Good Class Bungalows Sold to Trust Companies with Foreign Beneficiaries and Purchase Applications Rejected
Ministry of LawSpeakers
Summary
This question concerns the acquisition of Good Class Bungalows (GCBs) through trust companies and the vetting of foreign beneficiaries, as raised by Mr Leong Mun Wai. Second Minister for Law Edwin Tong Chun Fai clarified that foreigners must seek approval under the Residential Property Act to acquire landed residential property, including via trusts. He reported that from 2019 to date, no approvals were granted for trust companies to acquire GCBs for foreign beneficiaries, and no foreign purchasers have been approved since 2021. The government maintains a strict approach, assessing Permanent Resident applicants on their economic contributions and Singapore nexus, with only five GCB approvals granted to foreigners between 2012 and 2021. Consequently, any GCBs acquired through trust companies since 2019 were for Singaporean beneficiaries, who are not required to seek approval under the Act.
Transcript
14 Mr Leong Mun Wai asked the Minister for Law in each year of the last five years (a) what percentage of Good Class Bungalows are sold to trust companies; (b) what percentage of these trust companies have foreign beneficiaries; and (c) what percentage of Clearance Certificate applications by trust companies to purchase Good Class Bungalows are rejected.
Mr Edwin Tong Chun Fai (The Second Minister for Law): Foreign individuals, including Permanent Residents (PRs) and foreign entities, who wish to acquire landed residential property in Singapore must seek approval under the Residential Property Act (RPA). This is regardless of whether the purchase is made by the individual or entity directly, or through any vehicle, including a trust company.
Singapore Citizens are not required to seek approval under the RPA to acquire landed residential property. In cases where the property is held through a licensed trust company, approval under the RPA is not required if the purchaser can show that the beneficiaries are Singaporean.
The Singapore Land Authority (SLA) tracks all cases where approval is required under the RPA where the purchaser is foreign and, in the case of licensed trust companies, where the beneficiaries are foreign. Beyond that, SLA does not collect general data on landed residential properties that are acquired through trust companies.
Based on SLA’s records over the last five years from 2019 to date, no approvals were granted under the RPA for a trust company to acquire a Good Class Bungalow (GCB) to hold on trust for foreign beneficiaries. As such, any GCB acquired during this time through a trust company were for Singaporean beneficiaries.
As has been made clear in Parliament, the Government takes a very strict approach when granting approvals for foreigners to own landed residential properties within mainland Singapore. Only PRs are allowed to purchase with approval and applicants are assessed on a case-by-case basis, taking into consideration factors, such as their economic contribution to Singapore and whether they have a strong Singapore nexus. There have been no approvals given to any foreign purchasers to acquire any GCB since 2021, in any capacity, whether personal or otherwise. For the period from 2012 to 2021, there were five approvals given under the RPA for acquisition of GCBs by foreigners (PRs), and of those five GCBs, two were inheritance cases. This was stated in Parliament on 2 August 2022.
Thus, in summary, (a) since 2021, there have been no approvals given to any foreigners to purchase any GCB; (b) since 2019, there have been no approvals given to any licensed trust company where the beneficiaries are foreign to purchase any GCB.