Guide to Buying Commercial Property in Singapore
When it comes to investing in a property, most people would prefer to buy a residential over commercial property because it’s just so much easier. With the implementation of tighter Additional Buyer’s Stamp Duty (ABSD) rules in the 2018, it has become even more restrictive to buy a second or subsequent residential property.
As such, you may be wondering if it makes more sense to invest in commercial property instead. Even you won’t have to pay ABSD for commercial property purchases, this shouldn’t be the main basis for your decision as it’s important to understand the risks of buying a commercial property, because remember, it’s a big-ticket item that involves a lot of funds.
What is a Commercial Property?
Commercial property is a building mainly for business purposes or work. For the property owner, it is used to generate profit, either through rental income or capital gains.
There are three types of commercial properties: retail, industrial and commercial, and hotel:
Retail - Shopping malls, pet shops, gyms, restaurants, bars, shophouses, HDB shophouses
Industrial and commercial - B1 (Offices, warehouses), B2 (factories)
Hotel - Hotels, hostels