Upgrade from HDB to condo

First of all, when you are planning to upgrade from HDB to condo there are some pre-requisites to fulfill

  • MOP
  • Financial calculation (Cash, CPF, Loan)
  • Stamp duty

1. MOP

First and foremost, you must have served your Minimum Occupation Period (MOP) for your HDB flat to be able to purchase your next property.

Purchase mode MOP
Flat purchased from HDB 5 years
Design, Build, and Sell Scheme (DBSS) flat purchased from developer 5 years
Flat purchased under the Selective En bloc Redevelopment Scheme (SERS) Either one of the following:

  • 7 years from the date of flat selection which includes the wait time and occupation time
  • 5 years from the date of occupation
Flat purchased under SERS with Portable SERS Rehousing Benefits 5 years
Resale flat purchased from the open market with CPF Housing Grant 5 years

Resale flat purchased from open market without CPF Housing Grant

1 room flat No MOP
2 room flat or bigger Application date on or after 30 August 2010 5 years
2 room flat or bigger Application date between 5 March to 29 August 2010 3 years
2 room flat or bigger Before 5 March 2010
  • 2.5 years with HDB loan
  • 1 year without HDB loan

Source: https://www.hdb.gov.sg/cs/Satellite?c=Page&cid=1383799236311&d=Touch&pagename=InfoWEB%2FPage%2FArticleDetailPage

2. Financial Position

Second is your financial position for committing the next property purchase which consist of 3 components

  • Cash
  • CPF
  • Loan

Scenario 1: If you still have outstanding loan, your maximum loan to value for your second property is only 45%

Min cash: 25%
CPF (Cash top up if CPF insufficient): 30%
Loan: 45%

Scenario 2: If you have cleared your outstanding loan, then your maximum loan for your second property will be at 75%

Min cash: 5%
CPF (Cash top up if CPF insufficient): 20%
Loan: 75%

If you have utilized your CPF for your first property purchase, you need to set aside Basic Retirement Sum in your OA and SA. The remaining above the basic retirement sum in OA account can be used for your next property purchase.

Frequently asked question when you decide to upgrade from HDB to condo

  • Should I fully pay my HDB before purchasing my private property?
  • I have enough CPF to pay off my HDB, should I do that?
  • I want to keep my HDB for rental and purchase my next private property

Option 1: Keep your HDB flat now (Plan to sell in future) and buy condominium as second property

Decoupling is not allowed for HDB flat now so Additional Buyer Stamp Duty Tax is payable when you decide to purchase your second property. Thus, your financial position must be ready with your purchase.

More about ABSD refund and remission

  • The first residential property (co-owned or separately owned) is sold within 6 months after
    • The date of purchase of the second property for completed property or

    • The issue date of the Temporary Occupation Permit (TOP) / Certificate of Statutory Completion (CSC), whichever is earlier, if the property was uncompleted at the time of purchase

  • The married couple remains married and there is no change of ownership in the second residential property at the time of sale of the first residential property.
  • The married couple has not purchased or acquired any other residential property since the purchase of the second residential property.
  • The application for refund of ABSD is made within 6 months after the date of sale of the first residential property.

The question is how are you going to structure your private property purchase to minimize the Additional Buyer Stamp Duty Tax if you have plan to sell your HDB and decide to purchase second private condo for investment in the future?

Option 2: Sell your HDB and buy your condominium

This is the most straightforward method to upgrade from HDB to condo. This can either be from the open market or a new launch. One important factor to consider is the physical issue during the transition, where will you need to stay if the completion of your condo is after your HDB completion.

Upgrade from HDB to condo involve a lot of factors including timeline, financial, as well as stamp duty tax consideration. Therefore, careful planning is needed to make sure everything is done in orderly manner. Contact us for further discussion. What will be discussed during our meeting

  • Financial calculation (cash, CPF, stamp duty tax, and loan)
  • Pros and cons involve in upgrading (keeping HDB or selling HDB)
  • Timeline
  • Solution for FAQ
  • Solution for restructuring your purchase if intend to sell your HDB within 6 months upon completion/TOP to minimize ABSD