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Foreign ownership of private property to decline: Law Minister

Law Minister K Shanmugam said on Wednesday that he expects the number of foreigners owning private property in Singapore to decline, following changes to the Residential Property Act (RPA).

These amendments, implemented in January, impose tighter restrictions on foreign ownership of private property, requiring those who renounce their citizenship or permanent residence to sell their properties within two years, reported Channel NewsAsia.

Only foreigners who are permanent residents (PRs) can purchase landed residential property here, and have to seek prior approval from the law minister. Each approval permits the purchase of one property.

Shanmugam added that approvals are given to applicants who are making "very significant economic contribution" to Singapore, and to those whose families are rooted here, with their children doing national service.

“After the further tightening up, I suspect we are looking at very few people who would qualify,” he told reporters on the sidelines of an event.

Pointing out that it is likely that less than half of those who had previously qualified would still make the cut, he said, “I’d be surprised if approvals (given to foreigners to own private property here) are more than 50 per year.”

Shanmugam said that at present about 3.5 per cent of foreigners in Singapore own landed property here, and that the government has always kept it below 5 per cent.

The government imposes stringent conditions on approved PR owners of private property because Singaporeans should be the primary owners of landed property here, with the exceptions to the rule being "very rare", he added.

A law ministry spokesperson said that each year over the past three years, it has received an average of 230 applications from Singapore PRs for the purchase of landed residential property, and has approved about 60 per cent of them.

With the new set of criteria, which the ministry said was revised "recently", the number of approvals given could fall from around 138 per year to no more than 50, as per the minister's prediction, according to The Business Times.

Enhanced penalties under the RPA have also been in effect since the beginning of this year. For instance, a PR property owner who rents out his landed home without approval will face a fine of up to three times the rental income earned over the period of breach or $10,000, whichever is higher.

A PR landed property owner who sells his property without approval during the non-disposal period faces a maximum fine of $200,000.