Real estate ownershipi Planning
The Planning Act 1998 of Singapore is the primary legislation that provides the legal basis for land use planning and controls in Singapore. Pursuant to the Planning Act 1998 of Singapore, no person may develop land outside a conservation area without obtaining planning permission. Similarly, no person can subdivide land without first having obtained subdivision approval pursuant to the Planning Act 1998 of Singapore.
The statutory body responsible for carrying out such planning is the URA. The URA publishes a master plan every five years, which is a statutory land-use plan that will guide Singapore's development in the medium term (over the following 10 to 15 years). The master plan designates the zoning and permissible uses of land in Singapore. It is important to check the permissible use of a property prior to its acquisition to ensure that it is in line with the purchaser's intended use. In this regard, purchasers would typically conduct legal requisitions with the planning authority as to the land use zoning of the property.
Where a change of use of a particular premise is desired, an application will have to be made to the URA for permission. If the proposed development project increases the value of the land, a tax, known as a land betterment charge, may be levied on the applicant.45ii Environment
JTC, which leases out most of the industrial land in Singapore, typically imposes environmental clean-up obligations on a lessee whose use of the land is potentially pollutive. If any such lessee wishes to assign its lease to a third party, JTC's consent is usually required. As part of its consent, JTC may require the lessee to conduct an environmental baseline study (to determine the extent of contamination of a particular site) and, if it deems it necessary, require the lessee to carry out an environmental clean-up before assignment of the lease.
Separately, under the Environmental Protection and Management Act 1999 of Singapore (EPMA), the occupier of any industrial or trade premises is required to maintain any fuel-burning equipment and any air pollution control equipment installed in or on the premises in an efficient condition, and ensure that such equipment is working in a proper and efficient manner. Failure to abide by these obligations would render the occupier guilty of an offence.46iii Tax
Stamp duty is payable on the acquisition or disposal of immovable property situated in Singapore. The amount of stamp duty payable is computed on the purchase price or market value of the property, whichever is higher, and is payable within 14 days of the date of the instrument effecting the acquisition or disposal of the property (or, where the instrument is executed overseas, within 30 days of receipt of the instrument in Singapore). A penalty of up to four times the amount of unpaid duty can be imposed where there is a failure to pay this duty.
Where the property concerned is a residential property acquired on or after 20 February 2010 and is disposed of within four years of its acquisition, seller's stamp duty (SSD) may be applicable. However, for properties acquired on or after 11 March 2017, SSD is only payable where it is disposed of within three years of its acquisition.49 The amount of SSD payable varies according to the holding period.50 With effect from 12 January 2013, SSD is also payable on industrial properties acquired on or after that date and sold or disposed of within three years.51
Additional conveyance duties (ACD) were also introduced by the government to address the differential treatment in stamp duty between a direct acquisition or disposal of residential properties and an indirect acquisition or disposal of residential properties via a transfer of equity interest in a property holding entity (PHE).52 ACD for PHEs acquiring shares applies where the grantee is a significant owner of the entity immediately before the execution of the conveyance or becomes one upon the execution of the conveyance, and the entity is a PHE at the time of execution.53 ACD essentially becomes a de facto ABSD on the purchase of shares in these entities that have property-owning special purposes.54 On 9 May 2022, the Stamp Duties (Amendment) Bill introduced additional conveyance duties for trusts, payable on transfer of equity interests in PHEs into all living trusts where the significant ownership threshold has been reached, for transfers executed on or after 10 May 2022.
The government has also introduced ABSD for transfers of property into living trusts executed on or after 9 May 2022 (ABSD (Trust)). The ABSD (Trust) rate of 35 per cent will apply to the transfer of residential property into a living trust. Before 9 May 2022, when residential property was transferred into a living trust, ABSD was not payable if the living trust was structured such that there was no identifiable beneficial owner at the time of the transfer of the residential property into the living trust. However, ABSD (Trust) does not apply to trusts created by will, and while ABSD (Trust) is paid upfront, it can be remitted if certain conditions are met.iv Finance and security
The most common forms of security over real estate situated in Singapore are the mortgage and the charge.
A mortgage in Singapore operates like a charge where it creates a security interest in the property, but without an outright conveyance of the property itself. Where separate title for the property has been issued, the mortgage or charge must be registered with the Singapore Land Registry in the approved form. Where separate title for the property has not been issued, an assignment of the rights, title and interest under the relevant contract (for instance, a sales agreement) coupled with a mortgage-in-escrow is effected instead.
Other forms of security that are commonly taken over interests emanating from real estate situated in Singapore include an assignment of sale and rental proceeds, an assignment of insurances over property and debenture (fixed and floating charge over a company's assets).