Freehold vs. 99-Year Leasehold: Singapore Property Guide

At a Glance

• Freehold: Permanent ownership, ideal for inheritance, but costs 10–15% more.
• Leasehold: 99-year limited ownership, but offers higher rental yields and modern facilities.
• 2026 Outlook: With the 60% ABSD for foreigners still in effect, renting is recommended until you obtain PR status.

If you are new to Singapore and looking for a home, the first thing that might confuse you is the concept of "ownership." While in many countries it is standard to own land and buildings permanently, Singapore operates heavily on the concept of leasing land from the state for a specific period.

For parents considering settling down for their children's education or career, you've likely wondered: "Should I buy a Freehold property to pass down to future generations, even if it's expensive?" or "Should I go for a more cost-effective 99-year Leasehold?" Today, we will break down the differences between these two using the latest 2026 market data.

1. Types of Ownership: Freehold vs. 99-Year Leasehold

Residential properties in Singapore are generally divided into three types, but most condos are either Freehold or 99-year Leasehold. (There are also 999-year leaseholds, but these are effectively treated the same as Freehold.)

• Freehold: As the name suggests, this is permanent ownership. The land value does not disappear over time, making it a favorite for those focused on "legacy planning" (asset inheritance). These are often found in traditional prime districts like Districts 10, 11, and 15.

• 99-Year Leasehold: This involves leasing the land from the Singapore government for 99 years. In principle, the land must be returned to the state when the lease ends. However, most new condos and large-scale developments near MRT stations are leaseholds, offering much higher convenience for daily living.

2. Yields and Depreciation: Remember the "60-Year Rule"

If you are approaching this as an investment, you must understand "Lease Decay." The value of a leasehold condo typically begins to decline more rapidly once the remaining lease drops below 60 years. This is because it becomes harder for the next buyer to secure a bank loan and there are restrictions on using CPF (Central Provident Fund) savings.

• CPF Usage Restrictions: In Singapore, the remaining lease must cover the youngest buyer until the age of 95 to utilize 100% of the allowed CPF funds. If the lease falls short of this, the usable amount decreases, which significantly dampens buyer demand.

• Bank Loans: Generally, if the remaining lease is less than 30 years, banks are unlikely to grant a mortgage. Therefore, if you buy a leasehold condo, an "exit strategy"—selling within 20 years of completion—is essential.

On the other hand, rental yields are often more attractive for leaseholds. Tenants care more about the condition and location of the home than whether it is freehold. Since the purchase price is lower but the rent is similar, leaseholds naturally have an advantage in terms of yield.

3. 2026 Market Trends and Tax Benefits

Moving from 2025 into 2026, the Singapore real estate market is showing a steady upward trend. As of 2025, private residential prices rose by about 3.3%, entering a period of stability. Interestingly, with the launch of many luxury new developments in the Outside Central Region (OCR), the median price for leaseholds reached SGD 1,973 psf, slightly surpassing the freehold average of SGD 1,903 psf.

• Additional Buyer’s Stamp Duty (ABSD): Currently, foreigners must pay a staggering 60% ABSD to purchase a home in Singapore. If you buy a property worth SGD 2,000,000, you would have to pay SGD 1,200,000 in taxes alone. Consequently, most Korean residents wait until they obtain Permanent Residency (PR) to lower the ABSD to 5% before buying.

• 2026 Property Tax Rebate: The Singapore government announced a one-time 10% property tax rebate for owner-occupied private residential properties in 2026, capped at SGD 500. This measure is intended to ease the burden on homeowners in a high-interest-rate environment.

4. Practical Buying & Renting Strategies for Parents

What is the wisest choice for parents who have moved to Singapore for their children's education? Based on my experience and local cases, here are a few tips:

• If Renting, Location is Everything: As a tenant, the type of ownership doesn't matter at all. It is far more important to check if the school shuttle bus stops there, if there is a Cold Storage (supermarket) nearby, and if it is within walking distance to an MRT station. Large leasehold developments often have better community facilities, which can be better for raising children.

• If a PR, Consider New Leaseholds: For your first home, I recommend new leasehold launches where you can aim for capital gains. While freehold properties hold their value, their price growth is often less dynamic than that of new leasehold developments.

• Check the Master Plan: Before deciding on a home, always check the "URA Master Plan 2025." Even if the view is great now, you could face a major setback when selling if there are plans for a new condo or highway right in front of your unit.

Things to Remember!

To summarize: "Choose Freehold if you want a home to live in long-term and pass down to your children; choose Leasehold if you want to stay for about 10 years while prioritizing capital gains and convenience." Especially for foreigners, due to the 60% ABSD, I strongly recommend getting to know different neighborhoods through renting before making a hasty purchase.

If you have any questions, feel free to leave a comment, and I will do my best to answer! Wishing you a happy life in Singapore.

Sources

• PropertyGuru: Freehold vs Leasehold Guide
• CPF Board: Housing Usage Rules
• IRAS: Property Tax Rebates 2026
• URA: Private Residential Property Price Index

Exchange Rate: 1 SGD ≈ 1,150 KRW (As of Feb 6, 2026)