If you are already intending to immigrate to and live in Singapore, then you are probably going to want to look at some long term residential decisions – namely, buying a property. If you are only going to be here for the short term for a few years, then rental is definitely the smarter option on the whole. But if you somehow decided to spend the rest of your life in Singapore, then purchasing a property is definitely the better decision.
Singapore has hefty stamp duties for foreigners
However, Singapore can have rather hefty stamp duties, especially for foreigners. For instance, as a foreigner, you are to pay 20% Additional Buyer Stamp Duty, also known as ABSD locally in Singapore, on the price of the property you purchase. To add onto that, Singapore’s properties are among the most expensive in the world, even compared to places like New York and Hong Kong.
A one bedroom condominium in the Central location can cost you around S$1.5 million. 20% stamp duties on that would mean an atrocious S$300,000! Even if you have the cash to burn, the issue is that this purchase price goes to absolutely nothing – the government. If you ever intend to sell your property, this extra amount you pay in the form of ABSD as a foreigner today will not be factored into the decision factor made by the buyer, as it is none of their business. So why waste that extra money?
There is a way for foreigners to avoid this – by becoming a permanent resident in Singapore
Now, the truth is that if there is no easy way around it, then yes, maybe you should just go ahead with the process. But, there is for those who are eligible to become a permanent resident in Singapore, and actually become one. And if you are even considering living in Singapore, and buying a private condominium at least, you are likely eligible to be a Singapore permanent resident. If you are not sure how to apply for a Singapore permanent residence, you can make use of a immigration consultant like Dream Immigration SG which specializes in Singapore PR application. Saves time and hassle for you.
For permanent residents’ first residential real estate purchase, the ABSD is just 5%. Compared to buying one as a foreigner, you save 15% on your first purchase. In the example we used above of a unit or house worth S$1.5million, your savings would be S$225,000! You could do a lot of things with that money! Even if you spent a whopping $25,000 to acquire your permanent residency, which you would not since most agencies only charge around S$3,000 to S$8,000 for most PR applicants, you would still have saved S$200,000.
Additional benefit of simply being a PR – you can easily reverse this PR status in future if required
Additionally, the benefit is that as a permanent resident of Singapore, you are not even changing your citizenship. You can easily renounce your Singapore PR if you ever wish to do so in future, and everything will be back to normal. Reversal is extremely easy, as compared to a full Singaporean citizenship. That is why most foreigners apply for permanent residence instead of citizenship in SG.