Understanding Property Ownership Structures for Families Buying Property in Singapore

For many families in Singapore, buying a property is more than just a financial decision — it is part of long-term family planning. This is especially true when parents are purchasing a property for their children, whether as a future home, an asset for stability, or part of generational planning as a gift to the love one.

While most buyers focus on price, location, and financing, how the property is legally owned is just as important. The ownership structure affects legal responsibility, control, financing options, and what happens to the property in the future.

This article aims to help families understand the basic key ownership considerations when buying property for children, based on whether the child is below or above 21 years old, and the role of trust arrangements in property ownership planning.

Why Ownership Structure Is a Critical Decision

Property ownership is not simply about whose name appears on the title deed. The chosen structure determines:

• Who legally owns the property

• Decision of share for allocation

• Who is responsible for financing obligations

• Things to consider for ownership structure

  
  

For families buying property with children in mind, these questions become even more important, as the legal framework differs significantly based on age.

Who Legally Owns the Property

Legal ownership refers to whose name is registered on the property title. This determines who is recognised by law as the owner and who has the authority to make decisions relating to the property.

When parents purchase property involving their children, legal ownership can generally fall under one of the following scenarios:

• Direct ownership by the child (if aged 21 and above)

• Joint ownership between parent and child

• Ownership held under a trust (if the child is below 21)

  
  

Understanding how legal ownership works helps families avoid confusion and unintended consequences later.

Joint Ownership Between Parent and Child

The parents and children may jointly own a property. In such cases, ownership is structured under either Joint Tenancy or Tenancy-in-Common.

Joint Tenancy

• The parent and child jointly own the entire property

• Ownership shares are not defined

• Both parties have equal legal rights to the property

• If one party passes away, ownership automatically transfers to the surviving owner

Pros

• Simple ownership structure

• Automatic transfer of ownership

• Clear outcome in the event of death

Cons

• No flexibility to define ownership shares

• Parent cannot direct their interest to another beneficiary

• Limited control over future succession planning

Tenancy-in-Common

• Parent and child each own a defined share of the property

• Ownership shares can be equal or unequal

• The minimum share from 1%

• Each party’s share is treated separately

  
  

*There is no automatic transfer of ownership upon death.

Pros

• Clear definition of ownership interests

• Greater flexibility for long-term planning

• Suitable when financial contributions differ

  
  

Cons

• More complex than joint tenancy

• Requires careful documentation

• Future decisions require coordination between parties

Ownership When the Child Is Below 21

In Singapore, property ownership is restricted to individuals aged 21 and above. When parents wish to involve a child below 21 in a property purchase, the property must be held under a trust, with a trustee appointed to manage it on the child’s behalf.

• The child cannot legally own property

• Joint tenancy and tenancy-in-common cannot be used

• Parents hold the property as trustees

• The child is the beneficial owner

In this case, legal ownership is structured through a trust arrangement rather than shared ownership.

What Is a Trustee?

A trustee is a person who legally holds and manages a property on behalf of someone else, known as the beneficiary.

• Parents are commonly appointed as trustees

• The child is the beneficiary

• The property is held for the child’s benefit, not for the parents’ personal ownership

  
  

Although the trustee’s name appears on the property title, the trustee does not own the property for personal use.

The Role of Trustees in Property Ownership

Trustees are responsible for managing the property in a way that protects the beneficiary’s interests. This includes:

• Ensuring the property is properly maintained

• Making decisions that benefit the child

• Managing rental income or expenses responsibly

• Acting in accordance with the trust deed

  
  

Trustees must always act with care and integrity and cannot use the property for their own advantage.

Why Trusteeship Matters for Families

• Plan early for their child’s future

• Ensure the property is clearly designated for the child

• Provide a structured and compliant way to hold property for minors

  
  

However, trusteeship also comes with legal responsibility and should be entered into with a clear understanding of the obligations involved. For parents buying property for children, understanding the trustee’s role helps set the right expectations and ensures the property is managed in the child’s best long-term interest.

Decision of Share Allocation

Share allocation determines how ownership interest is structured among parties. This affects control, liability, and future planning.

For Children Below 21

• There is no share allocation to the child

• The entire property is held under trust for the child’s benefit

• Trustees do not “own a share” for themselves

  
  

The trust structure focuses on beneficial interest, not ownership percentages.

For Children 21 and Above

• Ownership can be structured in various ways depending on intentions

• Share allocation must reflect true ownership and contribution

• All parties’ rights and responsibilities are defined by the ownership structure

Who Is Responsible for Financing Obligations

Financing responsibility determines who is legally liable for loan repayments and related obligations. In many cases, parents may act as co-borrowers when the child does not meet the bank’s minimum lending criteria. By doing so, the combined income profile may support a higher loan amount, and both the parent and child will be jointly responsible for the loan repayment.

Trust Structure (Below 21)

• Financing is assessed conservatively by banks

• Trustees are not automatically considered borrowers

• Loan eligibility depends on trust terms and beneficiary profile

• In general, parent will act as co-borrower for the loan

Direct Ownership (21 and Above)

• The child is responsible for loan obligations

• Loan eligibility is assessed based on the child’s income

• Parents may assist through approved financial support structures

Example: A working adult child applies for a home loan based on personal income, while parents provide financial support separately.

Things to consider for ownership structure

Buying a property together with a loved one is a significant family decision, but it is important to understand the underlying considerations to prevent unintended complications later on.

Financial planning is a critical consideration when purchasing property with a child. Regardless of whether the child is above or below 21 years old, their financial standing may not be sufficient to meet bank lending criteria. In such situations, parents often step in as co-borrowers to strengthen the loan application and jointly the repayment obligations.

Financial consideration :

• Addition Buyer Stamp Duty - For purchasers who already own a residential property, an Additional Buyer’s Stamp Duty (ABSD) of 20% for the 2nd housing may apply. In joint ownership arrangements, ABSD is generally assessed based on each owner’s respective ownership share. A child who is a first-time buyer may be exempt from ABSD on their share, subject to prevailing regulations.

  
  

• Loan-to-Value (LTV): For purchasers who are still servicing a loan on their first residential property, the maximum loan-to-value ratio for a second property is lower. Instead of the usual 75%, the loan amount is generally capped at 45%. In addition, buyers should also consider loan tenure, which is typically determined by the age of the borrowers and may be capped at up to 30 years.

• Total Debt Servicing Ratio (TDSR): TDSR limits the total monthly debt repayments to no more than 55% of a borrower’s total gross monthly income. This includes repayments for existing property loans, car loans, personal loans, and other financial obligations. TDSR affects the maximum loan amount and the monthly repayment for any new property purchase.

ERA provides a sophisticated financial calculator to give you an initial overview of your financial situation before making any decisions. Feel free to contact me for any questions or assistance with financial calculations.