Property owners and real estate investors frequently ask, “Can I purchase a condominium if I own an HDB flat?” and “Can an HDB owner acquire a condo?” They also frequently ask, “Can I buy private property if I own an HDB flat?” These inquiries primarily aim to determine if house owners are permitted to concurrently possess both an HDB unit and a condo.

How will property restrictions like Loan-to-Value (LTV) and Additional Buyer’s Stamp Duty (ABSD) affect HDB flat owners who want to buy a private condo? Let’s investigate.

An HDB owner may purchase private property. These Are the Important Factors:

The following regulations and norms, in addition to taxes that must be paid, must be taken into consideration if you own an HDB apartment and wish to purchase private property.

1) You must adhere to the 5-year Minimum Occupancy Period if you buy a Build-to-Order (BTO) unit from the Housing and Development Board (HDB) or a resale HDB flat from the open market (MOP).

The following are prohibited at this time: 

• Sell the BTO unit or the HDB apartment on the open market
• Obtain any private property, whether it is in Singapore or elsewhere.

The MOP begins on the day you get the keys to your BTO unit or resale HDB apartment. It doesn’t include any time you weren’t residing there, such as when the entire house is rented out or when the MOP has been broken. Please be aware, too, that breaking the MOP regulations might result in fines of up to $50,000 or the government taking your HDB apartment against your will.

Note: Buyers must adhere to the 5-year MOP when purchasing ECs for the first time. After then, Singapore citizens and permanent residents may purchase it (PRs). The EC will be privatised after ten years and can be sold to foreigners. The MOP regulation is not applicable to purchasers of resold ECs.

2) Status of Citizenship or Residency

You might be thinking, “Can I purchase a condo and if I possess an HDB flat?” if you are a Permanent Resident (PR). No, is the response.

According to the HDB, PRs who own HDB flats and their necessary family members who live in the units are required to sell their HDB flats within six months of purchasing a finished or off-plan private residential property in Singapore, even if they have satisfied the MOP.

The privilege of simultaneously owning an HDB apartment and a private condominium is only available to Singaporeans. However, before they are permitted to acquire privately owned residential property, they must still abide by the MOP. Additionally, they are unable to go in the other manner by first purchasing private property before purchasing an HDB apartment since they must sell the private property after finalizing their HDB apartment purchase.

However, due to the high costs required, not many Singaporeans can afford to purchase a private home while still owning an HDB unit.

3) Buyer’s Stamp Duty (BSD)

Buyer’s Stamp Duty (BSD), which applies to both foreigners and Singapore citizens alike, must be paid when purchasing a home in Singapore.

Dependent on which is higher between the purchase price specified in the document to be stamped and the property’s market value, this tax will be calculated.

If you received a financial reduction from the selling price, the BSD will be adjusted to account for it, so long as the net price still reflects the property’s true market worth.

4) Additional Buyer’s Stamp Duty (ABSD)

The government first enacted the Additional Buyer’s Stamp Duty (ABSD) on December 8, 2011, in an effort to control the increasing demand for real estate investments among Singaporeans and overseas purchasers. Another justification for its implementation is to preserve local residents’ access to affordable housing and to allow property prices to rise steadily in line with underlying economic trends.

5) Total Debt Servicing Ratio (TDSR)

To stop house purchasers from taking out excessive amounts of debt to finance their purchase of a property, the Monetary Authority of Singapore developed the Total Debt Servicing Ratio (TDSR) framework. All residential mortgages given by all financial institutions in the city-state, including banks, moneylenders, insurance companies, and others, are subject to the regulations.

Homebuyers are only permitted to borrow up to 60% of their gross monthly income under the TDSR system. The limit also considers all of your existing obligations, including credit card debt, personal loans, vehicle loans, and school loan amounts. When calculating the amount it may offer you for a house purchase, banks also take into account minor debts like gym dues and monthly payments for equipment.

In general, the sum of your monthly home loan repayments and ALL of your other monthly debt payments cannot be greater than 60% of your monthly income.
For instance, if your monthly wage is $10,000 and you don’t have any obligations, you can spend up to $6,000 per month to pay your home loan’s instalments.

However, you may only borrow up to $4,000 if you wish to purchase a private apartment and you are already spending $2,000 to pay off existing obligations.

6) Loan-to-Value (LTV) Ratio

The government decreased the maximum LTV, or the amount a house buyer may loan depending on a property’s sales price, in addition to raising ABSD rates. In the past, you could loan up to 80% if the loan’s duration didn’t exceed 30 years, or 60% if it did or if the borrower was over 65 years old when it matured.