How to Buy Commercial Property in Singapore

With its pro-business environment, strong legal system, and strategic location, Singapore remains a leading destination for property investors. Following the April 2023 hike in Additional Buyer’s Stamp Duty (ABSD)¹, which doubled the rate for foreigners buying residential properties to 60%², many investors have shifted their focus to commercial real estate, which is exempt from ABSD and offers attractive opportunities for diversification and steady rental income.

For investors managing international funds or renting to foreign tenants, efficient payment methods and proper financial separation are essential. A Wise Business account lets you receive rent payments from multinational tenants in their preferred currencies. You can also hold rent in the original currency and exchange at favourable rates later, reducing any potential foreign exchange losses.

Note: This publication is provided for general information purposes and does not constitute legal, tax, property, or other professional advice from Wise Payments Limited, its subsidiaries or affiliates, and it is not intended as a substitute for obtaining business advice from a real estate advisor or any other professional.

What is commercial property in Singapore?

In Singapore, the Urban Redevelopment Authority (URA) determines whether a plot of land is designated for residential, commercial, industrial, or mixed use. These classifications determine the activities permitted on each site and the applicable ownership rules and are reflected in the Master Plan³.

Commercial property refers to land or buildings used mainly for business purposes, such as offices, shops, hotels, or industrial spaces, to generate profit through rental income or capital gains.

Mixed-use developments that combine both residential and commercial elements are also common across Singapore. However, when a property falls primarily under residential zoning, it will be subject to stricter ownership regulations, particularly for foreign investors⁴.

Types of commercial properties for investment

In Singapore, commercial properties generally fall into three main categories: retail, industrial and commercial, and hotel⁵. Each serves different business functions and offers varying levels of risk, return, and management requirements.

Retail properties include shopping malls, restaurants, bars, gyms, and shophouses. These spaces cater to consumer-facing businesses and are often located in high-traffic areas. Shophouses, in particular, are highly sought after due to their limited supply and conservation status, which preserve their unique architectural character and heritage appeal. Their scarcity and prime locations make them one of the most prized forms of commercial real estate.

Industrial and commercial properties are typically used for offices, production, or logistics activities. They are classified into two main types:

• B1, which covers light industrial spaces such as offices, warehouses, and clean production areas, and
• B2, which refers to heavier industrial use, including factories and manufacturing facilities.

Hotel properties encompass hotels, hostels, and serviced apartments. These assets serve the tourism and hospitality sectors and can generate consistent income through daily room rates, making them attractive to investors looking for long-term returns in Singapore’s strong travel market.

Foreign ownership of commercial property

Singapore’s property market is one of the most open in Asia when it comes to foreign investment. Generally, foreigners enjoy the same ownership rights as locals for commercial property purchases, making it an attractive option for international investors seeking stable returns.

Foreign buyers can freely purchase most types of commercial property⁴. This includes shophouses for commercial use, industrial and commercial buildings, and hotels registered under the Hotels Act.

However, restrictions apply to properties that are zoned for residential and mixed use. In such cases, foreign investors may need to obtain prior government approval before proceeding with the purchase. It’s therefore important to confirm the zoning classification with the URA before committing to any transaction.

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Key financial considerations when buying a commercial property in Singapore

Before investing in a commercial property, it’s important to understand the stamp duties and taxes involved, as they will directly affect your overall return on investment. Here is a quick overview:

• Additional Buyer’s Stamp Duty (ABSD): Unlike residential property, commercial property purchases in Singapore are not subject to ABSD.
• Buyer’s Stamp Duty (BSD)⁶: BSD is levied on all property purchases in Singapore and is calculated based on the higher of the property’s purchase price or market value. The rates are tiered, meaning higher-value properties incur higher tax amounts.
• Goods and Services Tax (GST): Commercial property purchases are subject to GST at 9%. Buyers who are GST-registered businesses may be able to claim input tax credits on their purchase, depending on the property’s intended use.
• Property Tax⁷: Property tax is an annual charge of 10% on the property’s annual value, which is the estimated gross rent it could fetch yearly⁸.
• Seller’s Stamp Duty (SSD): SSD is tiered and only applies when selling industrial properties within a three-year holding period⁹.

How to finance your Singapore commercial property purchase

Financing a commercial property in Singapore differs from buying a residential one, as the regulations and eligibility criteria are more stringent. Here are the key points to note before securing a loan:

• Loan-to-Value (LTV) Limit: Commercial property loans are generally capped at 80% of the property’s market value or purchase price, whichever is lower¹⁰. This means you will need to prepare a minimum 20% cash down payment, though some banks may require a larger amount depending on your credit profile and the property type.
• Higher initial cash outlay: Unlike residential property purchases, CPF funds cannot be used for the down payment or monthly loan repayments. You’ll need to finance these entirely with cash, as they cannot be paid using CPF savings or bank loans.
• Total Debt Servicing Ratio (TDSR): If you’re an individual borrower, you can only borrow up to 55% of your gross monthly income¹¹. This includes all existing debts, such as other property loans, car loans, and credit facilities.
• Loan terms and interest rates: Commercial property loans tend to come with higher interest rates and shorter tenures, usually capped at 30 years, compared to residential mortgages¹². This results in higher monthly repayments, so it’s essential to plan your cash flow carefully before committing.

Additional costs of purchasing commercial properties in Singapore

Beyond the purchase price and taxes, buying commercial properties in Singapore comes with additional costs that investors should plan for:

• Property price: This varies widely depending on the type of property, economic conditions, and market rental values in the area. Prime locations such as the Central Business District (CBD) or Orchard Road naturally command higher prices.
• Lease tenures: Commercial properties often come with shorter lease terms of 30 to 60 years. This can affect both financing options and long-term returns.
• Renovation costs: Older properties may require renovation or refurbishment to attract tenants or meet business needs. These costs can add up significantly and should be factored into your overall investment budget.
• Furniture: Furnishing your property can help increase rental value and attract quality tenants, but it also means a higher upfront cost.
• Maintenance: Commercial properties generally incur higher maintenance and operational costs. Investors should set aside a budget for ongoing maintenance to protect the property’s value and ensure steady rental income.

Other important considerations

On top of the financial considerations, you should also note the following non-financial factors that could impact the returns from your commercial property:

• Location, zoning, and intended use: A property’s location directly affects its rental demand and resale value. Sites near MRT stations or key business hubs tend to perform better. Always check URA’s Master Plan to ensure your intended use complies with regulations.
• Rental yield and profitability: Assess the property’s rental yield by comparing potential income against costs such as taxes, maintenance, and loan repayments. A prime location may not always guarantee higher returns, so aim for a balance between steady rental income and long-term value growth.

How to buy commercial property in Singapore: Step-by-step guide

Wondering how you can buy commercial property in Singapore? Below, we give you some top tips to make this process easier for you and help you find your ideal property fast.

How to find commercial properties for sale

Here are the three main steps to follow to access listings on commercial properties that are up for sale.

1. Search online portals and broker listings: Filter for commercial properties on major property portals and shortlist your options. Engage reputable commercial real estate brokers to access off-market stock and early notices.
2. Track URA Government Land Sales (GLS): Monitor the Urban Redevelopment Authority’s biannual GLS programmes for upcoming commercial and mixed-use plots¹³. You should take note of site use, tenure, and planning parameters to gauge future supply.
3. Use URA market data to validate demand: Review recent transactions, median rentals, vacancy rates, and pipeline projects for your target micro-market. Prioritise districts with tightening vacancy and resilient rents.

Process of purchasing and transferring commercial property

So what is the overall process from finding your ideal property to acquiring it? Here is what you should expect from start to finish:

1. Research: Define your budget, including stamp duties, legal fees, and renovation costs. Identify suitable property types and locations based on your investment goals.
2. Engage a legal team: Appoint a local conveyancing solicitor and a licensed property agent. If you are a foreign investor, work with professionals experienced in handling non-resident transactions.
3. Negotiate and secure an Option to Purchase (OTP): Once you find a property, negotiate the sale price and request an OTP from the seller. You’ll typically pay around 1% deposit upon receiving it.
4. Due diligence: Your solicitor should help verify ownership, zoning, and title records. You may also commission a property survey to assess the building’s condition and compliance with URA regulations.
5. Completion: To finalise the purchase, exercise the OTP, sign the required documents, and pay the remaining balance, along with all applicable taxes and fees. Once completed, the property title is legally transferred to your name.

Conclusion

Buying a commercial property in Singapore offers investors a chance to tap into one of Asia’s most stable and business-friendly markets. From understanding property types and ownership rules to managing taxes, financing, and due diligence, a well-planned approach helps you maximise long-term returns while minimising risks.

Using a dedicated business account also ensures compliance with Singapore’s tax and accounting regulations by keeping your property income and expenses separate from personal funds, giving you clarity and peace of mind as your portfolio grows.

For foreign investors, handling large cross-border payments quickly, securely, and at low cost is crucial. With a Wise Business account, you can send high-value overseas payments at the mid-market rate with volume discounts for larger amounts. You can also receive and hold rental income in its original currency, helping you manage global finances efficiently, while avoiding unnecessary foreign currency conversion fees.

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Sources:

1. Additional Buyer’s Stamp Duty (ABSD) | IRAS
2. Singapore announces new property cooling measures | CNA
3. Master Plan | URA Singapore
4. Foreign ownership of property | Singapore Land Authority
5. Guide to Buying Commercial Property in Singapore | PropertyGuru
6. Buyer’s Stamp Duty | IRAS
7. Property Tax Rates | IRAS
8. Annual Value | IRAS]
9. Seller's Stamp Duty (SSD) for Industrial Property | IRAS
10. How to Get a Commercial Loan | PropertyGuru
11. Mortgage Servicing Ratio and Total Debt Servicing Ratio Rules | MAS
12. A Comprehensive Guide to Singapore Commercial Property Loans | Lendingpot
13. Current URA GLS Sites | URA

Sources checked on: 26 Oct 2025