Usually for residential properties, we are able to use our Central Provident Funds or CPF funds to fund our residential property purchase. We may sometimes also wonder if we can also do the same for industrial or commercial properties in Singapore. Let’s find out if it is possible to use our CPF funds for industrial or commercial properties.
Unlike Residential Properties
As for industrial or commercial properties, you may note that unlike residential properties, you will not be able to use your CPF funds to fund the purchase of a warehouse, factory or office unit. CPF funds may be utilised for residential properties such as HDB, condominium units or landed properties but not for industrial or commercial properties.
Apart from noting that CPF funds may not be used, you may also take note that most of the time, Good and Services Tax (GST) may be applicable for industrial & commercial properties if you are purchasing from a GST registered owner. While not all owners are GST registered, most reputable owners are GST registered. If you are renting industrial or commercial properties, GST will also be applicable if you are renting from a GST registered owner. You may also note that it may be possible to voluntarily GST register your company even if it is not mandatory in order to claim back the GST amount.
Loan to Value May Differ
Another point to note will be the Loan to Value or LTV amount which may differ from residential property purchases. Depending on the type of industrial or commercial properties, you may be able to take up a loan quantum of up to around 80% of the valuation of the property. However, do note that this would vary from bank to bank and financial assessment would also be done before the bank will be able to let you know the final loan amount that you will be able to take up depending on your company’s financial standing.