PERSONAL MONEY - AUGUST 2014

Hee... Hee... Hee..   I won a 3 days 2 nights hotel stay (worth RM2,200++) at Bukit Bintang.... :)

Singapoerean Benefits (Part II) (Revision 02)

Revision 02 (last paragraph): updated on August 25, 2014

  Private Residential Property Investment in Singapore

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Terminology:

1x Singaporean + 1x Singaporean = Singapore Household

1x Singaporean + 1x Singapore PR = Singapore Household

1x Singapore PR + 1x Singapore PR = Singapore PR Household

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If you are staying at Singapore HDB flat currently and you want to invest in private residential properties in Singapore. Do take note the following points:

(1) Only Singapore household can keep the HDB flat after they completed the purchase of the private residential properties (be it a resale or new property). Singapore PR household MUST sell their HDB flat 6 months after they complete the purchase of the private residential properties (resale) or 6 months after the TOP of the new private property. 

Singapore PR household MUST SELL HDB after buying a private residential property (be it for self stay or investment).

(2) If you intend to buy a private property for self stay and rent out the HDB flat, then, only Singapore household can rent out the entire HDB flat for good side income. Singapore PR household is NOT allowed to rent out the HDB flat.

Singapore PR household NOT ALLOWED to rent out the HDB flat.

(3) Singaporean pays 7% ABSD (Additional Buyer's Stamp Duty) for second real estate property purchase in Singapore whereby Singapore PR pays 10% ABSD.

Singapore PR pays 3% more ABSD.

Due to the first two points (1) & (2) , many Singapore PR drops the idea of buying the second private residential property in Singapore. Even if the price of the residential properties drop by 50%, Singapore PR will also not take any actions until the above cooling measures [especially points (1) & (2)] are removed, or at least majority of the Singapore PR will choose to wait.

Based on the news on July 29, 2014, there are many completed projects with many unsold units but most of them are "still expensive". There are also many launched, uncompleted projects with many unsold units too.

Take Clementi new condo, Trilinq, as an example, there are total 755 units. So far, they launched 250 units but 131 units unsold. In short, there are 636 units unsold out of total 755 units. That is 84.2% unsold for Trilinq. If they reduce the selling price to the same level as Waterfront @ Faber and also absorb SPR 10% ABSD, I don't mind to purchase one 1-bedroom for rental investment. Let's see if the selling price will drop to S$1,150 psf. With so many units unsold, IOI developer must cut prices to move units.

Updated on August 25, 2014

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I had made a phone call today to HDB Branch Customer Service Line: 1800-2255432 to confirm that Singapore household HDB can rent out the whole HDB flat and choose to stay at Private Condo at Singapore.

The only criteria: You have to fulfill the Minimum Occupation Period (MOP) of 5 years.

The details of the subletting guidelines can also be found at the HDB InfoWEB below.
 http://www.hdb.gov.sg/fi10/fi10323p.nsf/w/RentOpenMktRentOutWholeFlat?OpenDocument

Your tenants profile, ethnics group, Singaporean/ Singapore PR/foreigner will be based on your HDB block quota. It is the same as selling your HDB unit to certain etnics group until the quota is filled. Then, you can ONLY sell or rent to Singaporean only. Take note on this quota too. You can easily check the quota at the HDB website (the links shown below).

(1) For HDB rental:
You can perform "Enquiry on the Non-Citizen (NC) Quota for the Subletting of Flat" at the HDB website.

http://services2.hdb.gov.sg/webapp/BR12AWSublettingQuota/

My search result: I can rent out my whole HDB unit to anyone who is qualified to rent the HDB unit.

(2) For HDB sales:
You can perform "Enquiry on Buyer's Eligibility under the Etnic Integration Policy and SPR Quota" at the HDB website.

http://services2.hdb.gov.sg/webapp/BB29ETHN/BB29STREET

My search result: I can sell my HDB unit to anyone who is qualified to purchase a Resale HDB flat.

Of course my search results above are valid as for now. If you intend to sell your HDB flat or rent out your HDB unit say 3 years later, of course, you have to perform the latest enquiry again when you begin your procedure.

HDB decouple: (SPR + SC) household (Revision 03)

Revision 03 (last paragraph): updated on August 20, 2014
Revision 02: updated on June 9, 2014

You should hear "HDB decouple" term by now. I will talk about HDB decouple, not private property decouple. HDB rules are more stringent as it is a regulated market. HDB decouple is getting popular after Singapore government imposes heavy additional buyer stamp duty (ABSD). Decouple is not asking you to divorce. It is simply means to remove your spouse name from the property ownership and to become an occupier. What is the purpose by doing that?

" 2 owners = 1 owner + 1 occupier. "

There are two reasons:

(1) Get 80% housing loan instead of 50% housing loan
(2) Avoid paying 7% ABSD

After you become an occupier and not an owner of your existing HDB and when you buy a private property, that is your “first” property and you can get the housing loan up to 80%. It is because for second property, you are only able to get 50% housing loan from the bank. Of course, you can fully pay the outstanding housing loan and go ahead to buy second property with 80% housing loan from the bank without doing HDB decouple. Yes, you can do so too.

Secondly, it is to avoid paying 7% ABSD for Singaporean to buy and own the second property. This will be your first “owned” property (it is because you are an occupier for your "first" property, not the owner). Therefore, you do not pay any ABSD (0% ABSD) but just normal 3% stamp duty which apply to all. So, it makes sense to decouple Singaporean to become an occupier. If you decouple a Singapore PR to become an occupier, then when Singapore PR buys the “first” private property, you still have to pay 5% ABSD, second property for Singapore PR 10% ABSD.

So far so good?

Okay, when you want to do HDB decouple, HDB only allows ownership transfer by gift. No cash involved. But if your bank loan is with private bank, private bank will not allow ownership transfer by gift, it must be done through part sale (because the bank wants to make money!). But, HDB does not allow married couple to do part sale! You can’t just say, I want to buy my wife HDB shares by paying my wife cash and yet you two are still a happy loving couple. If you are in a truly divorce case, then HDB allows part sale. So, at the end, you can only do the HDB decouple by paying the outstanding housing loan in full.

Take note on HDB part sale, when you do that, you have to get the latest market value of the property, then, you buy 50% of the HDB from your wife with the current market price,  remember that whatever CPF OA money that your wife is paying for this HDB, you have to repay back to CPF OA account with accured interest. Then, for you as a Singapore PR to buy 50% of the HDB sale is as well subject to 5% ABSD as HDB treats this as a first property "new purchase". That is just when HDB allows you to do part sale.

Next, after Singaporean is decoupled and buy the first “owned” property, hooray, she can save 7% ABSD. But after decouple, the HDB ownership becomes Singapore PR household (1 SPR owner + 1 SC occupier). Singapore PR household cannot rent out the whole HDB unit. Then, what is the point? If you intend to stay in the HDB and rent out the private property, then it is still OK. But, our intention is to rent out the HDB unit and stay at the private property.

Also, if you insist to do HDB decouple, make sure you take note this, since your HDB becomes Singapore PR household, all the SC benefits of owning the HDB will be removed such as the utilities bill rebate, town councils rebate, all SC benefits are removed because the HDB is now a SPR household.

To make the whole matter worse, if you decided NOT to do HDB decouple and pay 7% ABSD by using one Singaporean name to buy the private property , even if you decide to sell the HDB within 6 months of the TOP, you still cannot get back the 7% ABSD, why? It is because Singapore government allows reimbursement of ABSD only if “a couple” is buying the private property for self-stay and disposes the HDB accordingly. Not one individual buyer to purchase the private property. If you buy the private property in one name, government will not refund you the 7% ABSD. The only way to get back the ABSD now is to put both name as a buyer for the private property and pay 10% ABSD instead (as they pick the SPR the highest percentage) and then when you dispose the HDB within 6 months after TOP, you will get this 10% ABSD back. Well, our primary goal is still keeping the HDB.

Who come out with all these well thought rules?!

As for SPR-SPR HDB household, you need not to waste time as you will not get any way out.

As for SC-SC HDB household, congratulations! That is why my real estate agent suggestion is to ask me to convert to Singaporean. Just for 7% ABSD? No thank you.



Updated on June 9, 2014

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VL (Valuation Limit) & Minimum Sum of S$77,500.

If your first HDB housing loan is still outstanding and the 100% Valuation Limit (VL) is not reached, you can wipe off your CPF OA amount to do the partial repayment. How does this Valuation Limit (VL) calculated ?

It is simple. Take the market value of your HDB property as at time of purchase, for example, market valuation was S$350,000 when you purchase your HDB minus off the total CPF used by all owners (you and your spouse) for downpayment and monthly instalments as at today, let say, S$137,000. So, S$350,000-S$137,000 = S$213,000. It means, you can use your CPF OA money up to S$213,000 (you and your spouse combined CPF sum in the OA account)  for this HDB property.

Thereafter, if you intend to purchase the second property and would like to use CPF OA account to serve the monthly instalment, you have to set aside a minimum sum of S$77,500 at combined OA and SA account first before you can touch the money at OA account. As for July 2014, the minimum sum is rasied to S$77,500. Take note on this. Thereafter you can use the CPF OA to serve your second property housing loan. 

CPF has a pretty good comprehensive CPF Housing Withdrawal Limits Calculator.

http://www.cpf.gov.sg/cpf_info/calculator/vl/vl_input.asp

Enjoy exploring !

Updated on August 20, 2014

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At the end, we did not do HDB decoupling after considering all the disadvantages.

(1) We maintan the SC HDB status.

(2) We pay 7% ABSD for the second private residential property (Real Estate Agent reimbursed us some of his commission, 5 digits sum).

(3) We will move into the privte residential property while TOP.

(4) We will rent out the HDB 4-room flat.

Waterfront @ Faber at Clementi , District 5 (Revision 04)

Revision 04 (last paragraph): updated on August 27, 2021

Revision 03: updated on March 28, 2016
Revision 02: updated on July 31, 2014

Yes!!! We had purchased a 4-Bedroom unit for self-stay. We can't wait for the TOP in late 2017. :)

Project Name: Waterfront @ Faber

Developer: World Class Land Pte Ltd
Address: Faber Walk 
Tenure: 99-years lease, starting from 17 September 2013
Site Use: Residential
Site Area: 15,125.40 m2, 162,809.8 ft2
Site Gross Floor Area: 21,176.00 m2
Expected TOP: 15 July 2018
Expected Legal Completion: 15 July 2021

Total Units: 199 Apartments &11 Strata Houses
Total Car Park Lots: 203 Basement Lots & 3 handicap lots, excluding strat houses lots
Unit Mix:
2-Bedroom; 2-Bedroom Dual Key; 3-Bedroom; 3-Bedroom Dual Key
4-Bedroom; 4-Bedroom Deluxe; 4-Bedroom Dual Key & Strata Landed

Unit Size: Type Area (sqm) Area (sqft)
2-Br 65-67 700-721
2-Br Dual Key 70-71 753-764
3-Br 96 1033
3-Br Deluxe 99-100 1066-1076
3-Br Dual Key 95 1023
4-Br 109-120 1173-1292
4-Br Deluxe 122-129 1313-1389
4-Br Dual Key 117 1259
Strata Landed 260-282 2799-3035

Updated on July 31, 2014
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All C1 type 4 Bedroom units at stack 01 & stack 08 are fully sold.

Total: 210 units
Sold: 90 units
Reserved: 9 units

Sold units percentage: 43% of total project
Sold units (include reserved units): 47% of total project

Updated on March 28, 2016

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Last 4 units available to grab:

1) Unit #04-09 (1,033 sq ft)

2) Unit #05-09 (1,033 sq ft)

3) Unit #02-23 (1,281 sq ft)

4) Unit #04-17 (1,389 sq ft)

The Waterfront @ Faber is now 98% SOLD. It will be FULLY SOLD before TOP for sure.

I hope the TOP can happen earlier by Q4 year 2017. Let's see. :)

Updated on August 27, 2021

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14x units had been sold at the resale market.

The highest PSF achieved so far was S$1,461 PSF.

The highest gain percentage achieved so far was 27.09%.

The highest price quantum achieved so far :

Terrace unit : S$2.65 million (S$899 PSF)

4-bedroom unit : S$1.85 million (S$1,432 PSF)

3-bedroom unit : S$1.53 million (S$1,436 PSF)

2-bedroom unit : 1.038 million (S$1,461 PSF)

Topics to be posted ~ you pick.

(1) Why I chose whole life insurance rather than term insurance ?

(2) The ten stocks you can still buy now even the DOW is at all time high

(3) The powerfulness of SRS retirement account - many people mislead that it is a CPF savings.

(4) Why working class Malaysian Women, Singapore PR, converted to Singaporean is a wise choice ?

(5) Why Australian dollars ia good buy when it is below AUD - SGD 1.20 level ?

(6) Why most of the Malaysian, Singapore PR, chose NOT to stay at Johor instead of Singapore ?.

(7) Why you should choose Sunway Iskandar than Horizon Hill at this moment !