Important Things To Know About Buying Commercial Real Estate

In recent years, investment in commercial real estate has gradually increased in Singapore, and real estate investors seem to prefer commercial real estate over residential real estate. One of the main reasons for this development was the government's move to prevent bubbles in the housing market. One of the best things about investing in commercial real estate is that it reduces your tax payments. Commercial property owners do not have to pay Seller Stamp Duty (SSD) or Additional Buyer Stamp Duty (ABSD) when selling or buying commercial property. Additionally, foreigners do not have to follow government regulations when buying, owning, or selling commercial property in Singapore. However, before purchasing a commercial property, there are some important points that need to be understood and considered, especially if the buyer is new to the Singapore commercial property scenario.

CPF cannot be used to finance the purchase of commercial property. 

Private buyers cannot use funds from their CPF or Central Provident Fund savings accounts to finance commercial property purchases. In other words, the money in the buyer's CPF account cannot be used to pay the down payment or monthly installments. The earnest money deposit must be paid in full by the buyer in cash, but the buyer may also take out a bank loan to pay the remainder of the property price.

Monthly mortgage payments can be made using the income from the property. This income can come in the form of business income or rental income from real estate.

Property tax and vacancy refund

Commercial property owners must pay property taxes to the state. The tax amount is 10% of the total value of fixed assets. However, if the owner is unable to find a tenant who can occupy the property and earn rental income, or if the property is vacant, the owner is entitled to a vacancy refund. In this case, the owner can claim a full refund of the property tax. loan

When purchasing commercial property in projects such as Tai Seng Point Singapore, buyers must meet much stricter financing eligibility requirements than when purchasing residential property. Buyers are eligible to apply for a loan of up to 80% of the total value of the property, with or without a loan balance. Loan approval decisions rest solely with each bank. Banks also tend to have stricter regulations for properties whose primary purpose is to generate rental income.

Buyers who purchase property in complexes like Taisen Point to conduct business face less stringent regulations when applying for a loan. The term of the loan is up to 30 years, but the lender intends to pay off the mortgage before the end of the term.

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