If the idea of selling HDB to buy condo as a way to generate wealth for you and your family has crossed your mind, chances are that you also have a ton of questions and doubts that need answered, so that you now the best way forward on your path to wealth accumulation.
Well, you’ve come to the right place. To help clear your doubts and ease your confusion, so that you can make better informed decisions, here are some most commonly asked questions about selling HDB to buy condo in Singapore, and the respective answers. So check them out.
Eligibility to buy condo in Singapore
To determine your eligibility to buy condo in Singapore, there are a few things to consider. If you own a HDB flat or are the first owner of an Executive Condominium (EC), you are required to fulfill the stipulated Minimum Occupation Period (MOP) before you become eligible for the purchase of condominiums.
MOP starts from the date of key collection and typically lasts for five years. During the period, owners are not allowed to rent out the entire unit, sell it in the open market or purchase private properties. If you’ve rented out the unit due to approved reasons, such as overseas deployment of work, this duration is factored out of the MOP.
Buy condo in Singapore downpayment
For your first residential purchase, a mere 5% of minimum cash down payment is required, while another 20% can be paid by funds from your CPF Ordinary Account (OA). For a second residential property, the minimum cash down payment increases to 25%, whereas the cash or CPF portion is 30%. For third and subsequent purchases, the minimum cash down payment remains at 25%, with a 40% allocation for cash or CPF.
How to buy a condo
Buying a condo largely hinges on two aspects: eligibility and financing. Factors like age, citizenship, marital status and existing property ownership dictate whether you are eligible to buy a condo. Meanwhile, your CPF monies, monthly salary, debts and commitments constitute affordability.
If you wish to seek professional help on how to buy a condo, get in touch with us for a non-obligatory consultation.
Selling HDB to buy condo
Firstly, in order to sell your HDB, ensure that the flat has fulfilled its 5-year MOP. Next, secure a loan before paying a non-refundable deposit – 1% of the property price – for the Option-to-Purchase (OTP) to the Housing & Development Board (HDB).
Exercise the OTP within its validity period to buy a condo, which is subjected to Additional Buyer’s Stamp Duty (ABSD) if you still own a HDB. The ABSD will be reimbursed if the flat is sold within six months.
Salary to buy condo
The salary to buy condo is generally recommended to be at least S$60,000 per annum (or S$5,000 a month) so that your cashflow can sustain the purchase.
However, it also depends on your budget, the amount of CPF monies available, previous residential purchases and existing loans (or lack thereof). Condo prices also vary in different parts of Singapore.
How much do I need to buy a condo?
To determine or have an accurate estimate of how much do you need to buy a condo in Singapore, you have to take into account your loan eligibility and CPF monies available.
For private properties, you will be applying for a bank loan, which caps the mortgage servicing ratio (MSR) and total debt servicing ratio (TDSR) at 30% and 60% respectively. The former refers to the proportion of your gross monthly income used to service your mortgage, while the latter indicates the proportion used on all monthly debt repayments. Additionally, there is a 75% cap on the loan-to-value (LTV) limit, which determines the maximum amount for your housing loan.
Can foreigner buy executive condo in Singapore?
Yes, a foreigner can buy executive condo in Singapore, but only after certain conditions have been met.
After the 5-year MOP, executive condo can be put on sale in the open market. Only Singaporeans and PRs are qualified to purchase from the 6th to 10th year, after which the property becomes fully privatized and available to foreigners.
Can foreigner buy condo in Singapore?
Yes, a foreigner can buy condo in Singapore.
Unlike the purchase of landed residential properties, which requires approvals from the Singapore Land Authority under the Residential Property Act, purchase of a condo by foreigners does not need approvals.
Can a Singapore PR buy condo in Singapore?
Yes, a Singapore PR can buy a condo in Singapore. PRs are eligible to buy HDB flats, Executive Condominiums and private properties. However, unmarried purchasers will be subject to Additional Buyer’s Stamp Duty (ABSD) on top of the standard Buyer’s Stamp Duty (BSD).
For more information, refer to the Inland Revenue Authority of Singapore (IRAS) page on ABSD.
Sell HDB to buy 2 condo?
Sell HDB to buy 2 condo is possible and allowed. However, whether it is practical or feasible depends on your financial situation in terms of available CPF money and investable liquid cash, as well as the flat’s valuation and eventual selling price.
Using CPF to buy condo
Using CPF to buy condo is a viable option, if you meet the conditions for it. Under the CPF Housing Scheme, CPF members who are eligible to buy a condo can use their CPF savings to finance the purchase. The money from your CPF Ordinary Account (OA) covers direct payment of the purchase price, monthly repayment of housing loans, as well as stamp duty, legal fees and other related costs.
Refer to the full terms and conditions here.
Can I buy HDB after selling condo?
Yes, you can definitely buy HDB after selling Condo, however with certain conditions to be fulfilled. If you’re planning to buy a HDB resale, you can do so immediately. But if HDB BTO is what you have in mind, you would first need to fulfill a 30-month period following the sale of your condo.
In addition, your eligibility also depends on your marital status and citizenship. Read here for more details.
Can I buy condo if I own HDB?
Yes, you can buy condo if you own HDB as well, as long as your HDB is past its 5-year MOP. However, you need to consider whether the funds in your CPF Ordinary Account (OA) can be fully utilized for the purpose. Your second residential purchase is also subjected to a 12% Additional Buyer’s Stamp Duty (ABSD).
Do note that PRs are not allowed to own both types of property simultaneously. PR-owned flats need to be sold within six months of acquiring a private property.
Can a single buy executive condo?
A single can buy executive condo with certain conditions and limitations. Single Singaporeans who are 35 years old and above can apply under the Joint Singles Scheme with three other co-applicants to purchase an EC. The application is not eligible for the CPF Housing Grant.
Alternatively, both Singaporeans and PRs can purchase a resale EC that has been listed in the open market after fulfilling its MOP. As a result, these properties are at least 5 years of age.