With recent property cooling measures, what can you upgrade to if you were to sell your existing property today?
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PUBLISHED ONDecember 12, 2022 4:09 AM
When the Sept 30 cooling measures were announced, different segments of potential homebuyers and sellers were affected.
For example, suppose you're a first-time two- or three-bedroom HDB BTO owner who has completed your five-year Minimum Occupation Period.
In that case, you may wonder if you'll be impacted if you sell your HDB flat in the resale market and upgrade to a larger five-room BTO unit, HDB resale unit, EC or private condo.
Another segment that may have been impacted is those who currently own a two- or three-room private investment condo and plan to sell it to upgrade to a four- or five-room HDB resale flat.
To assuage your concerns here is a quick guide table on your options if you upgrade as a property owner or investor. Note that generally, the same rules should apply to your other half if you're jointly applying for or buying with a significant other.
Selling to upgrade? Here are some notable conditions, particularly how the December 2021 and September 2022 cooling measures would affect you:
| If you don't own any property | If you own only an HDB BTO unit | If you only own an HDB resale unit | If you only own an executive condominium | If you only own a private condominium | If you only own a landed property | If you only own an overseas property | |
|---|---|---|---|---|---|---|---|
| Applying for BTO | You will be subject to tightened stress-test interest rate, Total Debt Servicing Ratio (TDSR) and Loan-to-Value (LTV) limits if you're taking a Housing Loan. |
You will be subject to tightened stress-test interest rate, TDSR and LTV limits if you're taking a Housing Loan.
You must sell your existing HDB flat within six months of collecting the keys to the BTO. |
You will be subject to tightened stress-test interest rate, Mortgage Servicing Ratio (MSR), TDSR and LTV limits if you're taking a Housing Loan. You will also need to have completed your five-year MOP (10 years for PLH). You must sell your existing HDB flat within six months of collecting the keys to the BTO. |
You will be subject to tightened stress-test interest rate, MSR, TDSR and LTV limits if you're taking a Housing Loan. You must also have completed the five-year MOP for your EC (if it’s a new EC). You will also need to sell your existing property and wait 30 months. |
You will be subject to tightened stress-test interest rate, MSR, TDSR and LTV limits if you're taking a Housing Loan. You will also need to sell your existing property and wait 30 months. If you sell your property within three years, you'll need to also pay Sellers Stamp Duty (SSD). |
You will be subject to tightened stress-test interest rate, MSR, TDSR and LTV limits if you're taking a Housing Loan. You will also need to sell your existing property and wait 30 months. If you sell your property within three years, you'll need to also pay Sellers Stamp Duty (SSD). |
You will be subject to tightened stress-test interest rate, MSR, TDSR and LTV limits if you're taking a Housing Loan. You will also need to sell your existing property and wait 30 months. |
| Buying an HDB resale flat | You will be subject to tightened stress-test interest rate, TDSR and LTV limits if you're taking a Housing Loan. |
You will be subject to tightened stress-test interest rate, MSR, TDSR and LTV limits if you're taking a Housing Loan. You will also need to have completed your five-year MOP. You must sell your existing HDB flat within six months of collecting the keys to the resale flat. |
You will be subject to tightened stress-test interest rate, MSR, TDSR and LTV limits if you're taking a Housing Loan. You will also need to have completed your five-year MOP (10 years for PLH). You must sell your existing HDB flat within six months of collecting the keys to the resale flat. |
You will be subject to tightened stress-test interest rate, MSR, TDSR and LTV limits if you're taking a Housing Loan. You will also need to sell your existing EC and wait 30 months. If you're 55 years and older, you can buy a four-room or lower HDB resale without the 15-month waiting period.
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You will be subject to tightened stress-test interest rate, MSR, TDSR and LTV limits if you're taking a Housing Loan. You will also need to sell your property and wait 15 months. You are subject to Sellers Stamp Duty if you sell within three years.
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You will be subject to tightened stress-test interest rate, MSR, TDSR and LTV limits if you're taking a Housing Loan. You will also need to sell your property and wait 15 months. You are subject to Sellers Stamp Duty if you sell within three years.
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You will be subject to tightened stress-test interest rate, MSR, TDSR and LTV limits if you're taking a Housing Loan. You will also need to sell your property and wait 15 months. If you're 55-years and older, you can buy a four-room or lower HDB resale without waiting.
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| Buying a new or resale EC | You will be subject to tightened stress-test interest rate and TDSR if you're taking a Housing Loan from a Singapore bank. |
You will be subject to tightened stress-test interest rate, MSR (if it's a new EC) and TDSR if you're taking a Housing Loan (via a financial institution like a bank). You will also need to have completed your five-year MOP (10 years for PLH). You must sell your existing HDB flat within six months of collecting the keys to your new EC.
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You will be subject to tightened stress-test interest rate, MSR (if it’s a new EC) and TDSR if you're taking a Housing Loan (via a financial institution like a bank). You will also need to have completed your five-year MOP (10 years for PLH). You must sell your existing HDB flat within six months of collecting the keys to your new EC.
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You will be subject to tightened stress-test interest rate, MSR (if it’s a new EC) and TDSR if you're taking a Housing Loan (via a financial institution like a bank). You will also need to have completed your five-year MOP if it’s a new EC. If you're buying a resale EC (sixth year from its TOP), you can retain your existing EC but subject to ABSD.
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You will be subject to tightened stress-test interest rate, MSR (if it’s a new EC) and TDSR if you're taking a Housing Loan (via a financial institution like a bank. As ECs are considered hybrid-public-private properties by HDB, you must sell your existing private property and wait for 30 months before buying a new EC. If you're buying a resale EC (sixth year from its TOP), you can retain your existing property but subject to ABSD.
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You will be subject to tightened stress-test interest rate, MSR (if it’s a new EC) and TDSR if you're taking a Housing Loan (via a financial institution like a bank). As ECs are considered hybrid-public-private properties by HDB, you must sell your existing private property and wait for 30 months before buying a new EC. If you're buying a resale EC (sixth year from its TOP), you can retain your existing property but subject to ABSD. |
You will be subject to tightened stress-test interest rate, MSR (if it’s a new EC) and TDSR if you're taking a Housing Loan (via a financial institution like a bank. As ECs are considered hybrid-public-private properties by HDB, you must sell your existing overseas property and wait for 30 months before buying a new EC. If you're buying a resale EC (sixth year from its TOP), you can retain your existing overseas property.
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| Buying a private condo | You will be subject to tightened stress-test interest rate and TDSR if you're taking a Housing Loan from a Singapore bank. |
You will be subject to tightened stress-test interest rate and TDSR if you’re taking a Housing Loan from a Singapore bank. You will also need to have completed your five-year MOP (10 years for PLH). You will be subject to higher Additional Buyer's Stamp Duty (ABSD) as this is your second property. |
You will be subject to tightened stress-test interest rate and TDSR if you're taking a Housing Loan from a Singapore bank. You will also need to have completed your five-year MOP (10 years for PLH). You will be subject to higher Additional Buyer's Stamp Duty (ABSD) as this is your second property. |
You will be subject to tightened stress-test interest rate and TDSR if you're taking a Housing Loan from a Singapore bank. You will also need to have completed your five-year MOP if your current EC is new. You will be subject to higher Additional Buyer's Stamp Duty (ABSD) as this is your second property.
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You will be subject to tightened stress-test interest rate and TDSR if you're taking a Housing Loan from a Singapore bank. You will be subject to higher Additional Buyer's Stamp Duty (ABSD) as this is your second property. |
You will be subject to tightened stress-test interest rate and TDSR if you're taking a Housing Loan from a Singapore bank. You will be subject to higher Additional Buyer's Stamp Duty (ABSD) as this is your second property.
|
You will be subject to tightened stress-test interest rate and TDSR if you're taking a Housing Loan from a Singapore bank. |
| Buying a landed property | You will be subject to tightened stress-test interest rate and TDSR if you're taking a Housing Loan from a Singapore bank. |
You will be subject to tightened stress-test interest rate and TDSR if you're taking a Housing Loan from a Singapore bank. You will also need to have completed your five-year MOP (10 years for PLH). You will be subject to higher Additional Buyer's Stamp Duty (ABSD) as this is your second property.
|
You will be subject to tightened stress-test interest rate and TDSR if you're taking a Housing Loan from a Singapore bank. You will also need to have completed your five-year MOP (10 years for PLH). You will be subject to higher Additional Buyer's Stamp Duty (ABSD) as this is your second property. |
You will be subject to tightened stress-test interest rate and TDSR if you're taking a Housing Loan from a Singapore bank. You will also need to have completed your five-year MOP if your current EC is new. You will be subject to higher Additional Buyer's Stamp Duty (ABSD) as this is your second property. |
You will be subject to tightened stress-test interest rate and TDSR if you're taking a Housing Loan from a Singapore bank. You will be subject to higher Additional Buyer's Stamp Duty (ABSD) as this is your second property. |
You will be subject to tightened stress-test interest rate and TDSR if you're taking a Housing Loan from a Singapore bank. You will be subject to higher Additional Buyer's Stamp Duty (ABSD) as this is your second property. |
You will be subject to tightened stress-test interest rate and TDSR if you're taking a Housing Loan from a Singapore bank. |
| Buying an overseas property | You will be subject to tightened stress-test interest rate and TDSR if you're taking a Housing Loan from a Singapore bank. |
You will be subject to tightened stress-test interest rate and TDSR if you're taking a Housing Loan from a Singapore bank. You will also need to have completed your five-year MOP (10 years for PLH). |
You will be subject to tightened stress-test interest rate and TDSR if you're taking a Housing Loan from a Singapore bank. You will also need to have completed your five-year MOP (10 years for PLH). |
You will be subject to tightened stress-test interest rate and TDSR if you're taking a Housing Loan from a Singapore bank. You will also need to have completed your five-year MOP if your current EC is new. |
You will be subject to tightened stress-test interest rate and TDSR if you're taking a Housing Loan from a Singapore bank. | You will be subject to tightened stress-test interest rate and TDSR if you're taking a Housing Loan from a Singapore bank. | You will be subject to tightened stress-test interest rate and TDSR if you're taking a Housing Loan from a Singapore bank. |
Do note that other eligibility conditions not mentioned here, like the applicant's age, nationality, type of scheme applied, housing grants, income ceiling, past housing history and so on, apply for different scenarios.
If you...
1) Don't own any property
As a first-time property owner, eligibility will mainly be focused on your age, nationality, scheme (joint or single) and income ceiling.
Cooling measures-wise, you'll be impacted if you apply for a housing loan, which means tightened stress-test interest rates, and loan-to-value limits.
For stress-test interest rates, this has been increased as of Sept 30, from 2.6 per cent to 3 per cent for HDB loans and 3.5 per cent to 4 per cent for bank loans. Stress-test interest rates or interest rate floors are used to calculate your loan quantum to ensure affordability.
For loan-to-value limits, this has been reduced from 85 per cent to 80 per cent for HDB housing loans as of Sept 30.
For loans from financial institutions, the LTV limit remains at 75 per cent (since 2018's cooling measures). Stricter LTV limits mean lower borrowing amounts (and thus, the potential need to fork out a higher downpayment in cash and CPF or find a lower-priced alternative).
If you're servicing other loans like unsecured credit cards or car loans, your Total Debt Servicing Ratio (TDSR) will be critical, as your total debt obligations cannot exceed 55 per cent of your monthly income.
2) Only own an HDB BTO unit
If you only own a BTO unit and you're applying for another BTO unit, you must first complete your five-year Minimum Occupation Period (MOP) (10 years if it's a PLH unit).
You must also dispose of your existing HDB unit within six months of collecting the keys to your new BTO unit, as you're not allowed to own two HDB flats at any time.
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This applies to buying HDB resale flats and new ECs as well.
If you're buying a resale EC (sixth year from its TOP), you can retain your existing HDB. Note that only Singaporeans and Singapore PRs can buy a resale EC from its sixth to 10th year.
Foreigners can buy resale ECs when it becomes fully private from their 11th year onwards. Naturally, ABSD on your second property applies if you keep your HDB flat.
If you're buying a private property, like a private condo or landed house, you can retain your HDB flat.
You can apply for up to two subsidised housing flats (ie. flats bought using CPF Housing Grant) but you'll need to pay a resale levy on your second subsidised flat.
3) Only own an HDB resale unit
Most policies in owning a BTO unit apply if you're an existing HDB resale owner.
One area to note if you're applying for an HDB housing loan is that you'll also be subject to the Mortgage Servicing Ratio, or MSR, where the maximum mortgage you can pay is 30 per cent of your monthly income. This applies to new ECs as well.
Similar to owning a BTO unit, you can retain your HDB resale unit if you're buying a resale EC from its sixth year onwards.
The resale EC will be treated as a second property and you'll be subject to ABSD. This would similarly apply if you're buying private property in Singapore and has no intention of selling your existing HDB resale flat.
4) Only own an executive condominium
If you're the owner of a new EC and you've completed your five-year MOP, you can choose to apply for a BTO only after waiting 30 months of selling your EC.
For HDB resale flats, you'll have to wait 30 months (but that period is shortened to 15 months if you did not use any CPF Housing Grants, with the exception of the Proximity Housing Grant).
If you're buying a new EC, you'll have to wait 30 months after selling your existing EC before you're able to do so.
However, if you're buying a resale EC (in its sixth year onwards), you can retain your existing EC but will be subject to ABSD as the resale EC will be your second property. This also applies if you're keeping your existing EC and buying private properties (condo or landed).
5) Only own a private condominium
If your only property is a private condominium, the Sept 30 cooling measures would have also had a greater impact on your right-sizing or upgrading plans.
This is because you'll have to wait at least 15 months after selling your condominium (whatever flat type or the number of rooms it has), before you can buy an HDB resale flat.
However, if you're 55 years old or older, you can buy a four-room or lower HDB resale flat without needing to wait out 15 months.
The 30-month waiting period rule for BTO and new ECs remains the same.
If you're buying a resale EC (sixth year onwards), you can retain your private condo but will be subject to higher ABSD (as per the December 2021 cooling measures).
6) Only own a landed property or a strata-landed unit
The policies for private condominium applies if you're the owner of a landed home or a strata-landed house within a condominium development.
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Note that in general, if you're selling your landed house, you are restricted to only Singaporean citizen buyers.
However, if your landed house is part of a regulated list of landed housing types under the Singapore Land Authority, you can sell your landed house to Singapore PRs and foreigners, subject to them obtaining the necessary approval.
Singapore PRs can buy your house without approval if it is a strata-landed house in an approved condominium development (not projects classified as "apartments" by URA) or a leasehold estate in a landed residential property for a term not exceeding seven years, including any further term which may be granted by way of an option for renewal.
For non-PR foreigners, they can buy your house if it's located within Sentosa Cove, but for a land area no larger than 1,800 square metres.
7) Don't own any property in Singapore but have an overseas property
If you only own overseas property, then you have to make some difficult decisions if you intend to buy a BTO or a new EC unit.
For starters, you'll need to first sell your overseas property and wait 30 months before you can apply for or buy these properties. If it's an HDB resale, then the wait is 15 months minimum (unless you're 55 years old and above, as we've shared previously).
The challenge of course is you'll be subject to different home-selling rules in the overseas country, including being exposed to potentially terrible foreign currency exchange rates.
However, if you're buying a resale EC or private property, you can retain your overseas property.
8) Only own a commercial property (like a shophouse)
Finally, if you only own a commercial property, like a non-residential shophouse, or an office, you will not be impacted as much by the cooling measures when buying your first residential property in Singapore.
However, you will still be exposed to some of them if you're applying for loans – with higher stress-test interest rates, MSR (if you're buying HDB or new EC), TDSR and loan-to-value limits.
ALSO READ: Biggest winners and losers of the latest cooling measures in 2022: How does this affect you?