Sale of HDB Flats

From 99-year leases to flats for rent, 1-room Emergency (23 square metres) to Executive Maisonette (148 square metres), residential to shop units… the majority of Singaporeans stay (and work) in HDB flats.

We’re finally talking — I’m finally learning — about public housing. The category includes:

• rental flats
• new flats (Build-To-Order)
• resale flats
• Design, Build and Sell (DBSS)
• Executive Condominium (EC)

Build-To-Order

• 2-room Flexi
• 3-room
• 4-room
• 5-room
• 3Gen

Process: Flats are announced, there are eligibility checks (to buy, for loan), application, ballot result, flat booking (with a HDB Loan Eligibility letter), signing the lease (with HDB Loan Eligibility Letter or Letter of Offer from bank), and collecting the keys.

Different proportions of flat types are set for the elderly, families, singles, for first- and second-timers (or more), and in mature and non-mature estates.

Option fee:

• $2,000 for 4/5-room and Executive
• $1,000 for 3-room
• $500 for 2-room Flexi

and it’s refunded if there’s enough in the CPF Ordinary Account to pay the down payment.

Optional Component Scheme allows owners to opt-in for internal doors, sanitary fittings, floor finishes, and a kitchen partition wall.

Sale of Balance Flats

are:

• flats unsold from earlier Build-To-Order exercises,
• surplus Selective En-bloc Redevelopment Scheme (SERS) replacement flats, and
• repurchased flats.

Launched when there are sufficient flats for sale, and usually oversubscribed.

Process: Announcement, application, booking, collection of keys.

Different proportions are set for different groups, but no additional ballot chances for unsuccessful applications.

Executive Condominiums

Developed and sold by private developers and comparable in design and facilities to private condominiums.

Executive Condominiums turn into Condominiums (private housing) after 10 years, with HDB restrictions lifted.

[Note: when I was studying this, I totally missed the fact that agents are the ones selling EC new launches. huh.]

Design, Build and Sell Scheme

From 7 March 2005 to July 2011, private developers were given maximum flexibility in the flat’s design, finish, size, configuration, price, but the sale was under HDB eligibility rules.

(I lived in a DBSS flat. It was huge, beautiful, and we had a semi-circle balcony [and a service balcony]. My bedroom had a queen-sized bed, a proper table and chair, two full wardrobes, three bookshelves, and there was still space to lay down a yoga mat and chill. When I moved into a normal HDB… my bedroom’s half the size…)

Studio Apartment –> 2-room Flexi Flats

Housing for the elderly, now also open to singles.

Prime Location Housing

In central locations.

10-year Minimum Occupation Period, after which cannot rent out whole flat. (otherwise 5 years and yes.)

Subsidy recovery of 6%.

Resale buyers

• income within $14,000
• at least one Singaporean
  • no singles
• 5-year Minimum Occupation Period.

Eligibility Schemes

HDB | Eligibility Check

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new flats, Singaporeans, mature estates | resale flats, everyone, any estate maturity

Public Scheme

• Singaporean plus one OR
• Permanent Residents (three years since becoming Permanent Resident)
• with
  • spouse and children or
  • parents and siblings or
  • children (without spouse)

Fiancé/Fiancée Scheme

• list other as co-applicant or occupier
• submit marriage certificate
  • new flat: to HDB in three months from taking possession of flat
  • resale flat with CPF Housing Grant: on or before taking possession of flat

Orphans Scheme

• two or more single siblings applying together
  • no sibling under 35 buying a flat separately
• Singaporean or Permanent Resident parent(s)

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new flats, Singaporeans, non-mature estates, 2-room flexi
| resale flats, everyone, any estate maturity

Single Singapore Citizen Scheme

• unmarried/divorcee 35 and older OR
• widow 21 and older OR
• orphan 21 and older
  • no sibling under 35 buying a flat separately
• flat
  • new flat: 2-room Flexi in non-mature estate
  • resale flat: anything anywhere

Joint Singles Scheme

• buying a flat jointly as co-applicants,
• two to four
  • unmarried/divorcee 35 and older OR
  • widow 21 and older OR
  • orphan 21 and older
    • no sibling under 35 buying a flat separately
• flat:
  • new flat: 2-room Flexi in non-mature estate
  • resale flat: all but 3Gen flats

Non-Citizen Spouse Scheme

• Singaporean plus foreigner (Permanent Resident = Public Scheme)
• spouse listed as occupier
• if spouse holds
  • long-term visit or work pass: Singaporean at least 21
  • visit or work pass: Singaporean 35
• flat:
  • new flat: 2-room Flexi in non-mature estate
  • resale flat: all but 3Gen and Prime Location resale flats

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resale flats, everyone, any estate maturity

Non-Citizen Family Scheme

• Singaporean plus foreign family
  • parents and siblings OR
  • single parent with children under legal custody OR
• either parent or child has valid (long-term) visit or work pass of at least six months

Conversion Scheme

• spouse and children OR
• parents and siblings OR
• single parent with children under legal custody

• Buy two adjoining 3-room or smaller flats OR
  • quota/restriction
    • Ethnic Integration Policy and
    • Singapore Permanent Resident
• Own one 3-room or smaller flat and buying another
  • no quota/restriction

• Construct at least 1 x 2.2 metre opening
• Single lease that cannot be sub-divided again, adjoining flat number dropped.

Priority Schemes

• Parenthood Priority Scheme
  • married and have/are expecting children
  • proportion of flats
• Multi-Generation Priority Scheme
  • parents and married child in the same precinct in a joint application of two flats
  • proportion of flats, and three queue number for booking
• Married Child Priority Scheme
  • parents and married children in same estate or within two kilometres
  • couples under the Fiancé/Fiancée Scheme eligible
  • proportion of flats
• Third-Child Priority Scheme
  • proportion of flats
• Assistance Scheme for Second-Timers (Divorced/Widowed Parents)
  • with children below 18
  • proportion of flats
• Tenants’ Priority Scheme
  • from rental flats
  • proportion of flats
• Senior Priority Scheme
  • elderly who want to live near parents/married child
  • proportion of 2-room flexi flat

First-timers — including couples who are first- and second-timers — are given a higher proportion of flats, and for HDB more ballot chances.

Eligibility Conditions

(This is massive, and best read on HDB’s website. Here I’m just going to focus on things I think are important and/or new to me.)

Past properties

• Applicant, spouse, occupiers must not, in the last 30 months from application:
  • own
  • sell
  • have any interest in property
• whether
  • gift
  • inherited
  • private property.

EC owners need to clear a 5-year ownership period, and after selling, wait 30 months before applying for an HDB flat.

Gross monthly household income must not exceed:

• $7,000 (2-3-room)
• $14,000 (2-room short lease, 3-room and bigger, DBSS)
• $16,000 (EC)
• $21,000 (multi-generation flat, extended families)
• for resale properties, no limit unless CPF Housing Grant or HDB loan needed.

Divorcees

• may buy/own a subsidised flat each
• qualify for up to $30,000 Proximity Housing Grant even if not first-timers
• in the three years after divorce, only one party may own
  • from HDB flat OR
  • from developer EC OR
  • resale flat with CPF Housing Grant Scheme.

Bankrupts may buy a 5-room and smaller flat from HDB without consent from the Official Assignee.

After-Purchase Conditions

A 5-year minimum occupation period (10 for the new prime housing locations)

Renting:

• rooms — within minimum occupation period
• whole flat — after minimum occupation period
  • (not allowed for prime housing location)

No buying private residential property during minimum occupation period.

Existing flat must be sold within six months of taking possession of new flat.

Short lease 2-room flats cannot be sold in the open market. Sell back to HDB.

Executive Condominium Eligibility and Conditions

Dual-Key Executive Condominium units
requires a multi-generation family:

• married couple with parents/grandparents
• fiancé and fiancée with parents/grandparents
• single parent with legal custody of children and parents/grandparents

Cancellation fees are 5% of purchase price.

Second-timers who are applying for Executive Condominiums do not pay resale levy. (Second-timer BTO buyers pay resale levy.)

A Mortgage Servicing Ratio of 30% of monthly income applies.

Over the years:

• 0-5: Minimum Occupation Period
  • no buying private residential property
• 6-10:
  • can be sold to Singaporeans or Permanent Residents
  • single over 21 or family
  • no CPF Housing Grant, it’s private housing
• 11 and over:
  • all restrictions lifted
  • foreigners and corporations can buy.

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‘m skipping the ethnic integration policy and singapore permanent resident quota

tis likely that this is the section below is more valuable to paper 1

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HDB Selling Process

Takes about eight weeks.

Register Intent to Sell

• HDB Resale Portal
  • eligibility to sell
  • Ethnic Integration Policy
  • Singapore Permanent Resident quota
  • status and costs of upgrading
  • recent transacted prices of nearby flats
• valid for 12 months
  • it’s an indication, not an approval
    • approval at resale application

Option to Purchase

• download,
• compute sales proceeds,
• 7-day cooling off period before granting OTP to buyer.

Submit resale application

• HDB will notify acceptance by SMS

Endorse resale documents (by spouse who is occupant, not owner?)
Pay resale fees
wait for resale application approval
Attend resale completion appointment

Sales proceeds are released to seller upon completion, and CPF refunds are credited in seven/ten/14 (?) days.

[Note: ok this is completely not enough for the real thing. so I’m going to have to re-create this section in a future post.]

HDB Buying Process

Before buying:

• check
  • Eligibility Scheme (public, single, etc)
  • funds (CPF, loan, cash)
  • HDB Loan Eligibility letter or Letter of Offer from bank
  • Ethnic Integration Policy, Singapore Permanent Resident quota
• Estate Renewal Programme upgrading cost — seller to pay
• can the recess area in the front of the flat be bought?
• are the sellers able and allowed to sell?

Register Intent to Buy

• HDB Resale Portal
  • only one buyer needs to register
  • salespersons cannot do it for buyer, but can guide
  • eligibility to buy
  • housing grants available
• valid for 12 months
  • it’s an indication, not an approval
    • approval at resale application

Valid

• HDB Loan Eligibility letter
  • before seller can grant OTP
• Letter of Offer
  • before buyer can exercise OTP

Exercise Option to Purchase

• 21 days to exercise OTP

Choose financing (cash, CPF, loan)

Request for Value

• of flat from HDB
• becomes the basis for CPF/bank housing loan and CPF usage
• buyer or salesperson can make the request
  • by next working day after Option Date
• seller must allow appointed valuer to enter flat, if required
• $120

Submit resale application

• within 30 days from Option exercised
• buyer and seller have to submit their portion
  • on mutually agreed timeframe
  • within seven days of each other
• salespersons can submit

Endorse resale documents

• in-principal approval then given
• (endorsement seems to be from spouse who is occupant, not owner?)

Pay resale fees ($40/$80)
wait for resale application approval

Attend resale completion appointment:

• in person, if HDB solicitor
• solicitor as representative, if private.

Sellers’ and Buyers’ Duties

Before completing the resale transaction.

Seller:

• rectify/remove unauthorised renovation and confirm it with HDB
• terminate GIRO payments for flat
• pay property tax and Services & Conservancy Charges
  • produce evidence on resale day of completion at Resale Office
• vacate flat for vacant possession
• hand over keys

Buyer:

• inspect flat
  • on or before Completion Date
  • physical condition acceptable
• if HDB loan
  • valid Certificate of Insurance for a
  • Mortgage Fire Insurance policy
  • by HDB’s appointed insurer
  • before Completion appointment (on day itself ok)
• pay balance of purchase price (Cashier’s Order or NETS)
• Minimum Occupation Period
  • fulfilled before
    • selling
    • subletting whole flat
    • buying local or overseas private property
• sell existing property in six months.

If both parties use a private solicitor, and bank loan(s), solicitor will arrange for completion and key handover.

Option to Purchase

A standard form, no other agreement, no unauthorised alterations.

The original is submitted to HDB, so sellers and buyers should make photocopies.

Option period is 21 days (every/any day).
Option expiry time is at 4pm.

• (the Option expires on the 21st day, at 4pm.
  • 1 May –> 22 May, 4pm)

Option fee does not exceed $1,000.

• Expiry of Option means Option Fee forfeit.

Deposit — paid when exercising the Option —
does not exceed $5,000, includes Option Fee.

Rejected Application?

If HDB rejects the application for sale, and it’s neither buyer nor seller’s fault:

• OTP rescinded, sale and purchase cancelled
• seller refunds option fee, option exercise fee, any fee, in full and immediately.

If buyer or seller fault, other party entitled to specific performance (do[n’t] do something), damages ($), or any other remedy.

Cancelled Application

• information has been suppressed or incorrect
• buyer does not have enough CPF, cash, financing
• buyer or seller withdraws application by notice in writing to HDB
• buyer or seller not eligible under HDB policies

Bankruptcy

So long as one of the flat owners is a Singaporean, the HDB flat will not vest in the Official Assignee. The flat owners are not forced to sell.

Unless the mortgage does unpaid. Then the HDB or bank will compulsorily acquire or mortgagee sale.

If a Singaporean bankrupt flat owner wants to sell, they don’t need consent from the Official Assignee.

If a Singapore Permanent Resident flat owner wants to sell, they need consent from Official Assignee before the Option to Purchase can be granted.

Divorce

Selling is allowed with:

• Minimum Occupation Period fulfilled
• Writ for Judicial Separation OR
• Interim Judgement and Certificate of Making Interim Judgement Final OR
• Divorce Certificate (for Muslims).

And any Court Order.

If there are no children:

• the divorced flat owner needs to fulfil the Single Singapore Citizen scheme
  • Singaporean
  • 35+ years old
• flat was a resale
  • purchased without CPF Housing Grant for Family
• flat was new, or purchased with CPF Housing Grant for Family
  • 5-year Minimum Occupation Period is fulfilled

to keep / take over the flat.

If there are children, the party with custody of child(ren) is allowed to retain flat, subject to eligibility conditions. (Exception with non-consummation of marriage, annulment, break-up of engagement. [Not sure what happens here.])

The divorced party may include another person to retain the flat, subject to eligibility.

To sell the flat, the Minimum Occupation Period needs to be met. If the divorce happens during the Period, and none of the owners are eligible to retain the flat, owners may return flat to HDB. Approval and compensation decided by HDB.

Temporary Extension of Stay

For up to three months after legal completion. Monetary compensation by private agreement.

Sellers

• exercised an Option to Purchase or signed a Sale and Purchase Agreement
• not subletting the whole flat
• not the contra party for Enhanced Contra Facility

Buyers:

• pay housing loan
• pay Service & Conservancy Charges
• pay property tax

and have the Minimum Occupation Period set back by the stay.

[Note: I’ve learned that extensions are private agreements, so if someone changes their mind, HDB isn’t going to be a help.]

Not for Security or Collateral

The HDB flat and sales proceeds cannot be used as security or collateral for loans or as payments for debts.

Lease Buyback Scheme

• Sell part of the flat’s lease to HDB
• proceeds go to CPF Retirement Account
• used to join CPF LIFE for monthly income
  • if under 80 years old
  • with at least $60,000 in Retirement Account after top up.

Eligibility:

• age — 65 or older
• at least one Singaporean Citizen owner
• monthly income — $14,000 or less
• Minimum Occupation Period fulfilled
• minimum lease: 20 years to sell to HDB

There is also a $7,500 – $30,000 bonus depending on flat size.

Money goes first to Retirement accounts, topped up to:

• Full Retirement Sum for one owner
• Basic Retirement Sum for owners.

Then cash, a maximum of $100,000 per household.

Then top up Retirement Account to Full Retirement Sum.

Then cash balance.

Admin and legal fees of $100, $300-$500, are deducted from sale proceeds.

Silver Housing Bonus

• Sell HDB or private home with an Annual Value not exceeding $13,000
• buy 3-room or smaller flat, HDB or resale
• proceeds minus loan, purchase price, resale levy
• top up CPF Retirement Account, max $60,000, join CPF LIFE
• apply and receive up to $30,000 cash bonus.

Upgrading Programmes

• Lift Upgrading Programme
• Home Improvement Programme
  • (replaces Main Upgrading Programme)
• Enhancement for Active Seniors
• Neighbourhood Renewal Programme
• Interim Upgrading Plus
  • Interim Upgrading Programme and
  • Lift Upgrading Programme

Flat owners pay their share of cost. Invoice timing around resale completion affects whether seller or buyer pays.

Seller can pay with sales proceeds if sufficient.

❤️🌧️

Image of colourful HDB buildings by PublicDomainPictures from Pixabay.

// note to self: HDB timeline to recreate and link here.