Guide to Buying Executive Condominium

By
/ The Edge Property
|
June 10, 2016 12:00 PM SGT
Executive Condominiums (EC) are a hybrid housing type that are built and sold by private developers but have eligibility conditions for purchase and sale, similar to HDB flats.
Pre-purchase checks
Time bar
  • Buyers and essential occupiers who currently own the following types of properties will need to fulfill a 5-year Minimum Occupation Period (MOP):
  • starting from date of key collection for flats bought directly from HDB
  • starting from date of resale completion or date of transfer for HDB resale flat
  • starting from date of key collection for DBSS flats bought from developers
  • Buyers and essential occupiers who currently own an Executive Condominium bought from a developer will need to
  • fulfill a 5-year MOP starting from the date of key collection
  • wait a 30-month period from the date of disposal of the existing EC
before they can apply for a new EC or be listed as an essential occupier.
  • Buyers and essential occupiers must not own or have disposed of any HUDC flats or private residential properties within the 30 months before the date of application for a new EC. In other words, if you own a private home, you must sell it and wait 30 months before you can apply for a new EC.
Prior ownership of residential property
  • Persons who have bought or owned two of the following types of properties will not be eligible to apply for a new EC or be listed as an essential occupier in an application
  • Flat bought directly from HDB
  • EC/DBSS flat bought from developer
  • HDB resale flat bought using CPF housing grant
Eligibility
  • Buyer must be a Singapore citizen at least 21 years old applying with at least one other applicant that is at least 21 years old and either a Singapore citizen or Singapore permanent resident
  • All applicant must be Singapore citizens if applying under Joint Singles Scheme
  • Gross household income must not exceed $14,000
  • Buyers must qualify under one of the following schemes:
  • Public Scheme
  • Form family nucleus with any of the following
  • Spouse
  • Parents
  • Children under legal custody, care and control (for widowed or divorced applicants)
  • Fiancé/fiancée scheme
  • Form family nucleus with fiancé/fiancée
  • Must produce Marriage Certificate to developer within 3 months from taking possession of the EC unit
  • Must produce Marriage Certificate to developer before taking possession of the EC unit for buyers taking CPF housing grant
  • Orphans scheme
  • Form family nucleus with any of the following
  • Unmarried siblings
  • At least one of the deceased parents was Singapore citizen or Singapore permanent resident.
  • All unmarried siblings must be listed in the same application. Siblings cannot qualify under separate Orphans schemes.
  • Another single unrelated orphan
  • Joint singles scheme
  • Form family nucleus with another single
  • Both singles must be at least 35 years old
  • Not eligible for CPF housing grant for singles
  • Buyers of dual-key EC units must form a multi-generation family comprising one of the following
  • Married couple with parents/grandparents
  • Fiancé and fiancée couple with parents/grandparents
  • Widowed or divorced with children and parents/grandparents
Application and purchase procedure
  • Obtain an Approval in Principle (AIP) for a bank loan
  • This can be done before or after submitting e-Application
  • An AIP lets you know your eligible loan quantum and the monthly mortgage
  • Having an AIP before booking prevents the forfeiture of your booking fee should there be hiccups in the process of mortgage approval
  • Submit e-Application to developer for eligibility check
  • e-Application will be processed and developer will issue ballot number to eligible buyers
  • Visit show flat and select your unit
  • Buyers can back out of the purchase at any point up to this without suffering any financial penalty
  • Booking of unit
  • Pay 5% booking fee in exchange for Option to Purchase (OTP)
  • The developer will deliver the Sales and Purchase Agreement (S&P) within 2 weeks to your address or your lawyer
  • Option to Purchase is valid for 3 weeks from delivery of S&P
  • Check for and pay Resale Levy
  • Buyers who have received a CPF housing grant or previously bought one of the following properties then sold it, and then buys an EC from a developer where the land sale tender was not launched or closed on or before 9 December 2013 will have to pay resale levy
  • new flat from HDB
  • Design, Build and Sell Scheme flat
  • EC from a developer
  • Buyers who buy an EC from a developer where the land sale was launched or closed on or before 9 December 2013 will not need to pay a resale levy
  • The resale levy payable is dependent on the flat-type of the property previously owned and the date it was sold
Resale levy for flats sold on or after 3 March 2006
Flat-type
Resale levy for households
Resale levy for Singles Grant recipients
2-room
$15,000
$7,500
3-room
$30,000
$15,000
4-room
$40,000
$20,000
5-room
$45,000
$22,500
Executive
$50,000
$25,000
Resale levy for flats sold before 3 March 2006 – based on resale price of the sold flat or 90% of the market valuation, whichever is higher
Flat-type
Resale levy for households
Resale levy for Singles Grant recipients
2-room
10%* or 15%
5%* or 7.5%
3-room
20%
10%
4-room
22.5%
11.25%
5-room and Executive
25%
12.5%
*Only for 2-room flat owners upgrading to larger flat-type
  • Submit OTP to bank
  • Receive Letter of Offer (LO)
  • The LO is a contract stating the terms of the loan offered by the bank to the borrower
  • Sign Letter of Offer (LO)
  • This forms a binding contract between the bank and the borrower
  • Sign and send S&P to the developer, and pay the balance down payment of 20% of purchase price, less booking fee paid
  • The developer may allow buyers to pay the balance down payment within 8 weeks of the Option date
  • If Option is not exercised, 25% of the booking fee will be forfeited with the remaining 75% refunded to buyer
  • Pay Stamp Duty within 2 weeks of signing S&P
  • The Buyer’s Stamp Duty (BSD) is computed based on the purchase price or market value of the property, whichever is higher
  • Buyer needs to pay BSD of 1% on the first $180,000, 2% on the next $180,000 and 3% on the remaining amount of the purchase price
  • Bank makes loan disbursement to developer according to schedule of payment
  • The bank will send a Loan Disbursement Advice and notice to start monthly repayment
  • Start monthly repayment for your home loan
Schedule of payment
  • The purchase price will be paid in installments according to the Standard Payment Scheme
  • Notice of progress payments must be supported by the architect’s Certificate of Stage Completion
Stage
Payment under a standard payment scheme ( % of purchase price )
Upon the grant of Option to Purchase
5% - 10% (booking fee)
Upon signing of the Sale & Purchase Agreement or within 8 weeks from the Option date
20% less booking fee
Completion of foundation work
10%
Completion of reinforced concrete framework of unit
10%
Completion of partition walls of unit
5%
Completion of roofing/ceiling of unit
5%
Completion of door sub-frames/ door frames, window frames, electrical wiring, internal plastering and plumbing of unit
5%
Completion of car park, roads and drains serving the housing project
5%
Temporary Occupation Permit or Certificate of Statutory Completion
25%
On completion date
15%
Expected TOP and Vacant Possession Date
  • The developer may provide an estimated Temporary Occupation Permit (TOP) date. The actual TOP date may vary depending on construction progress
  • The developer is contractually bound to deliver Vacant Possession of the property by the date stated in the OTP and S&P. Failing which, the developer has to pay liquidated damages to the buyer
Source: HDB , URA, IRAS, The Edge Property