SINGAPORE — Foreigners looking to buy property or land currently zoned for mixed commercial and residential use will be required to seek government approval from Thursday (July 20).
The Ministry of Law (MinLaw) and the Singapore Land Authority (SLA) on Wednesday night announced that they have refined the Residential Property Act (RPA) to classify these developments as residential property or land.
Mixed commercial and residential developments, which include shophouses and some shopping centres with residences above, were previously part of the list of land use zones designated as non-residential property.
The update was part of the regular review of the RPA to ensure the land use zones are up to date with the prevailing zoning terminology used by the Urban Redevelopment Authority (URA), said MinLaw and SLA in a joint press release on Wednesday.
According to URA's website, mixed commercial and residential developments include a combination of commercial uses and residential flats.
As land zoned or developments permitted for mixed-use are predominantly for residential use, such developments will now be deemed as residential property and regulated under the RPA, said MinLaw and SLA.
"This is to better reflect the intent of the RPA to safeguard residential land for Singaporeans," the authorities added.
Foreigners who plan to purchase or acquire an interest in sites permitted for mixed commercial and residential use will now need to apply for approval under RPA.
Foreigners who are existing owners of such land or property are not required to obtain approval under the RPA if they "intend to retain the property as-is".
However, approval is needed should they wish to retain and redevelop the property, said MinLaw and SLA.
Foreigners can be exempted from obtaining approval for such land or property if the Option-to-Purchase (OTP) was granted by sellers to potential buyers before July 20 this year; this OTP is exercised on or before Aug 9; and this OTP has not been varied on or after July 20.
The update may be seen as a "pre-emptive move" to prevent over-concentration of ownership in a development by a foreigner, said Huttons Asia's senior director for research Lee Sze Teck.
He added that if a development is owned around 80 per cent by a foreigner, the person "can decide what to do with the development including en-bloc".
The change may also create uncertainty in the investment sales, collective sales and shophouse markets in the interim as market players seek clarity on the new rules, said Mr Lee.
For instance, strata sales of commercial units in commercial and residential zoned development, as well as some shophouses in Bugis, may be affected.
Mr Lee also noted that most of the residential project launches are on land zoned residential and will not be affected. CNA