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

====================

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
==================
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

====================

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

=======================

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 !

Singaporean Benefits (Part I) (Revision 02)

Revision 02: updated on July 29, 2014

If you are a Singapore Permanent Resident (SPR) and still in dilemma if you want to apply for Singapore Citizenship, this blog might give you a better picture. Let's jump into the topic. If you are a single, forget it, don't waste your time, stick to your own nationality. If you plan to have kids in Singapore, that makes much more sense to become a Singaporean especially for working class women. Nevertheless, below are the Singaporean benefits apply purely for us, you may use it as a reference.

(1) Lower rate of HDB Service & Conservancy Charges (S&CC)
As we all know, most of the town councils now increase the rates for the S&CC. Singaporean rate remain the same. Our 4-room HDB monthly rate now from normal rate of S$61.50 dropped to S$51.60. That's annual saving of S$118.80.

(Take not that in year 2011, Singapore government waived 2 months S&CC for Singapore 4-rooms flat household, but not this year, so on and off, you will hear government waiving some S&CC charges only for Singaporean household).

(2) Baby Bonus - Cash gift from Singapore government - one time S$4,000 for your 1st child.
It is free cash for you, transferred into your normal saving account. ( It is now raised up to S$6,000 for the 1st child starting from end of August 2012 and we are the first batch to get S$6,000 ! ).

3. Additional S$6,000 from Singapore government. It is a matching governemnt contribution in Child Development Account (CDA), provided that you also save S$6,000 in the account. There are only two banks offering the CDA accounts. Standard Chartered and OCBC bank. We chose OCBC bank simply because they have a sign-up booth at the hospital. 

OCBC CDA saving account gives 0.5% interest , if you keep $20,000 balance in the CDA account, the interest is 0.8%. Alternatively, I  upgraded my OCBC CDA account to OCBC CDA extra by committing S$50 per month GIRO into this account. This as well can earn higher interest from 0.5% a year to 0.8%. For a normal saving acccount, 0.8% interest a year is very high in Singapore, even higher than the fix-deposit in Singapore. :)

The money in the CDA account may be used by all your children to pay for: 1) Fees at Approved Institutions (AIs) which have registered with MCYS under the Baby Bonus Scheme:
a) Child Care Centres;
b) Kindergartens and special education schools registered the Ministry of Education (MOE) or the Council for Private Education (CPE);
c) Early intervention programmes registered with the National Council of Social Service (NCSS) or the Centre for Enabled Living;
d) Healthcare institutions licensed under the Private Hospitals and Medical Clinics (PHMC) Act;
e) Licensed pharmacies;
f) Optical shops; and
g) Assistive technology device providers

Sometimes, I see stupid complaints that they regret to bank in the money into the CDA account (as they can't take out the money until the baby turn 6 years old) and they can't wait to withdraw the money by then.

As for me, I wish the government will match the dollar-for-dollar saving up to S$12K for the first kid. A simple calculation shows that17 months of infant child care will easily dry up the CDA account balance of S$12K. Anyway, I will use CDA account for my baby vacinnation, doctor fees, infant care center, and thereafter child care center. I am also very grateful that my company allows us to claim our kids doctor fees of up to S$1,000 per year. That's very good policy indeed.



4. Parenthood Tax Rebate. For the first baby, Singapore government gives you one time tax rebate of S$5,000. You can use this S$5,000 to pay your yearly income tax. It is roughly FREE income tax for the next 3 years at least.... :) Not to mention, additional S$10,000 for 2nd kid , S$20,000 for 3rd kid. It is like the next 20 years, you don't have to pay a single cent for income tax! Why Singaporean doesn't want to have more kids ?

5. For the 1st child, mother can claim working mother's child relief (WMCR) which is 15% of the mother's earned income. Majority of the saving come from here, do your own maths and you will be shocked too. I can't imagine some can claim even up to 25% of the mother's earned income (if you have three children and above), the saving will be tremendous !

6.Tax matter also. Farther or mother of the child can claim qualifying child relief (QCR), which is S$4,000 per child. With WMCR (working mother's child relief) + QCR (qualifying child relief), a rough estimation shows mother can pay less tax per year up to S$1,600 - S$2,800 (depend on mother earned income). It will be at least 4 digits saving per year!    

                                            In order to understand the tax matters in Singapore, you have to know the income tax rates working in Singapore, this is the latest rate.    

                                          Let say we will work in Singapore until age 58, that's another 25 years. Why I use 25 years? It is because you can claim the WMCR & QCR rebate until the kid started his first career and have his own income. You can claim above two rebate even if the kid is studying full time at any university. The total cost saving from Singapore PR to Singaporean will be at least S$100,000 for one kid and the list is not done yet. I have yet to calculate the HDB housing benefits, children education fees and many more, such as, waiver of certain SP utilities bills, some one-time bonuses announced each years, etc.I shall keep track those benefits along the way.     In conclusion, it is a wise choice. For us la ! (to be continued... ) Wait a minute, I should calculate the saving for the second baby and third baby too !!! you will be surprised if you can save up to SGD 400,000 .. :)

       
Updated on July 29, 2014

==================

Singapore government is also quite generous to give GST Voucher in terms of Utilities Save and Special Payment for you to trade off the utilities bill. For year 2014, for a 4 rooms HDB flat, you will get S$330. In addition, you also receive two months waiver of town councils fees. Not bad indeed.

BUY: Religare Health Trust

I never write a blog to buy a single share but today I am going to recommend you to buy a new share just listed last Friday at 2 P.M. at SGX market.

It is Religare Health Trust and Fortis Healthcare is the biggest cornerstone investor of course. You can google this health trust and know the details through the Internet by yourself, but I am going to say a few words here.

It is all about the hospital income in India.

There are some interesting story about Fortis Healthcare. They used to offer to buy Singapore Parkway Healthcare but failed to Malaysia Khazanah fund by just merely S$100 million bid away, and Khazanah repackage them and dual listed them at KLSE and SGX market. It is called IHH. It is another good one, no doubts.

IPO price of Religare Health Trust is S$0.90. Last friday opening was S$0.89 and crashed further to S$0.805. Guess what, the stock price continued to crash in the early opening today, thanks to Mr. Dow last Friday night  of massive 200 points drop. It drops immediately to S$0.76 this early morning before recovering strongly at closing at S$0.835.

The stronghold exist at S$0.805-S$0.81 today.

Let's talk about dividend, projected yield based on IPO price of S$0.90 was 8.9% and 9.1% in year 2003 and 2004 respectively.

With the price of S$0.77, the dividend yield become 10.4% and 10.6%. 

Tell me which solid blue chip will give you such dividend yield ? I miss SABANA REITS and I won't miss this. What price I am buying ? Isn't very clear to you? Good luck, folks.