Properties located outside of Singapore are excluded from your ABSD count

All residential properties located outside of Singapore are excluded from your ABSD count.


7) If you own residential property overseas, you will need to sell it within 6 months of buying a HDB flat

Concurrent ownership of residential properties during the MOP is not allowed. As such, you will have to dispose your private property within 6 months of the effective date of purchase of your HDB flat. This applies to both private residential properties located in Singapore or overseas.

You will also have to serve a five-year MOP before you can re-enter the market to purchase a second residential property.



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