Singapore Land Authority (SLA) says owners can retain Freehold land and sell as leasehold

In the last issue where we investigated whether Singapore Property Investors Buyers can buy Freehold land and sell as leasehold and it’s possible implications of Singapore Property developers buying freehold land, developing it and then selling it as 103 years leasehold strata titled Condominium.

The Recent Launches such as (but not limited to) Far East’s “The Shore residences” in the east coast as well as “Greenwood Terrace” in the prestigious greenwood vicinity of District 10 are such examples of the Singapore property developer buying Freehold land and launching as 103 years leasehold strata titled land.

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Why do Singapore Property Buyers and Investors need to know?

Singapore property buyers and Investors need to know this because the future value of their condominium and cluster landed properties with Strata titles will be affected some 20 to 30 years down the road when the development becomes run-down. Is a cluster terrace really a terrace when you don’t really own the land title but collective land called Strata titled land? (Isn’t it just a bigger size multi-storey condo?)

What about Singapore property owners with Freehold or 999 Leasehold land titles?

For current Singapore property owners who owned landed properties with freehold or 999 leaasehold land titles, this means a potential future bonanza. Please read on, we have got the reply from Singapore land authority.

Reply from Singapore Land Authority (SLA) On Freehold land being sold as Leasehold strata titled developments.

“www.PropertyBUYER.com.sg:
We are doing a research for the benefit of our readers. Our website is at www.PropertyBUYER.com.sg and our readers have been urging us to enquire about how Far East and numerous other property developers have been able to acquire FREEHOLD land from the government (either SLA or from the open market) and then develop and sell the properties as a 99 years property? Could you please help us understand under what circumstances are Developers allowed to buy Free Hold land and re-sell as Lease hold land? We appreciate if you could point us to any such literature, web link, sites? which explains these in greater details.?

Singapore Land Authority:

Developers can buy freehold land through the private market. You ?should? approach the developers for details on your queries as these are all? private transactions.?

“www.PropertyBUYER.com.sg:

Thank you for your reply.?We understand that developers can buy from the private market. But having? said that, our readers would like to understand under what statute does ?it? allow the developer to buy Free Hold land and then sell it as a 99 years?lease? ?Hope you can point us in the right direction.?

Singapore Land Authority:

We refer to your enquiry dated 11 Jan 2010.
Common Law provides that a smaller interest in land can be carved out? from ?a? larger interest in land, with the registered proprietor/developer? retaining? a ?reversionary interest.

The duration of this smaller interest is not? governed by ?any statutory provision.?? Hence it is acceptable for a developer to retain the reversionary? Freehold ?title in a development and merely sell the strata lots in the development ?with ?a 103-year lease or any determinate number of years out of the Freehold ?title.?
”

Good News for Singapore Property Owners with Freehold land or 999 lease hold land

Singapore land authority has clarified that “Common Law provides that a smaller interest in land can be carved out from a larger interest in land, with the registered propietor/develop retaining a reversionary interest.”
This means that you can possibly sell your landed property on a 99 years lease or any numbers of years lease as you deem fit if you sort out the legal paperwork.

This would mean that you will be able to pass on wealth to your descendants while selling properties while retaining the reversionary rights to freehold land.
Maybe you are stting on 3 or 4 Semi-detaches or Bungalows, you can’t really lease it out to get a good cashflow and yet you don’t want to sell it as you may not be able to buy another property in a similar good location and you need to grow your business.

What could the Singapore Property landlords do?

Perhaps you can sell one or two of your Semi-detaches as leasehold while you maximise and free up capital and at the same time share in the upside the land can possibly provide.
Sad day for Singapore Property buyers
For Singapore property buyers, it means that more and more property developers will likely get in on the strategy to retain the freehold title while selling developments as Strata title leasehold. Freehold land may gradually disappear into the hands of the well funded and rich property developers.

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Tel: 6100 – 0608
SMS: 9782 – 8606
Email: loans@propertyBUYER.com.sg
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Related posts:

1. Property developers buys Free Hold land and releases it as lease hold