4 Things About Commercial Properties You Must Know Before Investing

If you are looking to invest in another asset class. Commercial properties could be a viable alternative to residential properties for investors. But before you go ahead with the purchase, here are 3 things about commercial properties you must know before investing

• You are not subjected to Seller's Stamp Duties (SSD) should you decide to sell any time
  • Any home owner selling their residential property within three years will be required to pay the Seller’s Stamp Duty (SSD). Depending on the holding period, the SSD payable can range from 4% to 12%.
  • Buyers of commercial properties except for Industrial properties are not subject to this and can choose to sell off their properties and exit the market at any time.
• There are no Additional Buyer's Stamp Duties (ABSD) when you purchase multiple commercial properties
  • If you have not heard about ABSD, below is a table to indicate the percentage of ABSD a home buyer needs to pay to own their first or multiple properties. The amount also depends on the residency status of the buyer.
  • However, there is no such regulation for commercial properties.

Profile of Buyer	1st Property	2nd Property	3rd and Subsequent Property
Singaporean	0%	7%	10%
Singapore Permanent Resident (SPR)	5%	10%	10%
Foreigner and entities	15%	15%	15%
For full details of ABSD. Please visit IRAS website

• You are subjected to Goods and Service Tax (GST) when you purchase commercial properties
  • Individuals buying a commercial property will be required to pay the 7% GST on the purchase price.
  • However, an investor who owns a company and purchases a commercial property through it may apply to claim back the GST amount, subject to the guidelines set by the Inland Revenue Authority of Singapore (IRAS).
• The types of commercial properties. Many buyers are not aware of what type of commercial properties they can purchase. Here is a breakdown :
  • Office
    • Office Space
    • Office Building
    • SOHO
  • Retail
    • Retail Space
    • F & B Space
  • Shophouse
    • HDB Shophouse
    • Private Shophouse
  • Industrial (Subject to SSD)
    • B1 - Light Industrial
    • B2 - General Industry
  • Others
    • Medical Suites
    • Hotels & Resorts
    • Marina & Country Clubs

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