Can I Afford Executive Condominium

Can I afford?

Please take note HDB does not provide housing loan to Executive Condominium (EC) buyers. EC buyers need to obtain loan from banks or financial institutions.

You are eligible to loan 75% if you are 1st timer or you are still servicing your existing loan. In order to ascertain if you are eligible to get 75% loan, you need to be aware of MSR or Mortgage Servicing Ratio that is peg to 30% of your combined total income. This only applies to purchasing of new EC.

For 75% loan amount, the balance 25% payment is a combination of cash and/or funds from CPF. As per MAS regulation, the 5% of the 25% payment must be in the form of cash only. The balance 20% can be in the form of cash and/or CPF.

You are not subject to ABSD (Additional Buyer Stamp Duty) even though this is your 2nd property. This also only applies to purchasing of new EC.

Example:
A young couple of age 35 years old, with a combined earning income of $9,000 per month.
The estimated bank loan is $600,000 for a 30 years loan tenure.

If they are First Timer, they can apply for a $30,000 CPF grant^ which can be used in the budget calculation.

Assuming they are buying a 3-Bedroom EC pricing $750,000 they can get up to 75% bank loan i.e. $562,000.

Whatever is in the Ordinary Account of their CPF, they can take out to use for the Exercise fee (15%), together with the $30,000 CPF grant.

Booking fee 5% = $37,500 (cash)
Exercise fee 15% = $112,500 (CPF and/or cash)
Stamp Duty = $17,100 (CPF / cash)

The rest of the Progressive Payment is via Bank Loan’s monthly installment which can be paid using CPF.

Below is an estimated monthly installment from construction to completion, based on 1.7% interest and $600,000 loan.

Payment Stages
1) Completion of foundation (10%) - $241.22
2) Completion of reinforced concrete frame work of unit (10%) - $482.43
3) Completion of partition walls of unit (5%) - $603.04
4)Completion of roofing/ceiling of unit (5%) - $723.65
5) Completion of door sub-frames/door frames, window frames, electrical wiring, internal plastering and plumbing of unit (5%) - $844.25
6) Completion of car park roads and drains serving the housing projects (5%) - $964.86
7) Temporary Occupation Permit or Certificate of Statutory Completion (25%) - $1,567.90
8) On completion date (15%) - $1,929.72

^ If you qualify for CPF Housing Grant, the funds in the form of CPF monies can be used.

We can also assist you to determine if you are qualified for CPF Housing Grant. If both you and your spouse qualifies, you will stand to gain an amount of up to S$30,000 for the purchase of your EC.

Housing Grant

Income Ceiling
Average gross monthly income of all working persons, i.e. applicants and occupiers.

Half-Housing Grant
If you are a first-timer (FT) SC and your co-applicant is a second-timer (ST) who has previously taken 1 housing subsidy, i.e. FT/ ST couple.

Income Ceiling
$10,000 or lower - Family Grant $30,000 (SC/SC Household) $20,000 (SC/SPR Household)
Half Housing Grant - $15,000

$10,001 to $11,000 - Family Grant $20,000 (SC/SC Household) $10,000 (SC/SPR Household)
Half Housing Grant - $10,000

$11,001 to $12,000 - Family Grant $10,000 (SC/SC Household) Nil (SC/SPR Household)
Half Housing Grant - $5,000

$12,001 to $14,000 - Nil

Resale Levy

Resale Levy, according to HDB, is meant to reduce the subsidy on the second subsidized flat so as to maintain a fair allocation of public housing subsidies between first and second-timer citizen families.

When buying an EC, if you are a HDB “second-timer”, there is a resale levy that you need to pay if the EC land sale was on or after 9 December 2013. But, if the EC land sale is before 9 December 2013, the EC buyer need not pay resale levy. This can potentially save the EC Buyer of up to S$50,000.

Half-resale levy for Singles Grant recipients
If you are Singles Grant recipient, you only need to pay half the resale levy amount when you subsequently form a family and buy/ take over ownership of a second subsidised flat.

Situations in which a resale levy is payable
You need to pay a resale levy in either of these cases:
1) You sell your subsidised flat after meeting the Minimum Occupation Period (MOP), and then buy a second subsidised flat from HDB or take over ownership of a subsidised HDB flat
2) You sell your subsidised flat after meeting the MOP, and then buy an EC from a developer where the land sale was launched on or after 9 December 2013, including those where tenders were not closed, i.e. Westwood Avenue, Canberra Drive and Anchorvale Crescent.

You need not pay a resale levy if you are buying any of these:
1) Design, Build and Sell Scheme (DBSS) flat from a developer
2) EC from a developer; where the land sale was launched before 9 December 2013
3) HDB resale flat
4) Private residential property

Resale levy amount: first subsidised flat sold on or after 3 March 2006
This fixed resale levy amount gives greater certainty for financial planning, be it for upgrading to a larger flat, or right-sizing to a smaller flat.

Resale levy amount
1st Subsidised 
2-room Household Grant $15,000 Single Grant $7,500
3-room Household Grant $30,000 Single Grant $15,000
4-room Household Grant $40,000 Single Grant $20,000
5-room Household Grant $45,000 Single Grant $22,500
Executive Household Grant $50,000 Single Grant $25,000

Resale levy amount: first subsidised flat sold before 3 March 2006
For cases where the first subsidised flat was sold before 3 March 2006, a graded resale levy applies.

Resale levy amount
​​Based on resale price of the sold flat, or 90% of its market valuation, whichever was higher

1st Subsidised
2-room Household Grant 10%* or 15% Singles Grant 5%* or 7.50%
3-room Household Grant 20% Singles Grant 10%
4-room Household Grant 22.50% Singles Grant 11.25%
5-room & Executive Household Grant 25% Singles Grant 12.50%

*Only applicable to 2-room flat sellers that upgrade to a larger flat type.

If the graded resale levy was not paid when you sold the first subsidised flat, i.e. you opted to defer the payment until you purchase/ take over another HDB flat, interest at a prevailing rate of 5% per annum is charged.

Waiver of Interest for Elderly
If you have sold your first subsidised flat before 3 March 2006 and right-size to a new 2-room or 3-room flat from November 2015 sales launch onwards, you will pay only the percentage resale levy, with the interest waived, if you and your spouse are aged 55 and above at the point of the new flat application. The resale levy payable is subject to a minimum payment of $15,000 for 2-room, $30,000 for 3-room, $40,000 for 4-room, $45,000 for 5-room, and $50,000 for Executive flat. These amounts are the resale levy payable by second-timers who sold their first subsidised flat on or after 3 March 2006.

Paying the resale levy
The resale levy payable is determined at the point you book your second subsidised flat. It applies regardless of ownership type (joint-tenancy or tenancy-in-common) or shared interest in the flat.

Payment can only be made by way of your flat sale proceeds and/ or cash. HDB mortgage financing will not be extended to the payment of a resale levy.

When and how payment is made

First subsidised flat sold after taking possession of the second subsidised flat
1) Resale levy deducted from the sale proceeds upon the sale of the first subsidised flat
2) Any shortfall to be paid in cash

First subsidised flat sold before taking possession of the second subsidised flat
Resale levy paid in cash upon taking possession of the second subsidised flat

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