Important Considerations for Landed Transaction

Why Landed?
1. Limited Supply - Based on statistics from the last 10 years of data before 2021, landed property supply has only increased by 5.1% compared to 60.6% for non-landed. As a result, the scarce supply of Good Class Bungalow (GCB) went from S$300psf to more than S$1000psf after 2008 when people saw the value of landed properties that have driven capital appreciation.

2. High Demand - In land-scarce Singapore, only about 5% of the population lives in landed properties, hence it remains one of the aspirations of many citizens to be part of this exclusive segment. Foreigners who are used to staying in the landed precincts in their home country will continue to drive demands for landed rental since they are unable to own landed property with the exception of Sentosa Cove.

3. Lifestyle - Landed home allows ample space to house multi-generational members or host guests and private facilities such as a patio garden, full equipment gym, or spa pool within one own compound to fulfill the needs and aspirations of the family or each individual.

Perform Self-Qualification Checks
1. For buyers, to ensure loan in-principle Approval (IPA) is obtained to secure sufficient loan amount with cash buffer for renovation else after purchase additional funds may be needed especially for an extensive rebuild.

2. Do check on the land property bank valuation to avoid overpaying for the premium due to the land plot size and shape, elevation, or location. Some banks may give higher valuations so is good to compare around and request around for a few bank valuations. Getting an independent valuer will need paying out of own expense and the banks may not recognize them to help obtain a more favorable loan.

3. For foreigners planning on landed property ownership purchase, application submission subject to approval (12-months validity) is needed from Land Dealings Approval Unit (LDAU) under SLA.

Planning & Budgeting
Checks with the relevant authorities to facilitate transactions especially if the buyer intends to undertake major reconstruction work.

1. Obtain a Road Line Plan (RLP) from the Singapore Land Authority (SLA) online portal (INLIS), especially if the land plot is next to a major road (Cat 2 that requires a setback of 12m) or expressway (Cat 1 that requires 24m of setback), or roads with Cat 3, 4 or 5 that has a setback of 8m which typically is used as a car porch area. Do not fret if you encounter a landed property that you fancy but may be affected by the road reserve requirement. There are many creative ideas that you can discuss with your architect or builder to repurpose the setback area into a mini lap pool, raised patio, or Japanese garden that should not be part of the building structure.

2. Another important step is to obtain the Drainage / Sewage Interpretation Plans (DIP/SIP) that are maintained by the Public Utilities Board (PUB) from the same INLIS portal since there are restrictions to construct building structures over sewers or manholes. For a sewer line or manhole within the land, a minimum building setback from the sewer line is required and no roof over the manhole is allowed under the PUB requirement. A deficient building setback or proposed new structure over the sewer line can be allowed if a sewer trench with an access panel is provided at the stretch of the sewer line that is not in compliance with PUB requirements. Another option subject to approval from PUB is to move the sewer at one's own expense which will need to be taken into consideration as part of the price negotiation and development budget.

3. For those that intend to build basement or underground piling needed to support dedicated beam structures to construct additional floor levels, it is prudent to obtain the Railway Protection Plan (RPP) to ensure that the intended depth can be met due to depth restriction that will not impact the subterranean line network plan (e.g MRT, cables). Soil investigation is also necessary to check on the strength, density, compaction, contamination, organics, and sand content to determine whether piling or footing is suitable for the development. Do check with your builder whether soil tests should be conducted in the event that no major piling is allowed as the alternative micro-piling is typically x3 times more costly.

4. Another important activity that needs to be carried out is the Topographical Survey. The survey plan will indicate the actual boundary line of the land to ensure the proposed building does not encroach into state land or neighboring land. Features such as sewer lines and manholes within the land will also be reflected in the survey plan. In addition, each land plot can have its own separator wall of up to 1.8M because there can be instances where previously both the neighbors may be sharing a common boundary wall. If the proposed plan involves extending the existing main entrance, approval from LTA, NParks, and PUB is required.

5. Before construction commences on the landed property, is it strongly advisable for the builder to conduct a Pre-Condition Check Report (PCR) of its immediate neighbors in case disputes arise during the construction phase.

5. It is also good practice to check with your builder as generally sewer line cannot be rerouted while the drainage line can be rerouted. For lines that cannot be re-routed, reinforce concrete has to be built around the structure which will increase the development cost. Typically, every additional floor level upward costs about S$200k to build. To extend downward for basement level usage, an additional 2-3 times multiple at S$400-600K should be budgeted due to additional waterproofing, ventilation, and reinforcement needed.

Determine the Type of  Construction
1. For Additions & Alterations (A&A) work that constitutes minor renovation work, generally no planning permission or inspection is required by BCA. Below is the list of minor renovations where planning permission may be required.

2. For reconstruction that involves structural changes, 50% or more increase from current GFA, or increase in building height, Structural Plan approval by BCA is required. One advantage is that it is not mandated to build a bomb shelter. However, the existing interior ceiling height cannot be increased to accommodate a loft or double volume ceiling (4.5M-6M). In addition, it can be even more expensive to add an additional floor level as separate beams with load footing or piling need to be built to co-exist with the current structure.

3. For homeowners who want full flexibility in their architectural design can tear down the existing structures to undertake rebuild. It includes the option to build a basement as an entertainment or car docking area or control the ceiling height to include a mezzanine area to increase GFA at every level. But note that bomb shelters have to be provided for all new buildings under building code.  For Mixed-Development Zoning, an extension building with a maximum of 15.5m height restrictions can be built to maximize the GFA together with the landed unit.

To give a cost estimate, S$350-400psf for rebuilt and S$100-150psf for interior design features such as finishing, and tiling quality (e.g. marble standard cut compared to fitted cut that has customized size to floor plan). Demolition before a rebuild for landed typically has similar costs with condominiums at around S$200k.

Determine the Type of Asset Enhancement
To preserve and enhance the future value of landed properties, typical upgrade to take into consideration includes the following:  

1. Electrical & EV Charging
Upgrading from single-phase (240VAC) to 3-phase (400VAC) electrical lines and distribution routing from power substation is essential as the single-phase 63A may be insufficiently sized to power the modern building system (e.g. air-conditioning, smart home, full kitchen equipment, heating pump). In addition, with the move from the Singapore government to push for the electrification of the vehicular population, LTA has adopted the TR25 standard for EV supply equipment (EVSE) using the mandated Type 2 (AC only), Combo-2 (AC & DC), or the optional CHAdeMO (DC only) standards. Before installation, do check if the proposed EVSE is issued with a Letter of No Objection (LNO) from the LTA EV Charging System Verification Panel (EVP) that depending on approved models, is able to support a charging capacity of 7-10kw (approx 6-7hr AC charging time) to 250-300kw split system for multiple cars (approx 1hr AC-DC charging) from ABB, BMW, BYD, Mercedes, Porsche, Schneider Electric, Siemens, TESLA, and many other brands. Note that one is also required to conduct regular inspections by a licensed electrical worker (LEW) for maintenance records.

2. Roofing
Roofing replacement helps to protect from water leakage. A change of the roof tiles only that does not affect the existing roof shape structure or increase in height typically does not need to submit for BCA approval. Metal roofing using aluminum alloy can be a cost-effective option and allows shape-forming that is subject to approval using rivet joint so proper waterproofing is needed to prevent water seepage. Traditional tiling allows flexibility in expansion and contraction thus providing excellent protection. Water gutter is now no longer allowed so rainwater is free falling. Note that the new roofing cannot be higher than the neighbor.

3. Lift Elevator
Due to Singapore's aging population, a lift elevator system that typically cost S$50k-70k to build for new development is now an integral part of our changing demographic especially if there are elderly staying together. Based on BCA requirements, elevators in Singapore use either the SS-550 or EN 81-41 system. The required internal shaft floor area for the smallest size that fits 4 persons or a person including a wheelchair is 1.6sqm for traction lift and 1.5sqm for hydraulic lift. In addition, do check with your installer on the airwell to accommodate the elevator overhead (clearance of 3.5m is required for traction lift) and elevator pit (require by a traction lift system at 1.2m depth and hydraulic system at 0.50m depth to house the equipment). For houses that do not have suitable airwell space, a platform lift that can cost up to $60k can be built outside and attached to the house.

4. Swimming Pool
Depending on the terrain and outdoor space available for the water pump, treatment, and filtration system, one can opt for the classic in-ground sunken pool that allows full flexibility on the shape and finishing such as decking, mosaic tiling, stainless steel, jet spa. or lighting system. For waterproofing materials of the pool lining, there are choices ranging from vinyl, fiberglass, or concrete which is the most durable. However, if space or terrain is a constraint, do check with your builder if an above-ground raised pool that comes in either soft or rigid-side lining can be mounted at the top of the building for creative use of roof terrace that most of the time is left under-utilized.  Note that under building code, unlike the sunken pool that can abut to the boundary wall, the raised pool has to comply with the setback restriction (2m side and rear boundary, 7.5m from road reserve line). In addition, the swimming pool requires regular maintenance (around $100 monthly) such as weekly powder by the external vendor to regulate the water PH level.  

Buying Alienated State Land
State land may be gazette by authority for power substation or park, else can be purchased from SLA subject to approval by paying a Development Charge fee that can be a relatively cheaper option compared to buying an old house to demolish and rebuild. Note that SLA may inform adjacent land owners and if they are interested in the state land to commence a tender bidding exercise.

Get the Right Professional Team
With so many aspects to consider in a landed transaction, it can be quite a daunting task to manage especially with a busy work schedule and family commitment to balance. During your next landed property viewing, do reach out to us as we partner with BCA registered builder for FREE complimentary on-site inspection.