Guide

Buying commercial property: offices, shops and medical suites

Commercial property covers strata offices, shops, food and beverage units and medical suites. It is bought either to run a business from or to let to one, and the purchase works differently from buying a home in four ways: what the unit may be used for, GST, stamp duty and the loan. This guide covers each, then lists the points that most often catch buyers out.

Approved use comes first

Every commercial unit has an approved use, set through URA's planning permission for the development. An office unit is approved as office, a shop as retail, a clinic as a medical or health use, and so on. Changing the use, for example running a clinic from a unit approved as office, needs fresh approval, and some uses also need clearance from the relevant agency, such as the Ministry of Health for a medical practice.

Before you buy, compare the use you need with the approved use in the sales documents. If the two differ, ask whether a change is possible before you commit, not after.

Mixed developments add a layer. A single building may contain homes, shops and offices. Only the non-residential units are commercial property; the homes in the same building follow residential rules.

GST

GST applies to sales of non-residential property. When the seller is GST-registered, as developers of new commercial units are, GST at the prevailing 9% is charged on the price. A buyer that is GST-registered and uses the unit to make taxable supplies, such as a trading company running its office there or a landlord letting it with GST charged on the rent, can generally claim the GST back as input tax, subject to IRAS's conditions.

A buyer that cannot claim it, such as an individual who is not GST-registered, or a business making exempt supplies, carries the GST as part of the cost. In a mixed-use property, only the part approved for non-residential use is subject to GST.

Stamp duty

**Buyer's stamp duty** on commercial property uses the non-residential scale: rates of 1%, 2%, 3% and 4% on successive slices of $180,000, $180,000, $640,000 and $500,000, then 5% beyond $1.5 million. As with all BSD, it is assessed on price or market value, whichever is greater, and must be paid within 14 days of signing.

**ABSD** does not apply. That duty is charged on residential property only, so an individual who already owns homes, or a foreign buyer, pays no ABSD on a shop or office.

**Seller's stamp duty** schedules exist for residential and industrial property only, so a commercial unit sold soon after purchase does not attract SSD under either. The seller's stamp duty guide sets out the two schedules that do exist.

Financing

An individual borrowing to buy commercial property is assessed under TDSR: the new loan plus every existing repayment may not take more than 55% of what the borrower earns each month before deductions. For non-residential property, banks test the instalment at an interest rate of at least 5% a year, the MAS floor for non-residential loans, against 4% for homes. That higher floor means a given income supports a smaller loan for a shop or office than for a home.

The loan-to-value tables published by MAS are written for housing loans. On a shop or office, the margin a lender offers is its own call, typically weighing the unit's use, location, tenure and lettability. Companies buying in their own name are assessed on their accounts and may be asked for personal guarantees from directors.

Expect to fund the deposit and costs of a commercial purchase from cash, since CPF savings are reserved for housing.

Tenure and lettability

Many commercial units are on 99-year leases; some older city sites are freehold. For a buyer who will let the unit, tenure and location together shape the rent and the pool of likely tenants. Office demand follows business districts and transport, retail follows footfall, and medical suites cluster near hospitals and established medical centres.

Costs beyond the price

  • GST, unless claimable.
  • Buyer's stamp duty on the non-residential bands.
  • Legal fees for the purchase and the mortgage.
  • Maintenance charges and sinking fund contributions set by the management corporation.
  • Property tax at the non-residential rate.
  • For a medical or food use, fitting-out costs that can be significant.

Uncompleted commercial units

New commercial units bought from a developer before completion are paid for in stages, much as homes are. The Sale of Commercial Properties Rules set out a standard schedule tied to construction milestones, from foundation work through to the temporary occupation permit and completion. The progressive payment guide explains the residential schedule, which follows a similar pattern.

Commercial projects in this guide

The directory includes office and retail projects such as ARC 380 on Jalan Besar, Cecil Place in the city, One Sophia, The Golden Mile and Woods Square in Woodlands. The commercial type page lists them together.

Calculators

The commercial purchase calculator works through price, GST, stamp duty and the loan for a non-residential purchase. The industrial and commercial stamp duty calculator applies the non-residential bands to a price you enter.

Sources and date checked

Figures checked on 12 November 2026 against these primary sources:

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