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The Ultimate Guide to the Purchase of Executive Condominiums (ECs) – 12 Aug 2015

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Sea Horizon Executive Condominium

Homer thinking about buying an executive condominium

Before you buy an Executive Condominium (EC), you need to know if you are eligible to apply and the terms and conditions that apply to you.

If you have further questions after reading this ultimate guide, just drop us a message in the text box below or call us at 93366835.

 

PHASE 1 : ELIGIBILITY

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1st  –  CITIZENSHIP

  • As the APPLICANT, You MUST be a Singapore Citizen

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2nd  –  AGE

  • You must be at least 21 years old at the time of application.
  • If you are buying an Executive Condominium (EC) under the Joint Singles Scheme, you must be at least 35 years old

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3rd  –  RECOGNISED FAMILY NUCLEUS

Type of Scheme Family Nucleus Requirement

Public

You (Singapore Citizen), the applicant

+

Your spouse, and children (if any); or

Your parents, and siblings (if any); or

Your children under your legal custody, care and control (for widowed/ divorced)

Take Note! Your family nucleus MUST comprise at least another Singapore Citizen or Singapore Permanent Resident

Fiancé/Fiancée

If you have received the CPF Housing Grant, you will be required to produce your marriage certificate to the Developer for inspection before you take possession of the EC unit

If you DID NOT receive the CPF Housing Grant, you only need to produce your marriage certificate to the Developer for inspection 3 months after you have taken possession of the EC unit.

(The differentiation just means that if you did not receive the CPF Housing Grant, you can do your ROM later)

If your fiance/fiancee is below 21 years of age, he/she can only be listed as an occupier in your EC application

If your fiance/fiancée’s age is between 18 and 21, a written consent from the parents or guardians must be submitted with the EC application.

You (Singapore Citizen), the applicant

+

Fiancé/fiancée (Singapore Citizen or PR)

Orphan

It means BOTH of your parents have passed away

 You, a single orphan applicant and ALL your UNMARRIED siblings are to be listed in the same application.

 AT LEAST one of your deceased parents was Singapore Citizen (SC) or Singapore Permanent Resident (SPR).

Siblings are NOT allowed to buy or rent flats under the Orphans Scheme separately.

You (Singapore Citizen), the applicant

+

Your unmarried siblings, or

Another single unrelated orphan

Take Note! All orphans must be unmarried Singapore Citizens

JOINT SINGLES

Both of you must be Singapore Citizens and at least 35 years of age at the time of application. Both can be siblings as long as they are single.

 You CANNOT apply for the CPF Housing Grant Scheme for Singles

Take Note! Both must apply jointly as co-applicants

You can buy a dual-key EC units offered by the developer ONLY if you form a multi-generation family as follows:

(i) Married couple with parents/grandparents
(ii) Fiancé and fiancée couple with parents/grandparents
(iii) Widowed/divorced with children and parents/grandparents

Don’t chuck your parents or grandparents away. They are good to have around. And not just to apply to buy Dual Key Executive Condominiums (ECs).

 

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4th  –  INCOME CEILING

  • Your average gross monthly household income CANNOT exceed $14,000. This means EVERYBODY listed in the application, including the applicant/s and the occupiers
 
Employment Status How your income is assessed
Employed Person
Based on average monthly gross income over 3 months (excluding Over Time income) without deducting employee CPF contributions

  • Includes allowances (fixed/variable) received on a regular basis (e.g. transport, food, laundry, uniform, etc).

Documents to submit:

  • Latest 3 months’ payslips i.e. month of application and preceding 2 months; OR
  • Letter from employer (with company stamp/letterhead, name, signature and designation of certifying officer)certifying salaries for the month of application and the preceding 2 months

NOTE:

  • Notice of Assessment(NOA) from Inland Revenue Authority of Singapore (IRAS) is NOT acceptable for employed persons

Bonuses are EXCLUDED from the assessment

Self-employed Persons
Based on average monthly gross income over 12 months
Documents to submit:

Work Part Time
Based on average monthly gross income for the past 12 months
Documents to submit:

  • Latest 12 months’ payslips; or
  • Letter from employer (with company stamp/letterhead, name, signature and designation of certifying officer)certifying salaries for the last 12 months
Commission-Based
Based on the average monthly gross income for the past 12 months
Documents to submit:

  • Latest 12 months’ commission statements/payslips; or
  • Letter from employer (with company stamp/letterhead, name, signature and designation of certifying officer) certifying salaries for the last 12 months
ODD JOB
Based on the average monthly gross income for the past 12 months
Documents to submit:

  • Latest NOA + Previous years NOA from IRAS
Unemployed
Proof of unemployment

  • Statutory Declaration* to declare the employment status or
  • Valid Student Pass

*Note:

  • Applicable to applicants and occupiers between 18 and 62 years old who are unemployed.
  • If the applicants and occupiers are unemployed for less than 3 months, the average income will be computed based on the number of actual months he/she has worked.
  • Example, instead of a 12 months average, you might be assessed based on a 10 months average.
  • Statutory Declaration may be executed at the Sales Office at HDB Hub or any HDB Branches. If you are not in Singapore, you can make the Statutory Declaration in the presence of a Commissioner for Oaths or Notary Public in the country of your stay.

 

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5th  –  CRITERIA ABOUT CURRENT & HISTORY OF PROPERTY OWNERSHIP

5.1 You, your spouse, any occupiers listed in the Application Form or their spouses CANNOT own or dispose or have an estate or interest in any other flat, house, building or land*

  • Within 30 months before the date of application, and
  • Between the application date and the date of taking possession of the EC

* includes but not limited to:

  • HUDC flats (Privatised and Non-Privatised)
  • Properties acquired by gift
  • Properties inherited as beneficiaries under a will or as a result of the Intestate Succession Act
  • Private properties
  • Properties owned/acquired/disposed through nominees regardless of properties location

5.2 You CANNOT have bought any of the following types of housing unit below TWICE in any combination.

  • A new flat direct from HDB;
  • a resale flat with the CPF Housing Grant*;
  • a DBSS flat from developer;
  • an EC unit from developer.

 If you have bought any of the above types of housing unit twice, you CANNOT apply or be an essential occupier in an application. If you’re getting confused, an essential occupier is a family member who is required to be listed in the Application Form in order to form a family nucleus and qualify under an eligibility scheme to purchase a flat.

5.3 Do you have an Existing Owner or Ex-Owner in your application?

Are you, your spouse or any of the essential occupiers listed in the application an existing owner or ex-owner of a:

  • Flat bought directly from HDB
  • DBSS flat bought from the developers
  • Resale flat bought under the CPF Housing Grant Scheme

If you belong to any of the above categories, you may apply to buy an EC IF a 5-year period (excluding any period of subletting of the whole flat) has lapsed from the *date of taking possession of the flat to the date of application for a new EC

* The date of taking possession refers to following dates (whichever is applicable):

  • Date of key collection, for flats that are bought direct from HDB
  • Date of resale completion, for purchase of resale flats from the open market bought with the CPF Housing Grant
  • Date of transfer at market value of the flat bought with CPF Housing Grant
  • Date of key collection for EC/DBSS flats bought from the developer

5.4 Are you, your spouse or any of the essential occupiers listed in the application an ex-owner of an Executive Condominium bought directly from the developer?

If yes, you would need to meet a 5-year period from the date of taking possession of the earlier Executive Condominium.You need to wait out a 30-month period from the effective date of disposal (i.e., date of legal completion of the sale of their Executive Condominium, evidenced by the Notice of Transfer or such other documentary evidence as HDB may require) of the Executive Condominium before you can apply to buy another Executive Condominium directly from the developer.

5.5 Are you or any person listed in the application currently listed as an essential occupier of:

  • An existing HDB flat bought directly from HDB,
  • A DBSS flat bought under the CPF Housing Grant Scheme, or,
  • A resale flat bought under the CPF Housing Grant Scheme

If yes, the essential occupier may apply or be included in an application only if he has stayed in the existing flat for 5 years from the *date of taking possession of the existing flat to the date of application for an EC.

* The date of taking possession refers to:

  • The date of key collection, for flats that are bought directly from HDB
  • The date of resale completion, for purchase of resale flats from the open market bought with the CPF Housing Grant
  • The date of transfer at market value of the flat bought with CPF Housing Grant
  • The date of key collection for Executive Condominium/DBSS flats bought from the developer, whichever is applicable.

 

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6th  –  Additional Questions for Uncommon Scenarios

6.1 Have you recently cancelled an application after Booking a Flat?

If you had booked a flat from the March 2012 Build-To-Order and Sale of Balance Flats Exercises onwards and subsequently cancel the flat booking, you are BARRED from applying or be included as an essential occupier in an application for a new Executive Condominium unit   for 1-yearfrom the date of cancellation.

6.2 Are you recently divorced?

Within 3 years from the date of the divorce, only 1 party in the divorce can own one of the following housing units:

  • a flat bought directly from the HDB
  • a DBSS flat / EC bought directly from a private developer
  • a resale flat bought from open market under the CPF Housing Grant Scheme

If you have an existing matrimonial home, which is one of the above, and that home is retained by your ex-spouse, you may apply to buy or be listed as an essential occupier in any of the above housing unit 3 years after your date of divorce. Don’t misunderstand that you can apply as a single. You still need to fall in line under one of the eligibility scheme; i.e Public, Joint Single etc

Take note: This 3-year wait out period WILL NOT apply if you are buying any of the above homes i.e EC with your parents or a new spouse.

If there is no matrimonial home or the matrimonial home was bought from the open market without any CPF Housing Grant, you may apply for an EC if you are buying the EC with your parents or a new spouse. The requirement for your ex-spouse’s consent is waived.

The requirement to seek ex-spouse’s consent during the three-year period from the date of divorce is also waived if you meet the following conditions:

  • All your children are below 18 years old at the date of divorce; and
  • You have the legal custody of all your children and are also the only parent with the care and control of all your children.

6.3 Have you bought an EC/DBSS flat with CPF housing grant and terminated the sales and purchase agreement?

If yes, you can apply to buy an EC if a 5 year period has lapsed from the termination date of the Sale & Purchase Agreement of your earlier EC or DBSS flat purchase, to the date of application date for an EC.

 

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After going through the above 8 questions/criteria, Do you still qualify to Apply? If so, let’s go on the Next Phase !

homer thinks he qualifies for his executive condominium

After going through the ALL the criteria above, do you qualify to apply for an Executive Condominium (EC)? If so, CONGRATULATIONS! Let’s move on to the Next Phase!

If not, just drop us a mail or contact us at 93366835 and we can explore solutions or other viable alternatives.

PHASE 2 : BUDGETING AND LOAN FINANCING

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First, determine your maximum loan amount

Saving up for an executive condominium
To determine how much loan you can take, get an In-Principal Approval (IPA) from the bank. The bank mortgage specialist will ask you a series of questions about your income and debt obligations to determine your income.

Be truthful and comprehensive so that when the actual loan is secured after you have booked your EC unit, the amount does not differ from the indicative amount of the IPA. We have mortgage specialist partners that can do the IPA for you. It’s free.

Just drop us a message in the text box below or give a call at 93366835 so they can get in touch with you and get it calculated rightaway.

 

Your Maximum Loan Amount for Executive Condominiums is determined by the Mortgage Servicing Ratio (MSR) & the Total Debt Servicing Ratio (TDSR)

1) Mortgage Servicing Ratio (MSR)

The MSR measures the percentage of your income that would go toward repaying your home loan monthly. It’s currently at 30%

So given the maximum household income ceiling of $14,000 (assuming zero debt obligation), the Mortgage Servicing Amount is $4,200. Using 3.5% as required by MAS and assuming a loan tenure of 30 years, the maximum loan is about $935,000.

Your Cash and CPF outlay would be = (Stamp Duty + Property Price + Legal Fees and Miscellaneous – $935,000)

2) Total Debt Servicing Ratio (TDSR)

The TDSR limits the amount of money banks can lend you – which is 60% of your gross monthly income minus all your outstanding debts. It is more generous than the MSR, so if you pass the MSR, you will surely pass the TDSR.

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PHASE 3 : DETERMINE WHAT PERKS YOU CAN ENJOY

In a push to promote proper family structures, the Singapore government gives CPF Housing grants to FIRST TIME APPLICANTS who form family structures that it considers proper. The amount of grants depends on your household income.  A note of empathic apology to joint singles who qualify to buy an Executive Condominium (EC). You do not qualify for the extra CPF Housing grants.

TO BE CONSIDERED AS FIRST TIME APPLICANTS,

You AND the essential family members listed in the application for purchase of the flat

  • CANNOT: Be the owners of a flat bought direct from HDB, a DBSS flat or an Executive Condominium bought from the developer
  • CANNOT: Have sold a flat bought direct from HDB, a DBSS flat or an Executive Condominium bought from the developer
  • CANNOT: Have received the CPF Housing Grant for the purchase of an HDB resale flat
  • CANNOT: Have transferred at market value a flat bought from HDB or a resale HDB flat bought under the CPF Housing grant scheme
  • CANNOT: Have taken other forms of housing subsidy (for example, benefitted under the Selective En bloc Redevelopment Scheme, privatisation of HUDC estate etc)

You can apply for a CPF Housing Grant. Only once. The table below shows you how much you can get. This is optional. You might not want to apply for a CPF Housing Grant even if you qualify for it.

CPF Housing Grant Aug 2015

 Half Housing Grant applies when you are a first-timer citizen and your spouse has previously taken a housing subsidy.

The Grant is given ONLY to Singapore Citizen (not SPR spouse).

The CPF Housing Grant will be credited into the applicant/s’ respective CPF ordinary account and be treated as part of CPF Funds and can be used to pay for the CPF portion of the downpayment at the time of signing of the S&P Agreement or reduce the mortgage loan. The CPF Housing Grant will also be included in the computation of the CPF withdrawal limit.

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PHASE 4 : DETERMINE IF YOU HAVE TO PAY A RESALE LEVY

 

Homer thinking hard about his executive condominium

IF YOU ARE A SECOND TIME APPLICANT, YOU MAY HAVE TO PAY A RESALE LEVY, DEPENDING ON THE EC PROJECT YOU BUY.

FIRST, TO BE CONSIDERED AS 2nd TIME APPLICANTS,
You OR the essential family members listed in your application have owned/sold or are currently owners (whether through transfer or purchase) of:

  • Any HDB flat that was bought from HDB, or
  • Any resale flat that was bought under the CPF Housing Grant Scheme, or
  • A DBSS flat or an EC bought from the developer, or
  • Have enjoyed other forms of housing subsidy (for example, enjoyed benefits under the Selective En bloc Redevelopment Scheme, privatisation of HUDC estate etc.)

WHICH EC PROJECT ATTRACTS RESALE LEVY FOR 2nd TIME APPLICANTS?

New EC projects from Westwood Avenue onwards will have to pay a resale levy. Currently, they are

Westwood Residences
The Vales
THE BROWNSTONE
SOL ACRES
 

EC units in projects that were launched before 9 Dec 2013 are exempted from resale levy. Some examples are

1 Canberra
Heron Bay
WATERBAY
Citylife@Tampines
The Topiary
FORESTVILLE
Twin Fountains
ECOPOLITAN
Lush Acres
Sea Horizon
WATERWOODS
SkyPark Residences
BELLEWOODS
Lake Life
BELLEWATERS
The Terrace
The Amore
And More

 

To check out available ECs on Empower-Property Website, click here

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PHASE 5 : HoW MUCH RESALE LEVY MUST YOU PAY?

*Status of ownership or date which subsidised flat was sold
When to pay
How & where to pay
An indication of how much to pay
#Own an existing subsidised flat at the point of signing the EC Sale and Purchase Agreement. Upon the sale of the subsidised flat, after signing the EC Sale and Purchase Agreement. Resale levy will be deducted from the cash proceeds upon completion of the resale transaction. Any shortfall will have to be made good in cash
First Subsidised Flat Type  Resale Levy Payable
2-room $15,000
3-room $30,000
4-room $40,000
5-room $45,000
Executive Flat $50,000
^Sold subsidised flat before 19 May 1997 Before the EC buyers sign the EC Sale and Purchase Agreement Developer will collect Cashier’s Order (in favour of “HDB”) from the EC buyers and forward it to HDB as payment for premium. 20% of EC purchase price
^Sold subsidised flat between 19 May 1997 to 2 Mar 2006 Developer will collect Cashier’s Order (in favour of “HDB”) from the EC buyers and forward it to HDB as payment for premium.
Flat Type Resale Levy payable
2-room 10%
3-room 20%
4-room 22.5%
5-room & Executive 25%
^Sold subsidised flat on or after 3 Mar 2006 and before signing the EC Sale and Purchase Agreement Payment to the HDB branch by Cash or Cashier’s Order only. (No personal cheque or CPF money to be used for payment of resale levy)
First Subsidised Flat Type Resale Levy Payable
2-room $15,000
3-room $30,000
4-room $40,000
5-room $45,000
Executive Flat $50,000
Previously ^sold an EC unit which was bought from a developer and have waited out 30 months as at the point of current EC application. Revised resale levy amount of $55,000

# Refers to EC buyers who are still owning a subsidised flat (i.e. resale transaction not completed if in the middle or resale) at the point of signing the Sales and Purchase Agreement for the current EC application. ^Sold is defined as completion of the resale transaction.

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PHASE 6 : AFTER YOUR PURCHASE. WHAT TO CONSIDER?

 

  • Sell YOUR current HDB / DBSS flat in the open market

If you currently own an HDB / DBSS flat, you and/or your spouse must dispose of the flat within 6 months from the date of issuance of the Temporary Occupation Permit in respect of the Executive Condominium (EC).

If you intend to apply to purchase an EC where the Temporary Occupation Permit for the EC has been issued, you will be required to dispose of your existing HDB / DBSS flat within 6 months from the date the Developer serves the Notice of Vacant Possession on you.

  • Citizen Top-Up

If you are from an SC/SPR household, you can apply for the 10K Citizen Top-Up when your SPR family member takes up Singapore Citizenship or when you have a SC child. You can apply for this 10K Citizen Top-Up prior to taking possession of the EC. The SC/SPR household can also apply for the Citizen Top-Up for their existing EC, provided there is continuous occupation of the flat/EC by the SC owner and SPR co-owner/essential occupier. If you sell your EC, you will not be eligible for the top-up.

The Citizen Top-Up of $10,000 will be credited to your/your spouse’s CPF Ordinary Account and can be used for Payment towards mortgage arrears (if any), Lump sum repayment, or Monthly instalments. 

  • SELLING YOUR EC

You must fulfil the Minimum Occupation Period (MOP) of 5 years before you can sell it in the open market.

Essential occupiers in EC must continue to be listed in the application and stay in the EC during the 5-year Minimum Occupation Period (MOP). They cannot make a separate application, or to be listed as occupiers in another application to purchase an HDB flat or another EC within the MOP.

  • RENTING OUT YOUR EC

You cannot rent out the whole EC. But you can rent out bedrooms just by notifying HDB and update HDB when you renew or terminate the subletting of bedrooms, and when there are changes to your subtenants’ particulars.

  • BUYING ANOTHER SUBSIDIZED FLAT 

Once you sell your EC in the open market after having to compulsory fulfil the MOP of 5 years, you must wait for 30 months before you can submit an application to buy:

  1. a new flat from HDB; or
  2. an apartment under the Design, Build and Sell Scheme (DBSS) from developers; or
  3. another EC from developers
  • PAY A RESALE LEVY

You are liable to pay a resale levy of $55,000 when you sell your EC bought WITH the CPF Housing Grant after complying with the MOP, and, after meeting a 30-month waiting period, buy a second subsidised flat from HDB or take over ownership of a subsidised HDB flat or buy an Executive Condominium (EC) from a developer where the land sale was launched on or after 9 Dec 2013.

BUT If you do not intend to buy a second subsidised flat from HDB, for instance, if you are buying a resale flat, a new DBSS flat, an Executive Condominium (EC) from a developer where land sale was launched before 9 Dec 2013 or a private residential property, you DO NOT pay the resale levy.

  •  BUYING OTHER PROPERTIES

You CANNOT buy private residential property during the 5-year minimum occupation period. But you CAN buy non-residential private property such as commercial and industrial property.

 

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 The Simpsons living it up at their executive condominium

To check out available ECs on Empower-Property Website, click here

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To read The Advantage of Buying Executive Condominiums, click here!

To read The Flow of Buying an Executive Condominium (EC), click here!

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