Development finance

Property Development Financing in Singapore

Development financing is assessed on the quality of the site, project feasibility, developer experience, sales strategy, regulatory position, and ability to fund cost overruns before the project reaches completion and sale.

Typical bank assessment

Financing and Documentation Overview

Securing a property development loan requires a rigorous credit assessment and a clear project roadmap. The figures below are typical market guideposts and remain subject to the bank's credit approval, valuation, project cost review, presales, developer track record, and security structure.

Feature	Details
Land loan LTV	Typically up to 70% to 80% of land cost or valuation, subject to bank assessment.
Construction loan LTV	May fund up to 100% of approved construction costs, commonly disbursed progressively against architect or quantity surveyor certification.
Total loan cap	Generally monitored against the lower of cost, valuation, and 70% to 80% of Gross Development Value (GDV).
Interest rates	Usually floating, such as SORA plus a bank margin, or pegged to the bank's internal cost of funds. Indicative all-in pricing may fall around 3% to 5% p.a. depending on project and borrower profile.
Essential documents	URA Written Permission, project feasibility studies, cash flow projections, construction budget, sales assumptions, valuation, and proof of developer experience.

Residential development threshold

Regulatory Thresholds: Small vs Large Scale

For residential projects, the key threshold is whether the development comprises more than four units. Projects above that threshold fall under the Housing Developers (Control and Licensing) Act framework.

Requirement	Small Developers (1-4 Units)	Large Developers (5+ Units)
Developer's licence	Generally not required under the Housing Developers Act threshold.	Mandatory. A housing developer's licence must be obtained from the Controller of Housing before commencing the housing development.
Project account	Generally not required under the licensed housing developer regime.	Mandatory. Licensed developers must open and maintain a regulated Project Account for the housing project.
Usage of funds	More flexible, subject to lender conditions and normal corporate governance.	Regulated under Project Account rules, with withdrawals generally tied to permitted project-related purposes.

Tax and timing risk

Stamp Duty and ABSD Remission Timelines

Stamp duty planning is often one of the most important parts of a development feasibility study. For residential development sites, qualifying housing developers are generally subject to 40% ABSD, of which 35% may be remitted upfront if strict conditions are met. The remaining 5% is non-remittable.

Tax category	Small Developers (1-4 Units)	Large Developers (5+ Units)
Buyer's Stamp Duty (BSD)	Up to 6% for residential property, non-remittable.	Up to 6% for residential property, non-remittable.
Base ABSD rate for housing developers	40%, if the property is acquired for qualifying housing development.	40%, if the property is acquired for qualifying housing development.
Upfront remission	35% may be remitted upfront, leaving 5% payable.	35% may be remitted upfront, leaving 5% payable.
Execution timeline	Commence development within 2 years, then complete and sell all units within 3 years from acquisition.	Commence development within 2 years, then complete and sell all units within 5 years from acquisition.
Clawback risk	Failure to meet conditions can trigger clawback of the remitted 35% plus 5% p.a. interest.	From 16 Feb 2024, qualifying projects that sell at least 90% of units may receive reduced clawback rates, subject to IRAS conditions. Below 90%, the full remitted 35% may be clawed back with interest.

Holding structure

Strategic Advantages: Corporate vs Personal Name

For a development project, whether residential subdivision or a specialised commercial facility, a corporate structure can provide practical risk management and execution advantages. The correct structure should still be reviewed with legal and tax advisers before acquisition.

Liability insulation

A Pte. Ltd. structure helps separate personal assets from construction risks, contractor disputes, and project-related debts.

Borrowing capacity

Corporate mortgages are generally assessed at company and guarantor level, and may preserve individual borrowing plans for personal investments.

Tax planning

Singapore corporate income tax is a flat 17%, while personal income tax tiers can go higher. GST-registered companies may be able to claim input tax on taxable business expenses if IRAS conditions are met.

Corporate structures make it easier to split equity if partners enter the project.
A company may provide a cleaner succession or exit route if the business entity is sold.
GST recovery depends on GST registration, the nature of supplies, and input tax rules, so it should be confirmed before modelling savings.

No-obligation assessment

Documents Required

Please prepare the following documents so we can evaluate your eligibility.

URA Written Permission or planning status
Option to Purchase or sale and purchase agreement for the development site
Project feasibility study, GDV assumptions, and cash flow projections
Construction budget, professional fee estimates, and expected timeline
Latest 6 months' corporate bank statements
Latest 2 years' financial statements or management accounts
Latest ACRA business profile
Copy of NRIC for directors and guarantors
Latest 2 years' Notice of Assessment for directors and guarantors
Track record or proof of relevant development experience, where applicable

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References

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Important note

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