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A 10-step guide to selling your Residential Property in Singapore

  • By Lawhub
  • 2 min read
A 10-step guide to selling your Residential Property in Singapore

A 10-step guide to selling your Residential Property in Singapore

Selling your residential property is one of the most significant capital decisions of anyone’s life. And so researching every aspect of the real estate market is pivotal.

In this guide, we will accentuate step by step process of selling your residential property in Singapore. Before that, it is imperative to understand the kinds of residential property in Singapore:

  1. Government-run Housing Development Board or HDB;
  2. Private Property; and
  3. Executive Condominiums, or ECs, are public and private housing hybrid.

Table Of Content

What is an HDB Residential property in Singapore?

HDB residential properties in Singapore refer to public apartments managed by the  Housing and Development Board. HDB flats are the most ordinary form of housing in Singapore and are designed to meet the housing needs of the majority of Singaporeans.

HDB flats are generally more affordable than private properties and come with various benefits, such as subsidies and grants for eligible buyers. However, restrictions on the resale, transfer, and rental of HDB flats do not apply to private properties.

What is a Private Residential property in Singapore?

Private housing properties in Singapore include

  1. Condominiums/Apartments
  2. Terrace houses
  3. Semi-detached houses
  4. Bungalows
  5. Landed properties (such as good-class bungalows and cluster houses)

These properties are owned by private individuals or companies rather than the government-run Housing Development Board (HDB).

What is a Hybrid residential property in Singapore?

In Singapore, “hybrid” residential properties refer to a combination of private and public housing, usually in the form of Executive Condominiums (ECs). ECs are a type of housing similar to private condominiums but with certain restrictions, such as eligibility criteria and resale conditions. They are designed for the sandwiched class, who cannot afford private properties but earn too much to qualify for public housing. ECs offer the benefits of both private and public housing, making them a popular choice for many Singaporean homebuyers.

What are the steps involved in selling a residential property in Singapore?

Below is the step-by-step process of selling a residential property in Singapore:

  1. Arrive at the asking price for  your property: Delve into the real estate market to look up the recent sales of properties nearby or in your building to have a fair understanding of the current market price of your property. The Urban Redevelopment Authority (URA) website maintains track of recent sales of properties in Singapore with all the relevant Information such as date of purchase, size, unit price by PSF, floor level and the like parameters.
    It is crucial to price your property reasonably because reasonably priced listings tend to get more enquiries and viewings and transact faster.
  2. Prepare your property for sale: Declutter, stage, and make necessary repairs or renovations to make your property lucrative to potential buyers.
  3. List your property on various marketplace portals and market them for sale: This involves listing your property on various real estate portals and other marketing channels to reach potential buyers. When you list your property for sale, make sure you have all the details ready, including the property’s square footage, a detailed description of the property and its features that will appeal to potential buyers, and pictures of your home. Additionally, consider posting a virtual tour giving a 360-degree view of your property.
  4. Show your property: Provide contact details when listing your property for sale, so interested buyers can schedule a physical tour. During the viewing, it’s essential to highlight the property’s strengths and be prepared to answer any questions the buyers may have.
  5. Negotiate offers: Once you receive offers from potential buyers, you can negotiate the best terms. This involves discussing the terms of the sale, such as the sale price, closing date, and any other conditions that need to be met.
  6. Hire a conveyance lawyer: The legal process of selling real estate to a new owner is known as conveyancing. A conveyance lawyer must conduct a title search to claim that your property is free from any encumbrances.
    The sale and purchase agreement (SPA) or option to purchase (OTP) initiates when your buyer’s lawyer engages with your conveyance lawyer. You may thus proceed with selling your property in Singapore legally after this has been confirmed.
  7. Grant the Option to Purchase (OTP) to the buyer: The OTP is sent to the prospective buyer, who must exercise it within the specified time frame of 14 days after obtaining it to enter into a sales contract with you.
    You should negotiate an option fee. Usually, 1% of the property’s purchase price is charged as the option fee, and OTP is set to maintain the buyer’s interest in acquiring the home.The conditions of the sale and purchase of your property will be outlined in the option to purchase.
    OTPs for HDB flats can be downloaded from the HDB website; however, OTPs for private properties have to be drafted up by a lawyer or an agent authorised to handle legal documents relating to the property.
  8. Sign the Sales and Purchase Agreement (SPA): Once the Buyer exercises the OTP, the seller has to collect a 4% Exercise Fee from the buyer and then engage in a Sale and Purchase Agreement with them.Usually, the Sales and Purchase Agreement states Information about each party, property’s address, square footage, price, whether it’s being sold furnished, whether an inventory list is necessary, the move-in date; Option Fee already paid; instructions on how and when the remaining payment is to be made; Rights and obligations of the buyer and seller.
  9. Complete the transaction: You may need to pay a Seller’s Stamp Duty (SSD) if you sell or dispose of the property within 4 years of acquisition. SSD is payable within 14 days of the date of the Contract/Agreement.
  10. Close the sale: The sale is complete when the buyer has taken possession of the property and the necessary documentation has been processed. You will receive the sale proceeds at this point, and the buyer will take over responsibility for the property.
    It’s important to note that the selling process of an HDB residential property is slightly different from that of a private residential property. For HDB flats, the seller must fulfil the Minimum Occupation Period (MOP) before selling the flat and obtain approval from HDB to sell the flat. HDB will list the apartment on the resale market, and prospective buyers will need to apply for an HDB loan if they still need one.

There is no MOP requirement for private residential properties, and the seller may engage a licensed real estate agent to assist with the sale process.

Conclusion

In conclusion, the process of selling a residential property in Singapore involves preparing the property for sale, pricing it realistically, marketing it to reach potential buyers, negotiating offers, signing a Sale and Purchase Agreement, completing the transaction, and closing the sale. It’s  advisable to seek the help of a real estate lawyer to ensure all the legal procedures are adequately followed.

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Frequently Asked Questions

Q.1 Can I sell my house without a property agent?
Yes, you can sell your house without the help of a property agent and save spending on the commission.
Q.2 Can foreigners buy property in Singapore?
Yes, foreigners are allowed to buy property in Singapore, but they must follow some restrictions and regulations. Foreigners are generally allowed to purchase private residential properties but landed properties such as houses or apartments are restricted. They may also be subject to additional taxes and fees, such as stamp duty and additional buyer’s stamp duty. It’s recommended to seek professional legal advice before purchasing property in Singapore.
Q.3 What all taxes are levied on selling property in Singapore?

When selling property in Singapore, the following taxes may apply

  • Seller’s stamp duty (SSD): A tax on the sale of the property based on the sale price and the holding period of the property.
  • Capital gains tax (CGT): A tax on the profit made from the sale of the property if the property was purchased for investment purposes.
  • Withholding tax: A tax on the amount of sale proceeds that are withheld by the buyer and paid directly to the tax authorities on behalf of the seller.
  • Income tax: A tax on the profits made from the sale of the property if the property was used for business or rental purposes.

It’s important to note that the applicable taxes can vary based on the circumstances of the sale, such as the property’s purpose and the seller’s residency status. It’s recommended to seek professional legal and tax advice when selling property in Singapore.

Q.4 How much do I have to pay for stamp duty for selling residential property in Singapore?

In Singapore, stamp duty for selling a residential property is calculated based on the selling price or market value of the property, whichever is higher. The stamp duty rate for residential properties is 4% for Singaporeans and permanent residents and 7% for foreigners.

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