Freehold Condo – Everything You Need To Know
In Singapore, a property’s ownership is entitled as either freehold or 99- year leasehold. An option of 999-year leasehold also exists but due to the length of the tenure; it is better to count it as a freehold property as well. A freehold condo is referred to as a property that you own forever. But that is over-simplification. Let’s understand the actual definition of the freehold property regarding it’s ownership, advantages, disadvantages and limitations around it.
What is a Freehold Condo
A freehold property means that you are the owner of a plot of land. Any construction, such as a condominium, on the land also belongs to you. In addition to this, you are free to your will so as to make modifications to the interior of the condo. The same is also true about the exterior, but you have to cross-check it with the condominium corporation. Reason being, even if it is a freehold condo, the external modification has to abide by some limitations set by the corporation.
On the other hand, the onus goes to the owner for upkeeping the condo, maintaining the interior as well as exterior, garden and landscaping. The corporation can maintain a few parts of the exterior such as access route to the main gate, common garden, Parking, etc.
Understanding the Ownership
The ownership remains in effect in perpetuity. In a layman language, the owner possesses the property till infinity. But, it comes with a caveat. A freehold property can be acquired, even against your will, by the government agencies such as military or development authorities if needed for a military base or making way for the new population. A little relief, you receive compensation at the market price.
Why is Freehold Condo Important
A freehold condo holds some advantages over its leasehold counterparts. No doubt, it has a higher potential for en-bloc sales, a higher pace of price appreciation, and zero limitations on using the Central Provident Fund. A leasehold property depreciates at a higher rate over its tenure. On the other hand, a freehold property still outperforms. Moreover, if the freehold condo is with a terrace, you have hit the jackpot.
Who Should Buy Freehold Condo
If you are a person with investment mindset who seeks for opportunities, then a freehold condo is the right fit for you. Over the time, a freehold condo proves to be profitable with a higher rate of appreciation in prices. Besides, in case, you want to pass on your real estate assets to your descendants or want some wealth preservation, a freehold condo should be your choice.
Additionally, if you love having complete privacy, no doubt a freehold condo will serve you better.
How Can Freehold Condo Help in Your Investment
A freehold condo as a property can help you drastically in investment. You can avail yourself some profiteering price during the en-bloc sales as freehold condos have long-term stability in their value. Unlike leasehold condos, the market value of freehold condos remains 10-15 percent higher that can bring you some incredible earnings.
Moreover, if it is at some prime locations providing ease to amenities like malls, train station, schools, etc. the profit can be much higher.
Also, you can get some easy loans for buying freehold properties rather than using your CPF savings. Please note that lending institutes are reluctant to offer loans on condos with short leases, and Central Provident Fund can’t be used to buy a property with less than 30 years or shorter lease left.
What Are the Advantages Of Freehold Condo
A freehold condo comes with a bagful of benefits such as:
- The owner can transform or make changes to the internal and external structure of the unit and the landscaping of the area such as gardens, lawns, etc.
- There are no stringent rules and regulations to be followed by the Freehold residents. You are free from the burden of electing board members, requesting meetings or voting as in the case of regular condos.
- Requires fewer rules for transferring the property or title of ownership.
- It brings a higher privacy to your family and yourself.
- You can hold your property for an infinite period.
- To procure money for the property payment, you can use your Central Provident Fund without any restrictions.
What Are the Disadvantages Of Freehold Condo
There is also an another side of the coin. A freehold condo has some disadvantages too. Although not much fierce you should be aware of them:
- Requires bigger investment than leasehold condo.
- The owner still has to pay for maintenance charges for some common property elements such as playground and parking.
- The freeholder has to bear large amounts for maintaining the unit and the landscaping.
- Don’t assume freehold condo as a ‘Carte Blanche’ or complete freedom to do anything. There may be some provisions that the condo corporations can impose on you such as you have to seek for permissions before modifying the exterior.
- The government can retain the freehold property, in case, the property is required for setting up a military base or vital infrastructure such as expressways. If the government reclaims the land you owned, you will get compensation at market value.
Summary of Buying Freehold Condo
If you are looking for a new house to reside in, a freehold condo is an excellent choice as it gives you a real sense of ownership with modifications right. Besides, with a real estate aspect, investing in freehold condo will result in greater returns during the en-bloc sale. You can buy a condo without much funding problems. Although the hammer of Land Acquisition Act may strike your ownership yet, it happens rarely, and you do not need to remain in a paranoid state. In short, a freehold condo is a fruitful housing and investment option.
In our portals, we only featured all the freehold properties in Singapore as we understand the special niche of investors that are incline towards freehold ownership.
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