ST : Foreign landed home owners: new rules

Oct 19, 2010

Foreign landed home owners: new rules

PRs, citizens who give up status have to sell property within 2 years

By Jessica Cheam



HOME owners with that prized landed property address may have to dispose of their property within two years if they give up their Singapore permanent residency or citizenship status.

Failure to do so could see owners faced with a fine not exceeding $20,000 or a three-year jail term, or both.

There is no such requirement currently. This new rule is one of the proposed changes set out in the Residential Property (Amendment) Bill, introduced in Parliament yesterday. If passed, the new Bill will also stiffen penalties.

The Act, first introduced in 1973, imposes restrictions on foreign ownership of restricted properties, namely landed homes, strata-landed housing and vacant residential land.

Foreigners - who must be permanent residents in this case - must get approval from the Singapore Land Authority before buying such 'restricted' properties.

The penalties have not been revised since 1974. The new Bill will introduce harsher penalties for those who breach the rules.

Under the Act, foreign buyers can only purchase one landed home for owner-occupation and cannot rent it out.

He must also sell his existing property before buying a new one, and is not allowed to sell the property in the first few years of ownership. The exact period depends on whether the property is still under construction or completed.

Owners found to breach the above rules will be fined up to $200,000 - up from $5,000 previously, with a new fine introduced of $2,000 per day for any continuing offence.

Another change requires a foreigner who inherits a landed property to sell it off within five years instead of 10 years.

Rules for foreign private developers will also change. A developer is considered 'foreign' if it has any foreign shareholders or directors, so this includes major developers here such as public-listed developers CapitaLand, Keppel Land and City Developments.

Under existing rules, they have to complete their developments within a certain timeframe and sell all units within two years of receiving the Temporary Occupation Permit.

Under the Bill, developers may be charged a fee for any extension of time beyond the given period, similar to rules under the Urban Redevelopment Authority's Government Land Sales programme.

Managing director William Wong of RealStar Premier Property, a landed home specialist, did not think the proposed changes would have a big impact on the landed housing market, noting that 'most PRs who relinquish their status do try and sell their homes when they leave Singapore anyway'.

jcheam@sph.com.sg