Singapore s Largest Real Estate Agency. Consumer Guide. Selling a HDB Flat in the Resale Market

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1 Singapore s Largest Real Estate Agency Selling a HDB Flat in the Resale Market

2 Selling a HDB Flat in the Resale Market Contents Resale Checklist 1 Eligibility To Sell 1-2 Next Housing Plan 3 Financial Plan 3-4 HDB Prescribed Option To Purchase 4-5 Resale Levy (If Applicable) 5 Upgrading Cost (If Applicable) 6 Temporary Extension of Stay By The Sellers Declaration Of Resale Information 6-7 8

3 Resale Checklist If you intend to sell your flat, you are required to go through the Resale Checklist even before you start to market your flat for sale. The Resale Checklist highlights the key policies and procedures that you should take note of before you commit to selling your flat (i.e. before you grant the Option to Purchase). If you have engaged the services of a salesperson, your salesperson is required to go through and complete the checklist with all sellers. The Resale Checklist must be completed and submitted online via HDB e-service: Resale Checklist for Sellers/Buyers to the HDB at least SEVEN (7) days before you grant the Option to Purchase (OTP) to the flat buyer. Eligibility to Sell Minimum Occupation Period (MOP) Sellers must have met the Minimum Occupation Period (MOP) before granting the OTP to Buyers. The MOP is calculated from the date you collect the keys to the flat. It excludes any period that the flat is not occupied by the flat owners, such as when the whole flat is rented out or when there is any infringement of the flat lease. 1

4 Purchase Mode MOP Flat bought from the HDB 5 years DBSS flat bought from a developer 5 years Flat bought under the Selective En bloc Redevelopment Scheme (SERS) 5 years; or 7 years from the date of selection of the replacement flat, whichever is earlier. Flat bought under the SERS with portable SERS rehousing benefits 5 years Resale Flat bought from the open market with the CPF Housing Grant 5 years Resale Flat bought from the open market without the CPF Housing Grant: 1-room flat 2-room or bigger flat with date of flat application: No MOP on or after 30 Aug 10 5 years bet. 5 Mar - 29 Aug 10 3 years before 5 Mar 10 2½ years if you took an HDB loan; or 1 year if you did not take an HDB loan Source: HDB To ascertain if you have met the MOP, Sellers may submit an e-request online via HDB e-service: Computation of Occupation Period for Purpose of Resale Ethnic Integration Policy (EIP) & Singapore Permanent Resident (SPR) Quota Sellers/Buyers must meet the EIP and SPR Quota requirement on the date of resale application. The EIP & SPR Limits are updated on a monthly basis. You can check the limits via HDB e-service: Enquiry on Buyers Eligibility under the EIP and SPR Quota. 2

5 Next Housing Plan Before selling the flat, Sellers must consider their next housing plans and any interim housing (if necessary). If Sellers are planning to buy another HDB flat, they have to check the following: Their Eligibility to Buy Their Eligibility for Housing Loan from HDB / Banks Whether the remaining lease of the flat they intend to buy (especially those that have less than 60 years of remaining lease) would affect their use of CPF and the taking up of a housing loan Sellers are not eligible for any HDB rental flat for thirty (30) months after the sale of their existing flat. After 30 months, they must comply with all prevailing eligibility conditions before applying to HDB for a rental flat. Financial Plan Outstanding Housing Loan Sellers are to check with the HDB / Bank on the outstanding housing loan that has to be discharged. If they have obtained an HDB loan, they can check the outstanding loan via the My HDBPage (select My Flat ; then Financial Info under Purchased Flat ). CPF (Plus Accrued Interest) to be Refunded Sellers are to check with the CPF Board on the amount of CPF (plus accrued interest) to be refunded by logging on to My CPF Online Services. If the sales proceeds are insufficient, the cash deposit received from the Buyers will have to be used to reduce any shortfall in the required amount of CPF refund. 3

6 HDB s Sales Proceeds Calculator Sellers should use the HDB Sales Proceeds Calculator to work out the estimated sales proceeds for the sale of the flat. For an estimation of the resale price, Sellers may refer to the Resale Flat Prices provided on HDB s website. HDB updates these on a daily basis. Source: HDB HDB Prescribed Option To Purchase The contract to be used in HDB resale transactions is the HDB Prescribed Option to Purchase (OTP). Before granting the OTP, Sellers should read and understand the Important Notes and provisions enclosed with the OTP. 4

7 Any deletion, insertion or alteration to any provision in the prescribed OTP will render it null and void. Sellers can only grant the OTP at least seven (7) days after the Resale Checklist has been completed and submitted online to HDB. Buyers are given twenty-one (21) days to exercise the OTP. Buyers who are taking a housing loan or using CPF for the flat purchase will require a valuation report. Upon granting the OTP, Sellers have to allow the appointed valuer to inspect the flat within four (4) working days after the Buyers have submitted a valuation request. Resale Levy (If Applicable) Sellers of subsidised flats will have to pay a resale levy based on the sale of their current flat before they buy or take over the ownership of another subsidised flat. Those who have previously bought a flat from the HDB or taken a CPF Housing Grant will have to pay a resale levy when they next buy a flat from the HDB. First Subsidised Flat Type Amount of Resale Levy Payable under the Revised Policy (From 3 Mar 2006*) 2-room $15,000 3-room $30,000 4-room $40,000 5-room $45,000 Executive Flat $50,000 * only applicable for those who submit their resale application and book a 2nd subsidised flat on/after 3 March Source: HDB 5

8 Upgrading Cost (If Applicable) Sellers have to settle any outstanding upgrading cost/levy before the completion of resale. The party liable to pay for the upgrading cost/levy is the flat owner on the date the bill is issued. For a flat undergoing a resale transaction, the bill will be issued to the Buyers (the new owners) if the bill is rendered after the resale completion. You can check on the upgrading programme details and billing via HDB e-service: Enquire Status of HDB s Upgrading/Estate Renewal Programmes. Temporary Extension of Stay Some flat sellers may not be able to move out immediately, upon the legal completion of the sale of their flat for various reasons. To ease their transition to their next home, flat sellers may arrange with their flat buyers, to extend their stay temporarily in the flat, for a period of up to 3 months after the legal completion. Conditions Affecting Sellers Must have committed to buy a completed housing unit (can be another HDB flat or private residential property) in Singapore at the time of the resale application, i.e. they must have exercised an Option To Purchase or signed a Sale and Purchase Agreement. Must not be subletting the whole flat at the time of resale application. Must be the contra party if the transactions are under the Enhanced Contra Facility. 6

9 Conditions Affecting Buyers The start point for the computation of MOP will be set back by the period of the Temporary Extension of Stay. As legal owners of the flat, flat buyers must pay the following during the period of extension (the list may not be exhaustive): Monthly instalments for housing loan Service & Conservancy Charges (without rebates) Administrative Fee & Submission Procedure The temporary extension of stay is subject to the agreement of the flat buyers and the request is to be submitted to HDB at the time of the resale application. An administrative fee of $20 (inclusive of GST) is payable by the flat buyers during the resale first appointment. Buyers and sellers may formalise their agreement on the terms of the extension of stay (the period of stay must not be more than 3 months after legal completion) and any monetary compensation by the flat sellers to the buyers. This will be a private arrangement and they do not have to show their agreement to the HDB. Expiry and Termination of Extension of Stay The extension of stay will automatically be terminated at the end of three months. Flat buyers must inform HDB via My HDBPage or contact the HDB Branch Office if they terminate the extension earlier. The computation of the MOP for the new owners will commence after the extension of stay is terminated. 7

10 Declaration of Resale Information Sellers are legally required to give true information (e.g. resale price, income) to HDB. Sellers must not enter into any supplementary agreement or cashback arrangement, etc. In addition to other remedies, the Housing & Development Act (Chapter 129) provides that any person who makes a false statement is liable to a fine not exceeding $5,000/- or to imprisonment for a term not exceeding 6 months or both. NOTES 8

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