There’s a limited time frame within which your HDB Flat will be at peak resale value. If you are looking to profit from your HDB flat, it is at this precise period of time that you will need to make that sale.
This big money move, however, requires both financial and logistical planning to achieve.
One of the big barriers to getting that flat sold is the set of eligibility criteria that the HDB has put in place to keep HDB units from being overbought and oversold.
Let’s take a look at these criteria, and help you understand what you need to do if you want to successfully sell your flat.
First Things First: The Minimum Occupation Period (MOP)
MOP is the first challenges you will meet.
This minimum occupancy period was put in place to ensure that HDB property owners will not be able to buy and sell their homes within a short period of time, thereby contributing to rapid inflation of HDB prices in the resale market.
For most new flats, MOP means a 5-year wait. There are caveats to this:
- MOP is calculated from the time you collect the keys to your flat.
- MOP does not include times when you rent the whole flat out.
- MOP also excludes times when you have infringed on the lease of the flat.
Now that we’re clear on some of the key rules, here are the MOP durations for different categories of buyers/flats:
- Flats purchased from HDB, DBSS flats, Flats bought under SERS with portable SERS rehousing benefits: 5 years
- Flats bought under the SERS Scheme:
- 7 years from the date of selection of replacement flat OR 5 years from the date of occupation (Whichever is earlier)
- Resale flat bought from the open market with CPF Housing Grant: 5 years
- 1-Room Resale Flat bought from the open market without CPF Housing Grant: No MOP
- 2-Room or larger resale flat bought from the open market without CPF Housing Grant:
- 5 years (If application date is on or after 30 August 2010)
- 3 years (If application date is between 5 March to 29 August 2010)
- 2.5 years (If application date is before 5 March 2010)
- Flats bought under Fresh Start Housing Scheme: 20 years
A Little Issues Called EIP and SPR Quotas
The country’s Ethnic Integration Policy (EIP) can put a potential stop to your sale of HDB. This mandated racial quota in every housing block is built in to ensure some form of balanced ethnic
mix. Social engineering and potential discriminatory issues aside, this means that if the sale of your house changes the ethnic balance of the block, you might not be able to sell your flat.
The other issue to consider is the Singapore Permanent Resident (SPR) quota. This quota is supposed to ensure that the SPR families can better integrate into Singapore. Malaysians, however, are not counted under this quota due to their close cultural and historical similarities with Singaporeans.
Under this policy, only 5% of any neighbourhood can be made up of Non-Malaysian SPR families, and up to 8% of any block of flats can be made up of Non-Malaysian SPR families.
Both buyers and sellers can find out the Ethnic Proportions and SPR quotas of their block of flats and neighbourhoods here.
Other things to think about: Bankruptcy
The next 2 topics are not things that people like to talk about, they can be and often are a large part of people’s house selling motivations.
When looking at selling due to bankruptcy, it is important to note that as long as any of the flat owners are Singaporean Citizens, the consent of the Official Assignee is not required in the event
that the flat owners wish to sell the flat.
However, if none of the flat owners is Singaporean Citizens, they would have to get the consent of the Official Assignee or a private trustee before they can sell the flat. This consent must be given prior to granting any Option to Purchase to any prospective buyer.
Other things to think about: Divorce
In the event of a divorce, after meeting the Minimum Occupation Period requirement, you can sell the flat if all eligibility conditions like EIP and SPR quotas.
However, you need to produce the following documents:
- Writ for Judicial Separation (previously known as Deed of Separation); or
- Interim Judgment (previously known as Decree Nisi) and Certificate of Making Interim Judgment Final (previously known as Decree Nisi Absolute); or
- Divorce Certificate (for Muslims); and
- Order of Court (if any)
If the Minimum Occupation Period is still not fulfilled, the flat will need to be returned to the HDB together with a compensation price.
Another caveat to remember that if the flat was bought as part of a joint application, or under the fiancé-fiancee scheme, it is considered as a matrimonial asset. That means that it will be divided
between the two parties by the courts if the flat is sold.
If both parties do not wish to sell the house, and they do not have children, one of the parties can keep the flat after the divorce.
The person will need to apply under the Single Singapore Citizen Scheme and must fulfil the filling criteria:
- The party is a Singaporean Citizen
- The party is at least 35 years old
- The flat is a resale flat purchased from the open market without a CPF Housing Grant for Family
It is also important to note that if the house cannot be retained by either party, it must either be sold or returned to HDB.