House & Rentals

 Renting in Singapore as a foreigner

In Singapore, the rental contract is usually full of terms not easy to understand, and if not careful, it may be the root of many rental nightmares. Be prepared for a whole set of acronyms. 

With the price of housing continuing to increase and many finding it unaffordable to buy a property in the current market, renting is increasingly becoming a popular option. 

Note that subletting an entire apartment requires permission from the Housing Development Board and that subletting a bedroom is only possible for 3-bedroom flats or larger ones. An entire unit would cost $2,500 (€ 2,230) to $3,500 (€ 3,120) per month on average to rent in Singapore, while a room can cost between $500 (€ 445) and $1,000 (€ 890). 

Different types of properties available for rent 

HDB Flats

You can rent either entire units or one bedroom. Usually, master bedrooms come with a bathroom en suite and therefore cost more than common rooms. 

Serviced Apartments

These usually have gyms, cafes, business centers, and cleaning services. The monthly rental prices for these typically range from $2,500 (€ 2,230) to $6,000 (€ 5,340) for a one-bedroom apartment, and $5,000 (€ 4,450) to $10,000 (€ 8,910) for a two-bedroom apartment.

Condominiums

These are properties with facilities such as security, gyms, and pools. Smaller condominiums may not have as many facilities. Monthly rental costs for condominiums typically range between $2,500 (€ 2,230) and $10,000 (€ 8,910) for entire units.

Penthouses

Penthouses often have their own pools, rooftop gardens, and terraces. The topmost of the high-rise buildings in Singapore. Rental costs typically range from $10,000 (€ 8,910) to $30,000 (€ 26,720) monthly.

Landed Property

Depending on the location and the size of the house, rents for landed property can vary from $10,000 (€ 8,910) to $30,000 (€ 26,720) per month. Landed property can be split into three main types:

• Terrace Houses: These are houses that share common walls with neighbors on both sides, unless at the end of a row.
• Semi-detached Houses: These houses share one wall in common with a neighbor.
• Detached Houses/Bungalows: These houses do not share any walls with other houses.

Furnished or unfurnished apartments?

Rental apartments come fully furnished, partially furnished, or unfurnished.

• Fully furnished, means the apartment comes with a complete set of furniture, appliances (e.g. television, microwave oven), and white goods (e.g. refrigerator, washing machine).
• Partially furnished means the apartment comes with essential white goods, lights, and curtains, but or little furniture.
• Unfurnished means the house is renovated but bare, perhaps only with the lights fitted. Of course, you can always request for the landlord to add items – these can all be negotiated before you sign the tenancy agreement and can be incorporated into the rent.

Naturally, fully furnished units and rooms will cost more than unfurnished properties.

Requirements and documents to rent

Once you have found your dream property it is time to gather all the necessary documents to finally sign the contract. 

Documents necessary to rent

• Letter of Intent

The Letter of Intent states your intention to rent the place and your requirements to the landlord. If you need repairs done, or new fitments, add them to this Letter of Intent. After the landlord signs the Letter of Intent, he is legally obliged to provide what you asked for.

A letter of intent needs to include the following clauses:

– Diplomatic or Repatriate Clause 

This applies to tenancy agreements with a tenure of over one year. If you are no longer employed or your workplace transfers you to another country, you can terminate the lease after 12 months, by giving two months’ notice. Your security deposit will be refunded to you. Most landlords will only include the diplomatic clause if the lease is more than a year. 

– Good-faith Deposit or Booking Deposit 

This is usually one month’s rent. When you find a place you like, both you and the landlord sign a “Letter of Intent” – and you may be asked to pay a “good-faith” deposit. After he’s signed the “Letter of Intent” and taken this deposit he cannot rent the property to anyone else. But you don’t lose this deposit money – it becomes part of your Security Deposit after the Tenancy Agreement is signed, or you can negotiate for it to be deducted from your first month’s rent.

– Security Deposit 

The standard practice in Singapore is usually one month’s rent for every year of your lease. You only pay it after you sign the Tenancy Agreement. The landlord keeps this money and can use it at the end of your lease to pay for repairs to the property if you damage it, or costs and expenses arising from you breaking the lease. Assuming there are no costs, you get the full amount of the security deposit back after you leave the apartment.

– Term of Lease 

In Singapore, the standard lease is more than one year, with or without an option to renew the lease. Most landlords won’t accept “short-term leases” for less than one year. After a year of renting a place, you can opt to renew a lease for another one to two years – but you need to give the landlord two or three months’ notice. 

• Tenancy Agreement

After the Letter of intent is signed the landlord prepares the Tenancy Agreement. You’ll pay any legal fees for this -they can range from nothing to a few hundred dollars. You need to prepare the rest of the security deposit and advance rental now. For a one-year lease – your security deposit will be one month’s deposit and one month’s advance rental. The Tenancy Agreement needs to include the following clauses:

– Details about Utilities, Telephone, and Cable Television bills

Installation charges (if any) and the monthly bills for these are usually the tenant’s responsibility, but you can sometimes negotiate to have some of these fixed bills to be included in your rental as part of a package. 

– Who Pays for Repairs and Maintenance 

You must maintain the apartment and do minor repairs at your own cost. In a standard agreement, this means you pay for repairs up to $100 (€89) or $150(€133).

Only major repairs and maintenance are the landlord’s responsibility provided the damage or malfunction of appliances is not caused by the tenant’s negligence. 

– Check The Rent Amount is Accurate 

Sometimes the landlord will divide the rent into the rent of premises, rent of furniture and fittings, and maintenance fees. Just make sure it adds up to the amount you agreed.

Rental process and rules

Once you are familiar with the options available, you can take the following steps to rent the property you are interested in.

1. Decide on your budget. Having a budget in mind will help you decide the type of property to rent, as well as its location. Ensure that your budget is flexible enough to prevent situations where you are unable to find a house that is both within your budget as well as in a specific location of your preference.
2. Decide on the type of property and the location. Factors to take into account when making this decision include the facilities you require, the public transport options, the age and number of family members, the distance to office or school districts and the amenities you would like, such as supermarkets and libraries.
3. Gather a pool of specific options. First, examine property websites to come up with a list of potential properties that fit your choices on location, budget, and other factors. 
4. Arrange for property viewings. Visit the shortlisted properties and take photos and notes on each to help you make a decision later. It is helpful to visit at different times of the day to get an idea of the neighborhood. 
5. Sign the Letter of Intent. Once you decide on the home you want to rent you usually then sign a Letter of Intent (LOI), which states your intention to lease, as well as any requirements you have. 
6. Sign the Tenancy Agreement: After signing the LOI and putting down a deposit, you will then sign the Tenancy Agreement. 

Rental contract and deposit

By convention (not law), the security deposit is one month’s rent for a one-year lease, or double that for a two-year lease. It will be refunded at the end of the lease, after deductions due to damages.

If there is any damage to the property the landlord can subtract the cost of damages from your security deposit. In general, the deposit is only used to cover damages for which you are directly responsible.

If there’s a premature termination of the lease your security deposit can be kept by the landlord. 

Buying a property as a foreigner

In 1973, the Singapore Government-imposed restrictions on foreign ownership of all private residential property in Singapore. Such ownership is governed by the Residential Property Act. Foreigners are not restricted from acquiring:

• Properties approved as a condominium development under the Planning Act
• A flat in a building of 6 levels or more including the ground level and any level below the ground level including HUDC Phase I, Phase II flats, and privatized HUDC Phase III and IV flats
• A leasehold estate in restricted residential property for a term not exceeding 7 years including any further term which may be granted by way of an option for renewal.

What are the restricted residential properties?

Foreign persons (including natural persons, foreign companies, and societies) are restricted from purchasing:

• Vacant land
• Landed residential property, such as bungalows, terrace houses, semi-detached houses
• Residential property in a building of fewer than 6 levels

Requirements to buy a property in Singapore

To buy a flat directly from HDB, or a flat from the resale market, you must be a Singapore citizen, must include another Singapore citizen or Singapore permanent resident to form a family nucleus. 

House prices in Singapore

The average cost of a home currently on the market in Singapore is S$2,080,533 ($1.520.968/€1.355.485).  HDB properties are the cheapest forms of housing available, costing an average of S$532,768 ($388,430/€345,070). 

• HDB Average S$532.768 ($389.430/€ 347,100)
• Condo Cost Overall S$1,780,051 ($ 130.115/€ 115,970)
• Landed S$5,063,507 ($ 370.124/€ 329,89)

Get a mortgage in Singapore

Foreigners can indeed apply for mortgages in Singapore. It’s worth noting that there are limits on the loan to value (LTV) ratio of your mortgage, as well as mandated minimum cash down payments.

The loan to value ratio is typically 75% for a first home loan (but depending on your age, it can be as low as 55%). The cash down payment required is typically 5%.

Process and steps to buy a house in Singapore

Step 1: Check if you need to pay taxes

Foreigners are required to pay Additional Buyer’s Stamp Duty (ABSD) when buying private property in Singapore.

SPRs buying their first residential property will need to pay an ABSD rate of 5% and 15% for their second and subsequent residential property.

Meanwhile, foreigners will need to pay an ABSD rate of 20% regardless of the number of residential properties purchased.

However, there is no need to pay ABSD for US nationals or nationals and Permanent Residents from Switzerland, Liechtenstein, Norway, and Iceland.

You also need to pay a Buyer’s Stamp Duty (BSD) and Mortgage Duty whether you are buying from the public or private housing markets.

Do also note you need to factor in legal fees and other administration fees.

Step 2: Hire an agent

An agent can help you scout for the best deals, do your financial calculations, settle your paperwork and other details. They will typically charge an agent fee of one percent.

Step 3: Apply for a bank loan

You can get up to 75% financing on the property’s purchase price for the first property and 55% for the second and subsequent property.

Bank loans are subjected to floating rates meaning their interest rate can go higher or lower.

You need to set aside at least 12 months of savings, just in case.

Step 4: Make an offer and seal the deal

Now that you have found your dream property in the HDB or private property market, it is time to seal the deal.

For HDB resale flats, you will need to log into the HDB Resale Portal with your SingPass.

You may refer to the resale procedure on the HDB website.

For condominiums, you will need to put down an option fee of 1% of the purchase price, secure financing, and pay the remaining option fee of 4% within a month.

After this, you will need to place a downpayment of 15% in cash and/or CPF for SPRs.

For foreigners, you will need to pay this in cash.

Subsequently, you need to pay the remaining 5% in cash while the rest will be loaned by the bank.

Guide to additional expenses when buying a home in Singapore

Before you even begin looking at the numbers, first off you need to prudently review your current financial status. Look at your existing debt obligations, ongoing loans, net monthly income, stability of work, and available savings. These are the following additional expenses to consider when buying a property in Singapore:

1. The option fee is normally 1% of the property’s agreed price.
2. The Offer to Purchase fee is 5% or 10% of the agreed purchase price.
3. Down payments may range from 10-20% depending on the developer.
4. Stamp Duty is a tax on documents relating to the purchase of a property 
5. The Additional Buyer’s Stamp Duty or ABSD is another tax that needs to be paid when purchasing a property in Singapore.
6. For securing mortgage documents, a tax rate of 0.4% needs to be paid to IRAS. 
7. Legal fees can cost anywhere from $2,500-3,000 (€2,230-2,670).
8. Valuation Fee” and it can be anywhere from $350-500 (€311-445)
9. Fire Insurance, This can range from $1.50 (€1,34) for a 1-room flat to $7.50 (€6,68) for an executive or multi-generation property; for five years
10. Administrative Fees, a $10 (€8,91) non-refundable payment
11. Service & Conservancy Charges, $55-95 (€49-85) per month
12. Maintenance Fees, $200-300 (€178-267) per month
13. Agent Fees, at least 1%

Utility companies: Electricity and gas

• Pacificlight Power (electricity)
• LYS Energy Solutions (electricity)
• RH Petrogas (gas)
• Powergas (gas)

One can expect to pay monthly bills of between $59-$120 (€52-107) if you live in an HDB flat, and between $120-$450 (€107- 400) if you live in a private property.

Utilities: Water

Water supply and sanitation in Singapore are characterized by a number of challenging environments that have been achieved in a relatively small country with geographical limitations. Access to water in Singapore is universal, affordable, efficient, and of high quality. Today, Singapore is internationally recognized as a model city for water management and an emerging Global Hydrohub. Singapore is home to over 70 local and international water companies and 23 research and development centers working on about 300 projects.

What you need to know

• The cost of healthcare has risen by 57.46% since 2000, and the average medical inflation rate was 2.3% per year.
• Note that in Singapore, there is a maximum loan you can take for your property, which is called the loan-to-value (LTV) ratio
• Transportation costs in Singapore can either be very affordable if you choose to use public transport or be a financial burden if you decide to own a car. 
• All Singapore residents have to pay income tax. You have to pay $200 (€178) if you only earned $30,000 (€26,720) for the entire year) to $36,550 (€32,560) if you earned $280,000 (€249,400).