Guide to Buying Resale HDB Flats for Permanent Residents

By Lin Zhiqin

/ The Edge Property |

June 10, 2016 12:00 PM SGT

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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 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 If the buyer is 35 years old and above, the spouse must have a Visit Pass or Work Pass . 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 apply for a valuation report 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

Complete resale checklist 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

Submit resale application

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 book a first appointment at HDB

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

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