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Singapore Loans Market – Understanding the Government Rules

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Singapore Public Housing, has been built and managed by Government’s Housing Development Board (HDB) since independent. It has always been clocking high transaction volumes in its open or resale market every month. If you are HDB dweller or owner planning to sell your flat in the open market, the first step is to understand and comply with the HDB ruling on eligibility to sell. That is, you must ensure that you have met the eligibility criteria to do so, i.e. to have met the Minimum Occupation Period (MOP).

MOP is known as the minimum period of time the HDB owner physically occupied in the flat. It excludes the period of non-occupation of the current flat or replacement flat (SERS), such as approved subletting of whole flat or any infringement of the flat lease. For instance, if you have rented out our entire flat for 1 year, the 1 year period will not be included in the computation of MOP. The MOP very much depends on the purchase mode, and the flat type you last purchased.

There is no MOP for owners owning 1-room flat or HUDC flat type. In other words, if you’ve purchased a 1-room HDB or HUDC flat type, you can sell anytime to another eligible buyer in the HDB or HUDC resale market.

If you’ve bought flats directly from HDB or bought a HDB Resale Flat under Central Provision Fund (CPF) Housing Grant Scheme, the MOP shall be 5 years from effective date of purchase. The rationale behind is that such purchase mode is substantially subsidized by the Government, hence required longer period of dwelling purpose to meet the basic housing needs of eligible Singapore Loans or permanent resident buyers.

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If your flat was previously purchased under SERS replacement flat with portable SERS rehousing benefits, the MOP shall be 5 years from the effective date of purchase of the replacement flat. However if your current flat is selected for SERS replacement flat and you decide to go for the new replacement under SERS rehousing benefits, the MOP shall be either 5 years from the effective date of purchase of the replacement flat 7 years from the date of selection of the replacement flat, provided they had taken possession of the replacement flat, whichever effect first.

For HDB resale flat bought in the open market without using the CPF Housing Grant Scheme, there was a revision this year. Before 5 Mar 2010 where the resale application received by HDB, the MOP is 2 and a half years from effective date of resale if HDB loan was taken, or just 1 year from the effective date of resale if HDB loan was not taken. The 1 year MOP also apply to cases where bank’s Singapore Loans was taken to finance the purchase, or just cash purchase without any loan. Come after 5 March 2010, the MOP is 3 years standard from effective date of resale, regardless whether you take HDB loan, bank’s Singapore Loans, or cash purchase.

This latest HDB resale ruling to increase the MOP to 3 years was implemented in view to cool the rapidly rising price in HDB resale market since second quarter of 2009, as the previous MOP may attract unwanted buyers to speculate in the public housing open market within the 1 to 2 and half years period, which can potentially driving the resale prices higher without the true support from public housing demand. The objective is to reinforce owner-occupation and curb possible speculation or short-term profit.

You can check from the HDB website to further ascertain your eligibility. Access E-Services, ‘Selling Your Flat”, and check "Request for Confirmation of Eligibility to Sell Your HDB Flat". The online application form allows you to check the Computation of your Occupation Period for the Purpose of Resale. Simply fill up your personal data, flat purchase detail and submit, HDB shall reply if you’ve met the MOP.

In summary, HDB flat dwellers or owners, can only sell their flats in the open market to eligible buyers of their own choice if they are verified to be eligible. You may consult reliable realtor for further advice on selling your house if you are eligible to sell. A professional property agent should furnish you the latest Government, HDB and CPF rulings and transparent information such as recent transaction and current market trend to help you be well informed so that you can sell your HDB resale flat more effectively.

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