Can HDB owners buy another private property? Yes you can!

Thursday, July 02, 2015 Coftea Coftea , HDB , Singapore 69 Comments

Hi,

Totally.. The 7% ABSD is no joke. And 50% downpayment is required.
Guess I'll stick to stock investing for now :)

Hi,

This is something I hadn't thought about, but luckily I managed to find the answer :) If the PR is listed as one of the essential occupier of the HDB, then dual ownership is not allowed. An excerpt from HDB website:

"Singapore Permanent Resident flat owners and/or essential family members who have met the minimum occupation period for their flat are required to notify HDB of their purchase of the local private residential property before they exercise the Option-To-Purchase (OTP) for the property. They would also be required to undertake to sell their HDB flat within 6 months of acquisition of a completed or uncompleted local private residential property."

Hi,

I am sure that there can be more than 1 co-owners in purchasing of a private property. But is there a maximum number? This I can't be sure as I can't find any policy on it. As opposed to HDB, there isn't that many restrictions imposed on the eligibility criteria to own a private property.

So the answer to your second questions is a definite yes. I can even buy a private property with an unrelated person if I want to, who is there to judge :) However, if you are buying as joint owners please take note that:
- The percentage of downpayment and the amount of loan (LTV) you can draw will depends on how many existing housing loans the joint owners have
- Higher stamp duties if one of the joint owner is not Singaporean or Singapore PR

Hope I have answered your question and the home buyers section on URA website has more useful information to know. Best of luck with your investment!

Hi there,

Thanks for pointing this out! We should always take note of our TSDR and LTV when calculating the max loan amount we can take.

In my example, he is capped to his max TSDR which is $1,440 monthly. The max amount of loan that can be taken is therefore $1440x12x35 = $604,800, given that the maximum loan tenure for residential property is 35 years.

On the other hand, if say Coftea is earning a very high income with TSDR of $50,000 monthly, the max amount he can take will instead be capped by max LTV which is $750,000 even though he has the ability to service a huge loan. It is probably time to consider a larger, nicer and more exquisite house ;P

Hi,

Thanks for dropping by. For Singapore Citizens, Yes! We can fully sublet our HDB and stay in the private property as long as our HDB's MOP is met. Tough luck for Singapore PR though. More info can be found via this link.

Noticed HDB has actually revamped their infoweb and there is a new portal to check our HDB related info, including our eligibility to sublet our unit. Check it out here.

Hi,

Thanks for the reply. Following the link provided another reader below: http://www.hdb.gov.sg/cs/infoweb/residential/living-in-an-hdb-flat/acquiring-private-property , under MOP after the table, point no. 4, states "You must continue to stay in your flat, even after acquiring private residential properties. Exceptions are only made if you have obtained prior approval from us to sublet your whole flat."
It seems that you cannot simply just just rent out after meeting MOP, the link you provided seems to be valid only if you have attained approval from HDB. Wonder what are the criteria for HDB exception approval?

Hi there,

It's great to have comments like your's. I learn something new everytime :)

With regards to your question, I did a login to the HDB portal, checked my eligibility to sublet the whole flat and found that the criteria are stated in there. Click here for a screenshot of the page. I'm only about 3 years with my flat and obviously not eligible :)

As for the approval, I understand that it is a must to apply for one with HDB if we want to sublet our entire unit. It is one of the regulations that homeowners need to comply with. I'm not sure if there are other human checks HDB does during approvals, but based on the official published criteria, I don't see why we can't sublet our flat.

So you're right, we cannot simply just rent out. Even if we are just renting out a bedroom, we actually need to inform HDB too. You know, just to make sure IRAS knows we need to pay taxes on the rental income and in our scenario of subletting the whole flat, a higher property tax...

Hi,

Thanks for dropping by. I believe the points mentioned apply only to Singapore PR. The condition is "If all the owners of your flat are Singapore Permanent Residents and you are a flat owner or essential family member who has met the MOP for your flat".

Hmm.. I dislike how this piece of information is communicated in HDB's revamped website. What happens if just one of the owner is PR? What about Singapore Citizens? Leaves more questions to be answered. Moreover, my previous saved links from the old HDB infoweb are all gone :(

Hi there,
I don't think there are any issues in your situation. URA has guidelines to home owners leasing their residential property here, and there seems to be no issues in it.

But if your wife is planning to rent short term since her relatives only come occasionally, please note the official guideline that states "Private residential properties or their rooms within the premises should not be rented out on a short-term basis for less than 6 months on a daily/weekly/monthly basis." Moreover, renting out short term from a homeowner's perspective should incur more logistical problems. That being said, the language is 'should'. So, if someone is willing, why not huh :)

Hi LYR,
I see two things that needs to be established on your situation:

1. Buying property overseas while holding your HDB
If you have fulfilled your MOP, you can buy local or overseas property. See link here.

2. Sublet the entire HDB
Do note that there are eligibility conditions to meet and approval to get from HDB before you can sublet your HDB. See HDB's published information here, a screenshot I have captured here and lastly, you can login HDB's portal to check your eligibility here.

Migrating is a big decision and I guess you must have planned it for some time. Congrats on achieving it and all the best in your next venture =)

Hi Kent,
I really don't know, because I don't know how much money you have! ;P

I do know that there is no limit to the number of private properties one can own. And I know that the amount of loan one can borrow decreases and downpayment one has to pay increases with more outstanding housing loans. For example, loan is 20% and downpayment 80% if one has 2 or more housing loans with tenure > 30 years. Very informative link from Moneysense here.

Therefore, as with many other things, money is the limitation.

Hi there,
Afraid you can't do that. In most cases, HDB must be jointly owned by 2 or more people. This is because buyers must fall under one eligibility scheme to qualify for a HDB. E.g. Under Public Scheme, 1 SC must include at least 1 listed occupant who is an SC or SPR and form a family nucleus.

If you have children who are above 21 years old, there is chance of transferring ownership to them if eligibility conditions for ownership transfer are fulfilled. Whether it will be a good idea is another story...

I would remain as occupier for the HDB flat to fufill the 2 people requirement. Also I would not own any property when purchasing the private property, is that right?

Hi,
I think what you would want is to 'decouple' your HDB, transferring your share of the HDB fully to your wife. If it is successful, you can avoid the ABSD when you buy a private property. I don't have much knowledge in this subject, but below are some useful links for your reference. Hope it helps.

- Explanation of what is decoupling here and here.
- A fellow blogger experience on it here.

Hi there,

For new flat purchase, it is unfortunate that the guideline states you cannot own a private property, either local or overseas within 30 months before the date of the new flat application, and up to the date of taking possession of the new flat. Which means you need to dispose your private property even before you apply for BTO! There is a chance to appeal for exemptions though, check out the last second point in this link.

Things are different for buying resale flat where owners have 6 months to dispose their private property. You might want to take this into consideration.

Hi there,

I am not a good person to answer this as it may involve some legal implications. But I have got some information from HDB's portal. Since the flat has definitely met its MOP, you can inherit the flat (note that you also need at least 1 essential occupier to fulfill HDB's eligibility scheme) and keep your private property. However, you and the listed occupier(s) need to stay in the HDB after the transfer.

Do take a look at the 2nd table in this link for more details. There is also an online e-service link to enquire on your eligibility to take over a HDB.

Hi there,

Yes you can. My understanding is that for married couple, you can do it via a transfer of ownership by way of gift. Although you can effectively avoid the ABSD, this process is very 'involved'. You will have to repay your existing bank loan or return CPF money for HDB loan, apply for new loan if your wife needs it and pay for admin, stamp, legal (for a lawyer) and other fees applicable.

Here is a good guide from HDB. Additionally, here is a fellow blogger's experience and here is some info I found which is really useful. Hope they help.

Hi koh,

Good news. Quoting from HDB website in this link, 'You can invest in private property after the 5-year MOP. However, you have to continue living in the short-lease 2-room Flexi flat after purchasing the private property'.

This info is also something new to me. Thanks for bringing it up :)

Hi there,
Yup, you will be subjected to ABSD. It doesn't depend on MOP, but on the number of properties a buyer owns. Quoted from IRAS's website: As long as a buyer owns any share of interest in a property, that property will be included in the count of properties owned by him.

Hi Tony,

It is really our pleasure to share info here. You're welcome :)

I don't know the source of your readings (hopefully not from some property related businesses), but the real catch is in your 2nd point, it assumes the rental market and rental yield is healthy and strong. That is some big assumption! With current macro conditions, strong is definitely not something I would use. Moreover, your HDB is your home, a roof over your head. Using it for leverage and risk just doesn't sound proper to me.

If I were to be in your shoes with sufficient resources to purchase another property, I would just look to purchase 1 condo but keep my HDB. I can keep staying in my HDB and rent out the condo as investment income, or do it the opposite way where I sublet my HDB and stay in the condo. There are a couple of reasons why:
- To buy 2 units, it means I would incur stamp duties, legal fees, agent comissions and many other payments involved in a purchase, 2 times.
- If I decide to pay off my current HDB loan, I would only need 20% downpayment (instead of 50%) on the condo.
- If things don't work out, downgrading from private property back to HDB is difficult.
- I love my HDB, why should I start another loan, pay more property tax and maintenance fees just to stay in a condo :) Condo as pure investment vehicle is my preference. I still get to enjoy the facilities.

Of course, these are my personal opinions. There are so many more factors to consider. Nonetheless, you should check out data on URA website here so as to see the past trend of property prices and rental income. They will be helpful for doing projections. All the best no matter what your decision is!

Hi there,
Pleasure is our's when what we're sharing is useful :)
MOP is actually applicable to both resale and new HDB purchase. It is 5 years for most cases. You can find out more info from HDB website here. Hope it helps!

Hi there,
Sharing is caring :)
Afraid you can't hold on to your private property if you bought a HDB. For resale HDB, you need to dispose your private property within 6 months after your purchase. For new HDB, you will need to be free of your private property for 30 months before applying for one.

They are much malaysian (both PRs) who owned HDB in Singapore. they sublet whole unit and trav in and out daily. if HDB found out. just transfer to next kin.

Hi there,
My understanding is that to sublet a whole unit, the owner(s) must be SC. So in your case, I don't think it is allowed in HDB's policy. Nonetheless, HDB has a useful eligibility checker here, do try and let us know :)

Hi there,
Sounds to me what you want to do is to de-couple your HDB flat by transferring all your hubby's share to you. So to answer your ultimate question, technically yes, your hubby can avoid ABSD and purchase a private property as a first time buyer, provided that your transfer is successful. With regards to your portion of HDB, it doesn't remain status quo though. You will have full shares and need to repay the mortgage loan by yourself.

Be aware that going this route can be very 'involved', at least from what I can find out online. HDB has a good guide on the steps here and I found this blog to contain some useful readings. All the best on your decision forward!

Hi there,
As you fully own your current HDB, you will be subjected to 7% ABSD when you buy another property. As for your wife who is not a co-owner of the HDB, she will be counted as a first time buyer. However, since she is SPR, she is subjected to an ABSD of 5% on first property purchase. More info on ABSD here.

If you're considering selling your HDB, you might be eligible for ABSD refund though. Just a thought :) I'm sure you can find capable property agents who can advise you further when you go property shopping!

Hi there,
Buy a Thailand property, yes. Rent out current HDB, yes. But buy another HDB with your children? Nahh.. You need to dispose current HDB within 6 months for resale flats and be free of any property for 30 months for new flats. I'm sure HDB and our property market will go bonkers if this can happen :)

Hi Curious,

Sorry, I've been away on 'other things' :)

Since you are a SC, I don't see any reason why you cannot get a 2nd private property. If you look under this link, one of the requirement to sell your existing HDB is that 'all the owners of your flat are Singapore Permanent Residents'.

Hope it helps!

Hi Unknown,

Sorry, been at 'other things' all this while.

What I understand is that you can only transfer CPF money to your loved ones' SA or RA account. In this way, CPF ensures that the top-up amount is not used for any other purposes other than retirement needs. It is a way to safeguard our retirement savings.

I don't quite understand the second part of your question. Do you mean if you can still purchase a condo after being a 1% co-owner of your wife's condo? If you don't own a HDB, then it should be good.

I hope your wife is at a better financial situation now. I think another way is to approach the bank and refinance the loan by adding yourself into the picture too. The two of you may get better leverage.

Hope it helps!

Hi Developer Launch,

Thank you! Just wanna clear up some myths and untrue comments I frequently hear :)

Hi ipin temasek hypermart,

Sorry for this late response, I got occupied by life :|

My thoughts to your questions:-
1st qn: I suppose you're still staying in the HDB? Since you're the joint owner, there shouldn't be a problem if your dad decides to stay with your stepmom. If your dad wants to hand over the HDB to you, he could do that by initiating a flat transfer. Since it is also fully paid, you may just need to refund the CPF money used by your dad. Check out a well written guide from HDB here.

2nd: I would suggest you take over :)

Hi there,

Sorry, been caught up with life :)

Thanks for the compliments and glad you found it useful. The important question here is whether you can purchase a HDB yeah? Unfortunately, as you're already married, I don't think you fit into one of the eligibility bracket to purchase HDB. To single-handedly purchase HDB, well.. you have to be single in the first place :)

Hi there,

If the land you're buying is not zoned for residential purposes, then yes you can! I'm surprised at this answer found at this link.

Hope it helps!

Hi there,

This thread is active, but I wasn't. I'm here to correct that :)

My 2 cents to your questions:
1) You completed your MOP, so there is no guidelines to sell your HDB within 6 months. So I think you have more leeway to find a good buyer for your HDB as there isn't a time restriction.
2) Yes, and also note that you will also have to refund any CPF money you used, including the interest the money will earn with CPF over the years.
3) The LTV also depends on the number of existing loans you have and the tenor of the new loan you are taking. So in your case, you would want to sell your HDB first, declare yourself as not servicing any existing loan to get a maximum LTV of 80%. This is provided your new loan tenor is <30 years. You may want to read more on MAS's Moneysense here.

Hope they helped!