Can HDB owner buy overseas property

Can HDB owner buy overseas property

Due to cooling measure policy implemented by Singapore government, many Singaporean and PR’s investors has set their sight to invest in overseas property for more affordable option and higher return of investment. The common question always being asked is, “Can HDB owner buy overseas property?”

Below is the general rule for Singaporean and Singapore Permanent Resident who own HDB and wish to invest in overseas property

  1. You are allowed to invest in overseas residential property if you have fulfilled your Minimum Occupation Period (MOP)
  2. You are allowed to invest in overseas non-residential (commercial and industrial) property even if you haven’t fulfilled your Minimum Occupation Period (MOP)
  3. You must dispose of your overseas residential property within 6 months after you purchase your HDB

For more information about your eligibility you can contact HDB at http://www.hdb.gov.sg/cs/infoweb/contact-us

What are the things to check out when you invest in overseas property

Once you have certainty on your eligibility in investing in overseas property, the next step will be to check on things to look out when you invest in overseas property.

Here is the 10 factors to consider

  • Does the country allow foreign ownership?
  • Type of tax for foreigner, the most common one are: stamp duty tax, yearly property tax, rental income tax, capital gain tax, and inheritance tax.
  • Other limitation? The common limitation is foreign quota units, cannot own landed property, cannot own freehold tenure.
  • Payment procedure to better plan your finances
  • Are you eligible for loan?
  • What are the risk involved?
  • Rental demand
  • Return expectation
  • Location
  • Developer track record

Type of risk

There are few main risk factors you must consider when you make your overseas property investment: political risk, currency risk, and liquidity risk.

Political Risk

Political changes and instability in a country could affect investment return for example change in government, legislative bodies, other foreign policy makers or military control. Political risks are notoriously hard to quantify because there are limited sample sizes or case studies when discussing an individual nation.

Liquidity Risk

The risk stemming from the lack of marketability of an investment that cannot be bought or sold quickly enough to cash out.

Currency Risk

When you invest in overseas property, you are exposed to potential risk from fluctuating foreign exchange rates. On the contrary, you also have the potential to reap gains if the foreign exchange rates move according to your favour.

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