Sales Transaction Related
- What is the minimum age to sign a Sales and Purchase Agreement (S&P) / Option to Purchase (OTP) in Singapore?
- Can Parents buy property under the name of the child less than 21 years of age?
The minimum age to enter into a S&P and OTP is 21 years old. Below 21 year old, the child doesn't have legal capacity to own a property in his/her name yet. So if parents are to buy property under a child that is below the age of 21 years old, they can do so by way of a trust.
Let me define what a trust is. A trust is a legal arrangement that allows someone (trustee) to hold the property for the benefit of another person (the beneficiary). When the property is held in trust, the trustee holds the legal title of the trust property. The Trustee holds a fiduciary duty and has a duty of care to the beneficiary. The trustee is also responsible for managing the property, and paying the relevant tax and duties. The trustee must act honestly and in good faith and exercise his powers in the best interest of the beneficiaries, putting the best interest of the beneficiaries. In another word, under this arrangement, all the benefits are for the beneficiary. Therefore it is important to keep the property of the trustee and the trust property separate and maintain separate payment and receipts made from the trust fund. Trust deed is drafted by a professional (by a lawyer). Do take note, for trust property, full cash is required for the purchase.
When the child turns 21 years old, the child is fully entitled to the property and the beneficiary can require the trustee to transfer the legal estate to him/her and when it happens it terminates the trust.
Note: On 8th May 2022, the Government announced the introduction of ABSD (Trust) at 35% (effective 9th May 2022 onwards). The ABSD (Trust) is to be payable upfront, when the residential property is transferred into any living trust. As a concession, a trustee may apply to IRAS for a refund of ABSD (Trust), provided that some conditions are met. Conditions such as a) when all beneficial owners of the residential property are identifiable individuals. The refund amount will be based on the difference between the ABSD (Trust) rate of 35% and the ABSD rate corresponding to the profile of the beneficial owner with the highest applicable ABSD rate (see illustration below - ABSD Trust Remission). The application for the refund must be made to IRAS within six months after the instrument is executed. For more information, please visit www.iras.gov.sg or consult a professional law firm for legal advice tailored to your needs.
Rental Transaction Related
- What is the minimum age to sign a Tenancy agreement in Singapore?
The legal age for a person to enter a tenancy agreement is the age of 18.
- What is the minimum rental term for a residential property?
For HDB flat, the minimum lease of a flat/ a bedroom is 6 months. Owners if HDB flats are caught are liable to fines and have the unit repossessed. (https://www.hdb.gov.sg/residential/renting-a-flat/renting-from-the-open-market/regulations-for-renting-out-your-flat#:~:text=Rental%20period,are%20all%20Singaporeans%20or%20Malaysians.)
The purpose of this regulation is to safeguard the safety and privacy and security of homes, and safeguard the living environment of neighboring residents.
Therefore it is illegal for owners and tenants to rent out the properties for short-term accommodation, renting as ‘bed & breakfast’, ‘homestays’, motels, etc through home-sharing platforms.
Visitors coming to Singapore should also take note of this regulations. For those staying less than three consecutive months, available accommodation include hotels (no minimum stay duration) and serviced apartments (minimum stay duration of seven days).
Mortgage Loan Related
- What is SORA?
SORA stands for Singapore Overnight Rate Average.
It is defined as a volume-weighted average rate of borrowing transactions in the unsecured overnight interbank SGD cash market in Singapore between 8am and 6.15pm (both timing inclusive). The Monetary Authority of Singapore (MAS) is the administrator of SORA. SORA rate is published on MAS website the next business day at 9am.
SORA is computed based on actual transactions and meets the standards of international best practices set out in the IOSCO Principles for Financial Benchmarks. The reporting banks are the most active market participants in the underlying unsecured overnight interbank SGD cash market.
The reporting banks, as of August 2020 are:
1 ABN AMRO Bank N.V. Singapore Branch,
2 Australia and New Zealand Banking Group Limited, Singapore Branch
3 Barclays Bank PLC, Singapore Branch
4 BNP Paribas, Singapore Branch
5 Chang Hwa Commercial Bank Limited, Singapore Branch
6 CIMB Bank Berhad, Singapore Branch
7 Citibank N.A., Singapore Branch
8 Commerzbank AG Singapore Branch
9 Credit Agricole Corporate & Investment Bank, Singapore Branch
10 DBS Bank Limited
11 Deutsche Bank AG, Singapore Branch
12 HL Bank, Singapore Branch
13 Industrial and Commercial Bank of China Limited, Singapore Branch
14 ING Bank N.V., Singapore Branch
15 KBC Bank N.V. Singapore Branch
16 Malayan Banking Berhad, Singapore Branch
17 Mizuho Bank Limited, Singapore Branch
18 MUFG Bank Limited, Singapore Branch
19 National Australia Bank Limited, Singapore Branch
20 Natixis, Singapore Branch
21 Oversea-Chinese Banking Corporation Limited
22 Standard Chartered Bank (Singapore) Limited
23 The Hongkong and Shanghai Banking Corporation, Singapore Branch
24 United Overseas Bank Limited
