Sunday, July 27, 2014

Singapoerean Benefits (Part II) (Revision 02)

Revision 02 (last paragraph): updated on August 25, 2014

  Private Residential Property Investment in Singapore
1x Singaporean + 1x Singaporean = Singapore Household
1x Singaporean + 1x Singapore PR = Singapore Household
1x Singapore PR + 1x Singapore PR = Singapore PR Household
If you are staying at Singapore HDB flat currently and you want to invest in private residential properties in Singapore. Do take note the following points:

(1) Only Singapore household can keep the HDB flat after they completed the purchase of the private residential properties (be it a resale or new property). Singapore PR household MUST sell their HDB flat 6 months after they complete the purchase of the private residential properties (resale) or 6 months after the TOP of the new private property. 

Singapore PR household MUST SELL HDB after buying a private residential property (be it for self stay or investment).

(2) If you intend to buy a private property for self stay and rent out the HDB flat, then, only Singapore household can rent out the entire HDB flat for good side income. Singapore PR household is NOT allowed to rent out the HDB flat.

Singapore PR household NOT ALLOWED to rent out the HDB flat.

(3) Singaporean pays 7% ABSD (Additional Buyer's Stamp Duty) for second real estate property purchase in Singapore whereby Singapore PR pays 10% ABSD.

Singapore PR pays 3% more ABSD.

Due to the first two points (1) & (2) , many Singapore PR drops the idea of buying the second private residential property in Singapore. Even if the price of the residential properties drop by 50%, Singapore PR will also not take any actions until the above cooling measures [especially points (1) & (2)] are removed, or at least majority of the Singapore PR will choose to wait.

Based on the news on July 29, 2014, there are many completed projects with many unsold units but most of them are "still expensive". There are also many launched, uncompleted projects with many unsold units too.

Take Clementi new condo, Trilinq, as an example, there are total 755 units. So far, they launched 250 units but 131 units unsold. In short, there are 636 units unsold out of total 755 units. That is 84.2% unsold for Trilinq. If they reduce the selling price to the same level as Waterfront @ Faber and also absorb SPR 10% ABSD, I don't mind to purchase one 1-bedroom for rental investment. Let's see if the selling price will drop to S$1,150 psf. With so many units unsold, IOI developer must cut prices to move units.

Updated on August 25, 2014
I had made a phone call today to HDB Branch Customer Service Line: 1800-2255432 to confirm that Singapore household HDB can rent out the whole HDB flat and choose to stay at Private Condo at Singapore.

The only criteria: You have to fulfill the Minimum Occupation Period (MOP) of 5 years.

The details of the subletting guidelines can also be found at the HDB InfoWEB below.

Your tenants profile, ethnics group, Singaporean/ Singapore PR/foreigner will be based on your HDB block quota. It is the same as selling your HDB unit to certain etnics group until the quota is filled. Then, you can ONLY sell or rent to Singaporean only. Take note on this quota too. You can easily check the quota at the HDB website (the links shown below).

(1) For HDB rental:
You can perform "Enquiry on the Non-Citizen (NC) Quota for the Subletting of Flat" at the HDB website.
My search result: I can rent out my whole HDB unit to anyone who is qualified to rent the HDB unit.

(2) For HDB sales:
You can perform "Enquiry on Buyer's Eligibility under the Etnic Integration Policy and SPR Quota" at the HDB website.

My search result: I can sell my HDB unit to anyone who is qualified to purchase a Resale HDB flat.

Of course my search results above are valid as for now. If you intend to sell your HDB flat or rent out your HDB unit say 3 years later, of course, you have to perform the latest enquiry again when you begin your procedure.