What is Freehold Property in Singapore? Find Out Here!
April 11th 2022
What is Freehold Property in Singapore? Find Out Here!
Have you ever heard of freehold property but don't know what freehold property is in Singapore? Freehold property, one of Singapore's most popular investment choices, is an asset class of land that can be sold and purchased on its own without having to pay rent. There are two types of freehold property in Singapore: freehold residential and freehold commercial properties.
Both types have their pros and cons. If you want to know more about freehold property meaning in Singapore, you can keep reading this article without skipping any parts!
What Does Freehold Property Mean in Singapore?
In Singapore, a freehold is always known as the competitor of a leasehold. Even though both types can be categorized as condos, there are several distinctions between these two. If you own a freehold property, you can keep it indefinitely.
You lease a property for a certain number of years with leasehold properties. When the lease term ends, you must return the land to the state.
Leaseholds are divided into two types: 99-year and 999-year leaseholds. Due to their seemingly endless tenure, 999-year leasehold properties are nearly identical to freehold buildings. By that time, most of us will have passed away. We'll refer to leasehold properties as those having a 99-year lease for simplicity.
Are There Freehold Properties in Singapore?
If you're thinking of having a freehold property in Singapore, you can start owning a freehold condo in Singapore. Condominiums can be the right choice for those who are willing to invest in a freehold property. Property in Singapore can be leasehold (for 99 years) or freehold (held in perpetuity). So, yes. Freehold properties surround Singapore, and you have to make sure that you can afford one because it costs monstrously.
Is It Safe to Buy Freehold Property?
One of the frequently asked questions by many Singaporeans is the safety of buying a freehold property. If you are one of them, you need at least to know what property could be owned as a freehold. If you choose a condominium, you have to consider what freehold condo could suit your budget and style.
Buying a freehold property is a big step. However, if you're aware of the risks and take steps to protect yourself, it will lead to success in the long run. Now, to answer the "is it safe to buy freehold property?" The answer is that yes, there are risks involved, but the good thing about them is that the risks can be minimized with proper planning.
What Are the Benefits of Buying the Freehold?
Even though you've been enlightened about freehold property, both freehold vs. leasehold Singapore still got you perplexed, right? Don't worry! If you're still eager to have a freehold rather than a leasehold, here are the benefits of buying freehold property in Singapore.
Free lease extensions: In most cases, you can extend your lease for an additional 999 years at no cost (excluding legal fees)
You control service charges: you can select cost-effective, high-quality providers.
No ground rent: Normally, ground rent is not paid.
It can add value to your home: buyers prefer freehold apartments to leasehold flats since they have fewer constraints. For example, you may require permission to sublet or have a pet if you have a lease.
Average Freehold Property Cost in Singapore
Freehold prices vary similarly to property prices, but the shorter your lease, the more expensive your freehold. To purchase your portion of the freehold, you must pay the following:
The cost of a surveyor's proper freehold appraisal.
The acquisition price for the freehold (so you avoid paying over the odds).
Legal fees for leaseholders - legal and valuation fees for freeholders.
Land tax stamp duty (if the acquisition price exceeds £125,000).
Why Freehold is Better than Leasehold
Freehold property in Singapore has been a popular investment, with a surge in demand for properties in prime locations and strong rental growth. Compared to leasehold homes, freehold properties have more flexibility and freedom in terms of utilization.
You have more freedom to adjust to your unit's internal and external structure. If you enjoy gardening, you can renovate your home to include larger gardens and lawns. You should consider yourself getting a freehold rather than a leasehold.
In addition to that, the freehold/leasehold issue is unlikely to affect your rental yields because standard rental periods range from a few months to 1-to 2 years. Your freehold property will provide the same rental revenue as a nearby leasehold condo with equivalent floor size and amenities.
Moreover, in Singapore, freehold properties are exempt from depreciation. Even if you missed out on the previous market boom, you could afford to hold off on selling your home until the right moment comes. In the meanwhile, you must ensure that the estate is well-maintained.
That's all everything you need to know about freehold property in Singapore. If you plan to have one, you can engage with an ID company to get you the perfect freehold condo or landed property. Renodots can always be your best buddy for your freehold or leasehold property renovation. Contact us now and claim your free quote!
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