Selling a Property in Singapore

The process involved in selling a property in Singapore: who to contact, how to find an agent and what paperwork to complete...

Find information below on how to accept an offer, which taxes need to be paid (including stamp duty, property tax and goods and services tax) and CPF considerations.

If a property agent has been engaged ask for a Comparative Market Analysis (CMA). The CMA will show the sale prices of similar properties in the area within a certain time frame.

If an agent is representing the property the seller isn't required to be at any viewing.

The Council for Estate Agents (CEA) is government body which regulates the real estate agency industry . Estate agents must register with the CEA and pass an industry examination. The CEA also engages in public education efforts, helps consumers in property transactions and assists in disputes between agents and consumers.

Accepting an Offer

Make sure that there are no unacceptable conditions attached to an offer. Make sure the agent is aware of the eligibility of the buyer and clear on the completion period.

It is advisable to appoint a solicitor to check that all the transfer and sales documents are in order and protect the seller's interests. The solicitor also usually holds the buyer's deposit for the seller while negotiations are going on.

Buyers who are interested in the property will draw up an Option to Purchase (OPT), and present it to the seller's solicitor, with a deposit of one percent of the purchase price. The buyer then has 14 days to decide whether or not to proceed with the purchase and to organise finance. There will not be a caveat on it at this stage but the seller can't sell to anyone else.

As soon as the finance is arranged the buyer will then exercise the Option to Purchase and put down a deposit of five to ten percent. Their solicitor will draw up a Sales and Purchase Agreement and send it to the seller's solicitor for agreement.

Once the Option to Purchase has been signed it is unconditional on both sides. If the seller wishes to pull out they have to return the ten percent deposit inclusive of interest. The buyer risks losing their deposit if they pull out.

The vendor has the right to seek recourse through the courts if the buyer pulls out, in the same way that the vendor cannot pull out or they may also risk being sued. This means a seller cannot decide to pull out and sell to someone else.

In the event that the buyer (or seller) breaks the agreement, the other party has the right to pursue the matter legally.  Ordinarily, the seller’s solicitors will hold a deposit against the Option to Purchase or Sales and Purchase Agreement, in order to clear any remaining mortgage costs, CPF charges, or legal requisitions by the government.

Buyer and seller should arrange a date for inspection of the property before completion of the sale and confirm which items are included in the sale price.

Once the details of the Sales and Purchase Agreement have been agreed by both the seller and the buyer the documents will be signed by both and a date for Completion set.

Completion

The seller must hand over the property upon legal completion as agreed in the contract. Some private properties will be sold with existing tenants in place but most will be handed over vacant.

Taxes

Notify IRAS within one month of the sale or transfer if a property is sold or transferred. If using a lawyer, remind the lawyer to submit the Notice of Transfer via e-Notice of Transfer to IRAS. However, if the property is a HDB flat, the IRAS does not need to be told of the transfer as HDB will notify IRAS of any resale of flats.

Stamp duty

Stamp duty is payable on the documents completed when a property is changing owner. It is calculated on the value of the purchase price or the market value, depending on which value is greater.

  • Information on stamp duty from the Inland Revenue Authority

Seller’s stamp duty

Residential properties bought on or after 20 February 2010 and are sold within four years are subject to seller’s stamp duty (SSD).

  • Detailed information can be found on the Information page Property taxes

Rebates and reliefs

If a seller is eligible for owner-occupier's concession or vacancy refund and has not applied for the claims, applications must be submitted at least six weeks before the property is transferred. IRAS will not accept claims for owner-occupier's concession or vacancy refund after the seller ceases to be the owner of the property.

Payment of property tax

Property tax is payable yearly in advance, and the deadline is in the months of January. Tax apportionment is agreed between the seller and buyer. IRAS does not apportion the taxes. If property tax has been for the whole year, the seller can arrange for the buyer to reimburse the property tax that has been paid for the period after the transfer of the property. In most instances, a lawyer would apportion the tax liability between the seller and the buyer during the completion of the sale. To encourage home ownership, new tax rates were introduced by the IRA in January 2015. Residential properties occupied by the owner now have a lower tax rate than residential properties that are not occupied by the owner.

If paying property tax by GIRO, settle the outstanding amount in full immediately, to avoid payment of a 5 percent charge on the value of the outstanding tax.

The GIRO arrangement will be terminated automatically when IRAS update the ownership records upon the sale of the property.

Gains from the sale of property

The gain derived from the sale of a property is a capital gain, and thus not taxable.

Goods and services tax

Currently Goods and Services Tax (GST) is not levied on private real estate transactions. However, as some residential properties (such as a shop with a flat above) may involve a commercial component, legal assistance may be valuable.

Central Provident Fund (CPF) Considerations

If CPF savings have been used to buy a property, the money plus accrued interest must be returned to the CPF account when it is sold.

It will not be necessary to refund to the CPF account upon the sale of a property if the vendor is leaving Singapore or West Malaysia permanently.

Should the vendor want to reinvest in property the CPF savings can be re-used and the accrued interest refunded to the buyer's CPF account.

  • For more information and enquiries, contact the CPF
    Tel: 1800 227 1188
    Fax: 6229 3355
    email

Further Information

Find reputable Property: Buying & Selling agents through our local business listings

Picture courtesy of the Singapore Tourism Board