Rules for Buying An HDB Flat in Singapore

While public housing in other countries is often associated with low-cost, grimy and ghetto-esque living, Singapore’s HDB (Housing and Development Board) has seen to it over the past five decades that the public housing market of its home country is exemplary – and it has succeeded.

From innovative high-rise buildings to quaint public communities, there are a lot of desirable reasons to want an HDB flat – after all, according to CNN, more that 80% of all of Singapore lives in an HDB-provided public housing project. And aside from a handful – just about 10 percent – most of the residents own their homes.

Getting your home from the HDB itself is a lengthy process. Flats are rarely if ever free, and new housing developments mean getting in line early to get your hands on the deeds of a flat before it’s built. However, that doesn’t mean that first-time HDB owners are out of luck when it comes to finding the flat for them – and it certainly doesn’t mean you can’t upgrade from your current flat to something larger and nicer for the whole family.

The key is simply knowing where to look, and what to look for. Once you’re settled in and looking for work, then this site has a great selection of serviced offices and coworking spaces to choose from.

Explaining Your HDB Options

The first and simplest option to keep in mind is the resale market. It’s that simple – owners of flats will be looking to upgrade or move closer to another amenity, city district, friends or family, and they’re thus interested in selling their existing HDB flat to make the move possible.

The resale market is huge here in Singapore, so you won’t have trouble finding an HDB for sale, especially through open market directories such as PropertyGuru Singapore. However, you still have to be careful about your purchase. According to the HDB’s Minimum Occupation Period, there are varying times of minimum occupation that a family or owner has to fulfil before being given the right to resell their flat.

The MOP only counts during periods of occupancy, thus excluding any amount of time wherein an owner rents their flat out to a tenant. Thus, even if you decide to move away and out of HDB housing with the passive income from your first HDB flat, you’ll have to live in it for a set amount of time before being given the option to sell your flat.

For the most part, the basic MOP is five years. This is specifically for flats purchased from the HDB directly, flats purchased from a developer included in the HDB’s Design, Build and Sell Scheme (the DBSS, which was discontinued after negative publicity), flats purchased under SERS (Selective En-bloc Redevelopment Scheme) with the Portable SERS Rehousing Benefits, and resale flats bought from the housing market with a CPF (Central Provident Fund, the government’s primary public housing loan) Housing Grant.

There are exceptions, however. Most notably, the HDB’s SERS program involves the renovation of existing flats, and thus includes a seven-year MOP to include the time spent waiting for the redevelopment to take place. If a flat had already been redeveloped at the time of purchase, the normal five-year restriction applies. Otherwise, 1-room flats bought without a housing grant for the purpose of resale have no MOP.

Finding the Right HDB Flat

 The first thing you have to consider is that HDB flats are specifically designed to work both as a subsidized form of public housing and a private commodity on the open market – with the explicit intention of providing housing, not being a source of income. Thus, buying another flat for economic reasons isn’t always entirely sensible, due to several things including: 1.) the resale levy on subsidized homes (that is, the levied price you have to pay by law for selling a house bought with a CPF grant), and 2.) the cost of repaying your loan, if you took one out to get your new flat.

Thus, your first order of business would be to get your priorities straight. What’s most important to you? Flat amenities? Room size? Price? The location of surrounding public services, such as schools and shopping centres?

Talk to your partner, spouse or family members about getting a new flat. Do you really need more space? Is the loan on your first flat entirely paid? And if you’re looking for another one, can you afford the price the seller has offered you on-top of the possible cash-over-valuation?

In Singapore, when a home is valuated as less than what a buyer bought it for, the buyer has to pay up the difference on top of the agreed-upon price. As an example, if a home costs $200,000, but a buyer paid $220,000, he has to pay the COV price of $20,000, in cash.

As they’re built all over Singapore and within their own self-contained communities, it won’t be hard to find what you need in any one HDB flat.

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