Benefits of Selling Condo & Buying HDB? Should I Do It?

This is a common dilemma that many property owners in Singapore face – whether to sell their condominium and buy a HDB flat instead. There are a few factors to consider when making this decision:

Cost savings – Generally, HDB flats are more affordable than private condos. By downgrading to a HDB flat, you can unlock a substantial amount of cash from the sale proceeds of your current condo. This allows you to reduce your housing loan or have extra savings for other uses.

Location – Condos tend not to be accessible to amenities. HDB flats are centrally located. Consider whether the location of the HDB flat suits your needs.

Facilities – Condos come with facilities like pools, gyms, security guards etc. HDB flats have more basic facilities. Assess if these condo facilities are important to you.

Space – Condos are smaller in size. Make sure the HDB flat you intend to buy is sufficient for your household needs.

Rental demand – Condos typically enjoy higher rental demand and rates than HDB flats. Consider whether rental income is a priority.

Eligibility for grants – By buying a HDB flat directly from HDB, you may be eligible for grants of up to $80,000 for first-timer applicants. This can offset some costs. But you might have to wait 30 months after selling your condominium before you’re eligible for these grants.

Asset appreciation – Historically, condos have higher price appreciation than HDB flats. However, HDB resale prices have been rising quickly in recent years.

Overall, if your priority is to unlock equity, increase the living size area and reduce expenses, then a HDB flat may be more suitable. But weigh this against any downgrade in facilities and future appreciation potential. Consult a Caleb & Carol to run the numbers for your specific situation.

Do I Need To Wait 15 Months After Selling Private Property To Buy a Hdb?

During the previous cooling measures in Sep 2022.

A 15-month wait-out period has been imposed for private property owners looking to buy HDB resale flats. This aims to moderate demand and keep resale flats affordable, especially for first-time buyers.

The rationale is that private property owners tend to have greater means and ability to pay higher Cash-Over-Valuation (COV) amounts for resale flats which pushes up the property prices in HDB.

Seniors aged 55 and above are exempted from this wait-out period rule. Those with pressing housing needs can also appeal for exemption on a case-by-case basis. This wait-out period measure is intended to be temporary and will be reviewed based on overall housing demand.

In addition, tighter loan limits have been introduced to prevent buyers from over-leveraging amid rising interest rates. The loan-to-value (LTV) limit for HDB loans is now lowered from 85% to 80%.

All in, these cooling measures are aimed at keeping public housing affordable and accessible, while targeting private property owners to moderate demand and curb excessive borrowing.

Can i Buy a Resale HDB If I Own a Condominium?

Yes, private property owners are allowed to purchase a resale HDB flat. However, there are certain eligibility conditions you must meet:

• Regardless if it’s locally or overseas, you must have sold off your current private property.
• After the sale of all your residential private property, you need to wait out a 15-month period from the date of disposal/sale of your private property, before applying to buy the HDB resale flat.
• During this 15-month period, if you buy any other private residential property, the 15-month countdown will restart.
• You must be a Singapore Citizen or Permanent Resident to qualify for a resale HDB flat purchase. PRs are subject to Ethnic Integration Policy quota.
• You must pass the HDB’s eligibility criteria like annual income cap, not owning private property both locally and overseas, grant status etc.

So in summary, you can certainly buy a HDB resale after selling your private condo, provided you meet the timeframe, ownership and eligibility criteria set by HDB. You can appeal to HDB if you would like them to accept your unique circumstances earlier.

Can I Buy an Hdb After Selling Executive Condominium after Meeting the 5 Year Minimum Occupation Period of My EC?

Yes, you can buy an HDB flat after selling your Executive Condominium (EC) unit, provided you meet the 5-year Minimum Occupation Period (MOP) and other eligibility criteria. Here are some key points:

• After obtaining TOP (Temporary Occupation Permit) and keys for your EC unit, you must occupy it for 5 consecutive years before selling. This is the MOP requirement.
• During the MOP, you can rent out bedrooms but must maintain the EC as your primary residence.
• Once you pass the 5-year mark, you can then sell your EC unit on the open market. There is no restriction on sale price.
• After selling the EC, you will need to wait out a 15-month period before applying to buy a resale HDB flat or a new flat directly from HDB.
• This 15-month period applies from the date of legal completion of the EC sale. It allows time for all sale paperwork to be completed.
• During the 15 months, you should not purchase any other private residential property locally or overseas.
• Aside from waiting out the 15-month period, you need to meet all the usual eligibility criteria for buying a HDB flat as a second-timer applicant.

So in summary, yes you can buy a HDB flat after selling your EC. But you must first complete the 5-year MOP, sell the EC, wait out the 15-month period, and satisfy the eligibility criteria.

What’s the Difference Between a 15 Months Waiting Period vs 30 Month Waiting Period To Buy a HDB?

There are two different waiting periods that determine your eligibility to buy a HDB flat after selling private property:

15-month period

• Applicable after selling your Executive Condominium (EC) or private property or overseas property
• Starts from date of disposal of your property.
• Specifically applicable to purchasing resale HDB without grants

30-month period

• Applicable after selling your Executive Condominium (EC) or private property or overseas property.
• Starts from date of purchase of the private property.
• Specifically applicable to purchasing resale HDB with CPF Housing grants or Built To Order (BTO) or Sale of Balance Flat directly purchase from HDB or Executive Condominium Purchase from Developer.

Key Differences:

• 15-month period applies to resale HDB without grant while 30-month period applies to subsidized housing by HDB.
• Exceeding income ceiling not relevant for 15-month period but applicable for 30-month period.

What Is the Resale HDB Eligibility That I Need To Fulfill?

Here are the key HDB eligibility conditions you need to meet when buying a resale HDB flat:

Citizenship

• You must be a Singapore Citizen or Singapore Permanent Resident.
• You must be eligible under one of the housing eligibility schemes by HDB.

Income Ceiling

• Your household income must not exceed $14,000 per month if you’re applying for a housing grant.

Property Ownership

• You must not own any private residential property in Singapore or overseas.

Minimum Occupation Period

• MOP is 5 years for HDB flats and ECs.
• MOP is 10 years if you purchase a Prime Location Public Housing Scheme

Grants

• Eligible for grants up to $80,000 for first-timer applicants.
• No grants for second-timer applicants.

When Can I Buy Resale Hdb After Selling Private Property?

You can buy a resale HDB flat only after completing a 15-month waiting period from the date of selling your private residential property. Here is the timeline:

1. Serve notice of vacant possession to tenants (if currently renting out property).
2. Find a buyer and complete sale of your private property.
3. The 15-month waiting duration then applies from date of legal completion of sale.
4. During this period, do not buy any other private residential properties locally or overseas.
5. Complete the paperwork to relinquish your property ownership with IRAS, banks etc.
6. After you hit the 15-month mark, you can then apply to buy a resale HDB flat in the open market.
7. Get an Option to Purchase (OTP) for the resale flat from the seller.
8. Book a resale HDB flat appointment online with HDB.
9. Attend the appointment with seller to submit forms and documents.
10. HDB will process your application based on eligibility criteria and other buyers.
11. On approval, you can then exercise the OTP and complete the purchase.

So in summary, you can only buy a resale flat after the 15-month period from the date of sale completion of your private property. Factor this waiting duration into your housing plans.

What Is the Timeline for Selling Condo and Buying Hdb?

Here is a typical timeline when selling a private condominium and buying a HDB flat subsequently:

Preparation (2 months)

• Engage real estate agents to start marketing and finding buyers for current private condo.
• Shortlist potential HDB resale flats to buy.

Sale of Current Private Property (2-3 months)

• Accept offer, negotiate and exercise Option to Purchase (OTP) for condo.
• Condo sale completes when legal completion and keys handover done.

15-month Waiting Period (15 months)

• Waiting period applies from condo sale completion date before can apply for HDB flat.
• Do not buy another private residential property during this period.

Resale HDB Flat Application (2 months)

• After 15 months, start viewing resale property
• Put down deposit from your resale property.
• Get OTP for flat.
• Apply for resale flat application with HDB directly
• HDB reviews application based on eligibility.

Completion of Resale Purchase (2-3 month)

• Upon HDB approval, complete resale paperwork and payment.
• Collect keys and take possession of your new HDB flat.

So in total, you need to set aside around 22 months from start to end when making this transition. The 15-month waiting period forms a key timeline consideration.

Is It The Best Time To Sell Condo & Buy Hdb?

Here are some pros and cons of downgrading from a condominium to a HDB flat:

Pros of downgrading to HDB:

• Substantial cost savings as HDB flats are cheaper.
• Can unlock equity from current condo to pay for new flat or other uses.
• May be eligible for grants of up to $80,000 when buying HDB as first-timer.
• Get access to facilities like roof gardens, playgrounds in newer HDB estates.
• More convenient locations closer to amenities for some HDBs.

Cons of downgrading to HDB:

• Lose facilities like pools, gyms, security available in condos.
• Limited selection and quotas for ideal flat types, locations.
• Lower potential for capital appreciation compared to condo.
• Lose rental income potential as HDB flats have rental restrictions.

In general, downgrading to a HDB flat makes financial sense if you want to unlock equity and reduce housing expenses. But weigh this against lifestyle factors, future appreciation and rental income considerations.

How To Buy Condo Without Selling Hdb?

It is possible for HDB flat owners to buy a private condominium without having to sell their HDB flat, by taking an Additional Buyer’s Stamp Duty (ABSD) hit. Here’s how:

1. Buy a condo unit directly from a property developer or resale owner.
2. You will be slapped with a 20% ABSD on the condo purchase price if you’re a singaporean buying your 2nd property. This is a penalty tax for buying another residential property without selling your existing one.
3. Live in the condo as your primary residential property.
4. Rent out the HDB flat but ensure tenants and rental period meet HDB’s guidelines and eligibility criteria.
5. Retain your HDB flat and condo for as long as you can fulfill ownership, administrative and financial obligations for both properties.

So in summary, buying a condo without selling your HDB is possible if you can bear the hefty ABSD and comply with the usage and rental rules. Consider your finances carefully before committing.

What Should I Do First When It Comes to Selling Private Property?

Here are some recommended steps to take when planning to sell your private residential property:

1. Review property documents – Check documents related to purchase, ownership, loans, agents engaged etc.
2. Hire real estate agent – Engage an experienced agent familiar with your property’s area to advise on pricing, marketing etc.
3. Get updated valuations – Consider formal valuations to determine property’s current market value before pricing.
4. Set realistic asking price – Price it competitively based on agent advice, market comparable and your target sale period.
5. Improve property presentation – Do minor touch-ups, cleaning and decluttering to help it shine for viewings.
6. Stage for viewings – Remove clutter, make beds, tidy up to showcase the property and space well during viewings.
7. Market extensively – Utilize both traditional and online advertising channels to maximize visibility.
8. Facilitate viewings – Work within your schedule to allow agents to bring as many potential buyers to see the property.
9. Negotiate sale – If the first offer you get is good, consider going ahead with it.

Things I need to Pay When i Sell Condo and Buy HDB

Selling your private condominium and purchasing a HDB flat involves several taxes, duties, and payments that you should be aware of. Here are some key ones:

1. Seller’s Stamp Duty on Condo Sale

This is a tax paid by the seller, typically 4% – 12% of the condo sale price depending on holding period. As the seller, you should only sell your condominium after 3 years from purchase so that you do not need to pay Seller stamp duty.

2. Agent Commission on Condo Sale

Paid to the real estate agent or broker marketing and facilitating the sale. Typically 2% of sale price, split between buyer’s and seller’s agents.

3. Mortgage Penalty for Early Redemption

If you still have an outstanding mortgage on your condo, there may be early redemption penalties by the bank depending on your loan terms.

4. Legal Fees on Condo Sale

Payable to lawyers for conveyancing services, preparation and processing of legal documents. Estimate $2000-$3000 dependent on which law firm you used.

5. Buyer’s Stamp Duty on HDB Purchase

Up to 9% of the HDB flat purchase price depending on residential status. Applicable for second-timer buyers like yourself.

6. Option to Purchase (OTP) Fee

Payable to HDB Seller when you exercise the OTP to confirm a resale flat purchase. Typically ranges $1000 to $5000 dependent on the terms you have with the seller.

7. Legal Fees on HDB Purchase

Similar to condo sale, for lawyers to handle conveyancing, paperwork for the HDB flat purchase.

8. Mortgage Costs for HDB Loan

Interest and fees incurred to finance the HDB flat purchase if taking an HDB or bank loan.

Factor in all of the above taxes, duties and payments into your financial planning and budgeting when you sell your condo and buy a HDB flat subsequently. The key ones are BSD, agent commissions and OTP fee.

How Much Is the Buyers Stamp Duty BSD?

For the buyers stamp duty, it is dependent on the purchase price of the HDB you buy.

If it’s below $180,000, it is 1% of the purchase price.

If it’s below $360,000, it is 2% of the purchase price less $1800.

If it’s below $1,000,000, it is 3% of the purchase price less $5400.

Are you considering upgrading from an HDB flat to a condominium? Congratulations, you’re about to embark on an exciting journey towards a more luxurious and comfortable living experience. But before you dive into the world of condominium living, there are a few important things you need to know. In this ultimate guide, we’ll walk you through everything you need to consider and understand when making the transition. From understanding the financial implications to exploring the benefits of condo living, we’ve got you covered. Discover the key differences between HDB flats and condominiums, learn about the various financing options available, and get insider tips on finding the perfect condo for your needs. Whether you’re a first-time buyer or a seasoned homeowner, this guide will provide you with the knowledge and insights you need to make a well-informed decision. So, let’s get started on your journey to upgrading from an HDB to a condominium!

Understanding the Difference Between HDB and Condominiums

When considering an upgrade from an HDB flat to a condominium, it’s important to understand the key differences between these two types of housing. HDB flats are public housing units in Singapore, managed and developed by the Housing and Development Board (HDB). Condominiums, on the other hand, are private residential properties that offer a wide range of facilities and amenities. While both options provide housing, there are several factors that set them apart.

Firstly, ownership differs between HDB flats and condominiums. HDB flats are leased from the government for a fixed period of 99 years, while condominiums are owned outright by individuals or corporations. This means that when you purchase a condominium, you are buying a share of the property and have the freedom to sell or rent it out as you please.

Secondly, condominiums offer a more luxurious and exclusive living experience compared to HDB flats. Condos often come with a range of shared facilities such as swimming pools, gyms, and function rooms, which are not typically available in HDB developments. Additionally, condominiums are usually located in prime areas with easy access to amenities like shopping malls, restaurants, and parks.

Lastly, the price difference between HDB flats and condominiums can be significant. HDB flats are generally more affordable compared to condominiums, making them a popular choice for first-time homebuyers or those on a tighter budget. However, with the added luxury and amenities that come with condominium living, the higher price tag might be worth considering for those seeking a higher standard of living.

Reasons to Upgrade from HDB to a Condominium

There are several compelling reasons why upgrading from an HDB flat to a condominium might be the right choice for you. Firstly, condominiums offer a higher level of privacy compared to HDB flats. With fewer units per floor and better soundproofing, you can enjoy a quieter and more peaceful living environment.

Secondly, condominiums provide a wide range of facilities and amenities that can enhance your quality of life. From swimming pools and fitness centers to BBQ pits and playgrounds, these shared facilities offer a convenient and enjoyable lifestyle right at your doorstep. Additionally, many condominiums have 24-hour security, giving you peace of mind and a greater sense of safety.

Thirdly, upgrading to a condominium can be a smart financial move. Over time, condominiums tend to appreciate in value at a faster rate compared to HDB flats. This means that if you decide to sell your condo in the future, you may be able to earn a higher return on your investment. Additionally, owning a condominium gives you more flexibility in terms of renting out the unit, allowing you to generate passive income if desired.

Financial Considerations When Upgrading

When upgrading from an HDB flat to a condominium, it’s important to carefully consider the financial implications. Firstly, you need to determine your budget and how much you can afford to spend on a condominium. Take into account factors such as your current income, savings, and any existing loans or financial commitments.

Once you have a budget in mind, it’s time to explore the various financing options available. Condominiums can be financed through bank loans, housing loans, or a combination of both. It’s important to compare interest rates, loan terms, and repayment options to find the best financing solution for your needs. Additionally, consider consulting with a financial advisor to ensure you make a well-informed decision.

Another important financial consideration is the additional costs associated with owning a condominium. These can include monthly maintenance fees, property taxes, and sinking fund contributions. Take these expenses into account when budgeting for your upgrade to ensure you can comfortably afford the ongoing costs of condo living.

Finding the Right Condominium: Location, Amenities, and Facilities

When upgrading from an HDB flat to a condominium, finding the right property is crucial. There are several factors to consider when searching for the perfect condo for your needs.

Firstly, location is key. Consider factors such as proximity to your workplace, schools, public transportation, and amenities like shopping malls and parks. A well-located condominium can enhance your convenience and quality of life.

Next, take a look at the amenities and facilities offered by the condominium. Do you value a swimming pool, a gym, or a playground? Consider your lifestyle and preferences to ensure the condo you choose aligns with your needs.

Additionally, it’s important to research the reputation and track record of the developer. Look for developers with a proven track record of delivering high-quality projects and excellent customer service. This will give you peace of mind knowing that you’re investing in a well-built and well-maintained property.

Researching the Property Market and Prices

Before making your upgrade from an HDB flat to a condominium, it’s essential to research the property market and prices. This will help you make an informed decision and ensure you get the best value for your money.

Start by researching recent property transactions in the area you’re interested in. This will give you an idea of the current market prices and trends. You can access this information through online property portals or by consulting with a real estate agent.

Additionally, consider engaging the services of a property valuer to get an independent assessment of the property’s value. This will help you determine whether the asking price is fair and whether there is room for negotiation.

Lastly, keep an eye on upcoming property launches and new developments. Buying a property during the pre-launch or early stages of development can sometimes offer better deals and discounts.

Financing Options for Upgrading

When upgrading from an HDB flat to a condominium, there are several financing options available to you. It’s important to explore these options and choose the one that best suits your financial situation.

One common financing option is a bank loan. Banks offer competitive interest rates and flexible repayment terms, making them an attractive choice for many homebuyers. However, keep in mind that bank loans typically require a higher down payment compared to HDB loans.

Another option is an HDB loan. If you meet the eligibility criteria, you can apply for an HDB housing loan to finance your condominium purchase. HDB loans generally have lower interest rates and more relaxed eligibility requirements compared to bank loans. However, they also have certain limitations, such as a maximum loan tenure of 25 years.

You can also consider a combination of bank and HDB loans. This allows you to take advantage of the lower interest rates offered by HDB loans while benefiting from the flexibility of a bank loan.

Selling Your HDB Flat: Process and Considerations

When upgrading from an HDB flat to a condominium, you’ll need to sell your existing HDB flat. This process can be complex, so it’s important to understand the steps involved and the considerations to keep in mind.

Firstly, engage the services of a trusted real estate agent who specializes in HDB resale transactions. They will guide you through the process, help you set the right asking price, and market your flat to potential buyers.

Before putting your HDB flat on the market, make sure it’s in good condition. Consider making any necessary repairs or renovations to enhance its appeal. Additionally, gather all the required documents such as the valuation report, floor plan, and recent property tax statement.

When negotiating with potential buyers, be prepared to consider factors such as the selling price, the timeline for completion, and any conditions or requests from the buyer. Your real estate agent will help you negotiate the best deal and ensure a smooth transaction.

Once you’ve successfully sold your HDB flat, you can use the proceeds to finance your upgrade to a condominium. Remember to consult with a financial advisor to ensure you make the most of your sale proceeds and make wise financial decisions.

Legal and Administrative Considerations When Upgrading

When upgrading from an HDB flat to a condominium, there are several legal and administrative considerations to keep in mind. These include the application process, eligibility criteria, and documentation requirements.

Firstly, you’ll need to submit an application to purchase a condominium. This involves completing a set of forms and providing supporting documents such as your NRIC, proof of income, and proof of residency. The developer or the sales team will guide you through the application process and provide you with the necessary forms.

Additionally, ensure you meet the eligibility criteria set by the government and the developer. These criteria can include factors such as citizenship, income level, and ownership of other properties. Make sure to check the eligibility requirements before committing to a purchase.

During the purchase process, you’ll also need to engage a lawyer to handle the legal aspects of the transaction. They will review the sales and purchase agreement, conduct property searches, and ensure a smooth transfer of ownership.

Lastly, consider engaging the services of a professional interior designer or renovation contractor to help you transform your new condominium into your dream home. They will work with you to create a design concept, source for materials, and oversee the renovation process.

Moving from HDB to a Condominium: Tips and Checklist

Moving from an HDB flat to a condominium can be an exciting but challenging process. To ensure a smooth transition, here are some tips and a checklist to help you along the way.

1. Plan your move in advance: Create a timeline and schedule for your move, taking into account factors such as renovation completion, handover of keys, and moving logistics.

2. Declutter and organize: Before packing, take the opportunity to declutter and get rid of any items you no longer need or want. This will make the moving process more efficient and help you start fresh in your new home.

3. Pack strategically: Pack your belongings systematically, labeling each box with its contents and the room it belongs to. This will make unpacking and setting up your new home much easier.

4. Arrange for utilities and services: Contact utility providers such as electricity, water, and internet to arrange for the transfer of services to your new condominium. Additionally, inform relevant parties such as banks, government agencies, and subscriptions about your change of address.

5. Hire professional movers: Consider hiring professional movers to handle the logistics of your move. They will ensure your belongings are safely transported to your new home, saving you time and effort.

6. Set up your new home: Once you’ve moved into your new condominium, take the time to set up your home and make it comfortable. Unpack your belongings, arrange furniture, and personalize the space to reflect your style and preferences.

Common Challenges and Pitfalls When Upgrading

While upgrading from an HDB flat to a condominium can be a rewarding experience, it’s important to be aware of common challenges and pitfalls that may arise along the way. By understanding these challenges, you can better prepare and mitigate any potential issues.

One common challenge is the higher financial commitment associated with condominium living. In addition to the higher purchase price, you’ll need to consider ongoing expenses such as monthly maintenance fees, property taxes, and sinking fund contributions. Make sure to factor these costs into your budget to avoid any financial strain.

Another challenge is the longer waiting time for new condominium projects. If you’re purchasing a new development, be prepared for the possibility of delays in completion and handover. This can affect your moving timeline and plans, so it’s important to have contingency plans in place.

Lastly, be aware of the potential impact on your lifestyle and daily routines. Condominium living may come with certain rules and regulations that you need to adhere to. This can include restrictions on pet ownership, noise levels, and renovation works. Make sure to familiarize yourself with the condominium’s by-laws and regulations to ensure a smooth transition.

Conclusion: Is Upgrading from HDB to a Condominium Right for You?

Upgrading from an HDB flat to a condominium is an exciting journey, but it can also be complex and overwhelming. With the right guidance and support, however, you can navigate this transition smoothly and confidently. That’s where I, Caleb Seah, your trusted real estate agent, come in.

As an experienced professional in the real estate industry, I understand the ins and outs of the HDB-to-condominium upgrade process. I am well-versed in the key differences between HDB flats and condominiums, the financial considerations involved, and the various financing options available. I can help you explore the property market, analyze prices, and negotiate the best deal for your dream condominium.

By choosing me as your real estate agent, you’ll benefit from my extensive knowledge of the market, access to a wide network of resources, and my commitment to delivering exceptional service. I will work closely with you to understand your needs, preferences, and budget, ensuring that we find the perfect condominium that meets your requirements.

Throughout the entire journey, I will be by your side, offering valuable insights, handling legal and administrative processes, and providing guidance on property valuations, financing options, and the selling of your HDB flat. With my expertise and attention to detail, I will make sure you are well-informed at every step, making the upgrade process hassle-free and rewarding for you.

Whatsapp us to find out more on how we are able to help you today!