Set up own company to get mortgage

stewpig

stewpig

High Supremacy Member
Joined
Jan 29, 2014
Messages
26,854
Reaction score
1,193
If you set up own company, make yourself a director and pay yourself a salary.

Any problems in getting a mortgage?
 
H

hindsight

Master Member
Joined
Apr 25, 2006
Messages
2,629
Reaction score
1
Need 2 year tax returns for people who are self employed.

If you are using income from directorship then it can be considered employee, but banks will still assess you on a case by case basis.
 
Last edited:
T

Toni90

Senior Member
Joined
Mar 18, 2017
Messages
924
Reaction score
2
U will got problem paying CPF and income tax. Then if borrow too much bank will check and find out your company no up. Then reject your application.
 
wira

wira

Supremacy Member
Joined
May 6, 2000
Messages
5,749
Reaction score
763
Am sure they will also check the company P&L. If suspicious they probably will reject.

Plus declaring high salary also means you need pay high income tax. Not worth it.
 
E

existential_reality

Senior Member
Joined
Aug 11, 2017
Messages
639
Reaction score
36
It depends on the type of company you setup, if sole proprietor/partnership the loan will be assessed based on the owners ability to make payment (guarantors). If its a Pte Ltd company then it'll be assessed on the company income/profit and a host of other factors.

This only make sense for industrial/commercial investment considering residential properties owned by entities gets hit with 25% absd

stewpig said:
If you set up own company, make yourself a director and pay yourself a salary.

Any problems in getting a mortgage?
Click to expand...
 
henrylbh

henrylbh

Arch-Supremacy Member
Joined
Mar 9, 2004
Messages
16,154
Reaction score
859
stewpig said:
Hmm its not to avoid duty. It’s to get a larger mortgage from the bank.
Click to expand...

You own company, you can pay yourself what you want. No need to tell lender that you are director an shareholder of the company.

For property mortgage, I think the lender will you need to show CPF contributions for a year. If you company is not profitable, will it be able to contribute CPF and you need to declare income tax on your salary, though you need not take the net pay if your company got no liquid funds.
 
T

terryhoho

Senior Member
Joined
Apr 23, 2006
Messages
1,541
Reaction score
0
There's a lot of tax and cpf to pay if u calculate down the path.

If the tax and cpf is no issue for U, then the initial mortgage won't be a issue.

If the tax and cpf is an issue for U, then U are back to square 1.
 
J

jtec14

Supremacy Member
Joined
Dec 5, 2001
Messages
8,954
Reaction score
658
stewpig said:
Hmm its not to avoid duty. It’s to get a larger mortgage from the bank.
Click to expand...

What larger mortgage do you mean? For commercial property?

If you are buying residential property under company name, maximum LTV is only 15% if OTP is dated on or after 6 Jul 2018, before that also 20% LTV only.
 
You must log in or register to reply here.
Important Forum Advisory Note
This forum is moderated by volunteer moderators who will react only to members' feedback on posts. Moderators are not employees or representatives of HWZ Forums. Forum members and moderators are responsible for their own posts. Please refer to our Community Guidelines and Standards and Terms and Conditions for more information.
Top