When buying property in Singapore, one of the first decisions you’ll need to make is whether to go for leasehold or freehold property. The difference between these two types of tenure can significantly impact your property purchase in Singapore, especially when it comes to long-term value and future resale potential. In this post, we’ll break down what you need to know about leasehold vs freehold properties to help you make an informed decision.
What is Freehold Property?
A freehold property is one that you own indefinitely. Once the transfer of property ownership is completed, the property is yours forever, and you can pass it down to your heirs. In Singapore, freehold properties are typically more expensive than their leasehold counterparts due to this perpetual ownership.
Freehold properties tend to be more attractive to buyers who want long-term security. However, they are becoming increasingly rare, especially in prime areas like the central region of Singapore, where the majority of properties are leasehold.
What is Leasehold Property?
On the other hand, a leasehold property is owned for a fixed period, typically 99 years in Singapore. Once the lease expires, ownership of the property returns to the government unless the lease is renewed. Leasehold properties are more common, particularly for HDB flats and government-subsidized housing.
While leasehold properties may be more affordable, they come with certain risks. For instance, the value of a leasehold property can start to decline as the lease term shortens, especially when it dips below 60 or 30 years. This can affect both resale value and your ability to secure a mortgage from a bank.
Which One Should You Choose?
The decision between leasehold vs freehold often comes down to your long-term plans and financial considerations. If you’re looking for an investment that retains its value over time, a freehold property may be the better option. However, if you’re purchasing a home for the short to medium term, a leasehold property may offer better value for money.
It’s also important to consider the location and property type. For example, most HDB conveyancing deals with leasehold properties, while landed property in Singapore is more likely to be freehold.
Consulting a Conveyancing Lawyer
When deciding between leasehold and freehold, it’s always a good idea to consult with a conveyancing lawyer in Singapore. They’ll help you understand the legal implications of your choice, guide you through the conveyancing process, and ensure that all the necessary checks are done, especially with regard to the property’s tenure.Understanding the differences between leasehold and freehold is crucial to making the right choice for your property purchase. By weighing the pros and cons and consulting with a professional, you’ll be better equipped to make an informed decision that suits your needs.
