Guide to Buying Resale HDB Flats for Permanent Residents

By Lin Zhiqin / The Edge Property | June 10, 2016 12:00 PM SGT
hdb resale pr - EDGEPROP SINGAPORE
SPRs are eligible to buy HDB flats on the resale market, subject to the HDB Ethnic Integration Policy (EIP) and SPR quota.
The Ethnic Integration Policy (EIP) helps to maintain a good ethnic mix in HDB estates, thereby helping to promote racial integration and harmony. It applies to all HDB flats.
The Singapore Permanent Resident (SPR) quota was implemented to better integrate SPR families into the local community. Malaysians are excluded from this quota because of their close cultural and historical similarities with Singaporeans.
Buyers need to ensure that they are within the EIP proportion for the block/ neighbourhood, and if applicable, the SPR quota as well.
Household’s Citizenship
Proportion and/ or Quota to Meet
Singapore Citizen (SC) household(At least 1 SC is listed as buyer)
EIP
Malaysian SPR household(At least 1 Malaysian SPR listed as a buyer, and no SC is listed as a buyer)
EIP
Non-Malaysian SPR household(All buyers are non-Malaysian SPRs)
EIP and SPR
SPR Quota for Non-Malaysian SPR households:
  • Neighbourhood: 5%
  • Block: 8%
You can use HDB’s e-Service to check if you are eligible to buy an HDB resale flat in a particular block or neighbourhood under the EIP and SPR quota.
The EIP and SPR quota are updated on the 1st of every month, and will apply to all complete resale applications received during that month. The buyers and sellers must meet the eligibility conditions under the EIP and SPR quota at the point of submitting the complete resale application. A resale application is deemed as complete only when HDB receives both the buyers' and sellers' portions of the resale application.
There is no restriction on the sale and purchase of an HDB flat if:
  • The proportion of the buyers' ethnic group/ SPR quota is within the prescribed block/ neighbourhood limits
  • The buyers and sellers are of the same ethnic group and/ or citizenship type
Eligibility schemes
SPRs are eligible to buy HDB flats on the resale market under the following schemes:
  • Public scheme
Criteria
Details
Citizenship
The buyer must:
  • Be an SPR of at least 3 years
  • Include at least 1 listed occupier who is an SC or SPR of at least 3 years
Age
21 years old or above
Family nucleus
To form a family nucleus with 1 of the following groups:
  • Spouse, and children (if any)
  • Parents, and siblings (if any)
  • Children under legal custody, care, and control (for widowed/ divorced persons)
  • Fiance and fiancée scheme
Criteria
Details
Citizenship
The fiancé and fiancée must be either:
  • SCs
  • SPRs of at least 3 years
Age
21 years old or above
Family nucleus
The fiancé/ fiancée must be listed in the application as either:
  • A co-applicant (if 21 years old or above)
  • An occupier
Special conditions
1. Registration of MarriageThe couple must:
  • Register their marriage with the Registry of Civil Marriages or Registry of Muslim Marriages (as applicable)
  • Submit the marriage certificate to us within 3 months from the resale completion date
2. If Applying for CPF Housing GrantThe couple must submit their marriage certificate on or before the resale completion date.3. Consent of Parents
  • If the buyer under this scheme is between 18 and 21 years old, his or her parents must agree to the purchase
  • If the buyer under this scheme is below 18 years old, a Special Marriage Licence must be obtained from the Ministry of Social and Family Development and submitted to us for verification
4. DivorceesThe buyer is required to produce the following for verification:
  • Interim Judgment (previously known as Decree Nisi)
  • Order of Court
  • Final Judgment (previously known as Decree Nisi Absolute)
  • Non-citizen spouse scheme
Criteria
Details
Citizenship
The buyer must be an SC
Age
  • If the buyer is 21 years old or above, the spouse must have a
  • or
  • . The pass must be valid for at least 6 months, and valid at the time the application to buy a resale flat is submitted
  • If the buyer is 35 years old and above, the spouse must have a
  • or
  • . The pass can have a validity period of less than 6 months. However, it must be valid at the time the application to buy a resale flat is submitted
Note: If the Visit Pass or Work Pass expires during the transaction to buy a resale flat, it must be renewed and valid by the time of the resale completion date.
Family nucleus
The non-citizen spouse must be listed in the application as an occupier.
  • Non-citizen family scheme
Criteria
Details
Citizenship
The buyer must be an SC
Age
21 years old or above
Family nucleus
To form a family nucleus with 1 of the following groups:
  • Parents, and siblings (if any)
  • Children under legal custody, care and control (for widowed/ divorced persons)
At least 1 parent/ child must have a valid Long Term Visit Pass or Work Pass. The pass must be valid for at least 6 months and valid at the time the application to buy a resale flat is submitted.Note: If the Visit Pass or Work Pass expires during the transaction to buy a resale flat, it must be renewed and valid by the time of the resale completion date.
SPRs are also eligible to buy Executive Condominiums (EC) from the resale market.
Selecting your dream home
  • Consider the qualities your dream home should possess, such as location, amenities, facilities and design
  • Shortlist the towns and available listings that fit your requirements. Consider engaging a real estate salesperson (property agent) who can assist you in making your selection and handling the paperwork
  • Check that the salesperson is registered with the Council for Estate Agencies (CEA)
  • Visit the shortlisted units to learn more and zoom in on your dream home
  • Take a look at the neighbourhood and surroundings
  • Talk to the neighbours if you have the chance. They can give a more unbiased view compared to the seller and salesperson
  • Take advantage of this Council for Estate Agencies guideline in the Professional Service Manual- “When asked by a buyer or through his salesperson, the seller’s salesperson must find out from the seller and convey to the buyer or the buyer’s salesperson information on the property, such as loan shark harassment, bankruptcy issues, recent deaths from unnatural causes, and defects such as spalling concrete and water leakages.”
Procedure for purchase
  • Check eligibility under the eligibility schemes
  • Plan finances
  • Buyers of HDB flats can finance their purchase using a combination of the following:
  • Savings
  • CPF savings
  • CPF housing grants
  • HDB concessionary housing loan or Bank loan
  • Buyers should apply for a HDB loan eligibility letter (HLE) or bank housing loan Approval-in-Principle (AIP) at this stage to find out the amount they can borrow
  • Select your dream home
  • Check if you fulfill the EIP and SPR quota
  • Receive Option to Purchase (OTP)
    The
    standard HDB OTP
    must be used
  • After agreeing to a price, seller gives buyer the completed and signed OTP in exchange for an Option fee of up to $1,000
  • The OTP is valid for 21 calendar days, during which the flat is reserved for the buyer
  • Request a valuation report
  • Buyers or their salesperson must
  • by the next working day (Monday to Saturday) after seller grants OTP
  • A valid report is required for:
  • HDB housing loan
  • Bank housing loan
  • Using CPF to pay for the flat or monthly loan instalments
  • HDB and CPF board will use the report to calculate:
  • How much CPF savings can be used
  • The amount of housing loan
  • Minimum cash payment required
  • for buyers
    The
    resale checklist
    must be completed before exercising the OTP
  • Exercise OTP
  • Buyer must sign the OTP within 21 calendar days and pay a deposit to the seller of up to $5,000, less the Option fee paid
  • A binding contract for the sale and purchase of the flat is formed upon exercise of the OTP
  • The Option fee will not be refunded if the buyer does not exercise the OTP
  • Both buyer and seller must
  • submit their resale applications
  • within the number of days agreed upon on page 4 of the OTP
  • Both buyer and seller must submit their resale applications within 7 days of each other
  • A valid HLE or letter of offer from a bank is required if buyer is taking a housing loan
  • Book and attend first appointment
  • The second party between buyer and seller to submit their resale application will
  • Both buyer and seller must attend the first appointment
  • Second appointment
  • If the resale application is approved, HDB will schedule a second appointment with the buyer and seller 6 to 8 weeks after the first appointment
  • The sale and purchase of the flat is completed at the second appointment
  • The sale and purchase of the flat is completed at the second appointment
Stamp duty
Stamp duty is payable on the purchase of all properties, within 14 days from the date of exercise of the Option to Purchase (OTP) for resale HDB flats.
  • 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
  • The Additional Buyer’s Stamp Duty (ABSD) depends on the buyer’s residency status and number of residential properties owned
  • ABSD only applies to residential properties
  • Singapore Permanent Residents need to pay 5% ABSD for the purchase of a first residential property and 10% ABSD for the second and subsequent residential property
  • Nationals and Permanent Residents of Iceland, Liechtenstein, Norway or Switzerland; and Nationals of the USA are accorded the same ABSD rates as Singapore citizens
  • Singapore citizens need to pay 7% ABSD for the purchase of a second residential property and 10% ABSD for the third and subsequent residential property
Source: HDB, IRAS, The Edge Property