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RES Course

Competency Unit 4B - HDB

Sale of HDB

  • Seller submit Intent to Sell
    • Wait for 7 days cooling period
    • 12m validity
  • Buyer apply HDB Flat Eligibility (HFE) letter
    • Eligibility for New/Resale, CPF Housing Grants, HDB Loan
    • Consider 12m income, ending 2m ago
    • Must be working
    • 6m validity
  • Buyer must comply with
    • Ethnic Integration Policy
    • SPR Quota Policy
      • Max non-Malaysian PR, neighbourhood 5% and block 8%
    • SPR need status > 3y
    • If sell private
      • Wait out 15m if w/o CPF Housing Grant
        • 30m if with grant
      • Exception for > 55yo moving to 4rm
  • OTP (read below)
  • Using CPF, must Request for Value
  • Extension of stay up to 3 months
  • Sale Proceeds
    • Pay bank outstanding first
    • Then CPF to return plus accrued interest, housing grant
      • If not enough, no need topup shortfall
  • Resale inspection: check for unauthorized
    • Must fix before completion

OTP

  • Only HDB prescribed OTP
  • Deposit max $5k, the norm:
    • Option Fee $1k (max $1k)
    • Option Exercise Fee $4k
    • Min $1 to be valid
  • Buyer pay option fee in cheque
  • Option expire 3 weeks, 4pm
  • During which can apply bank’s Letter of Offer
  • To exercise, buyer has to sign the Acceptance, deliver, pay in cheque to seller
    • Seller can authorize agency/law firm to receive
    • Agents/lawyers cannot receive cash, so must be cheque
    • Agent can be witness

Use of CPF

  • Lease > 20y
  • Can use max OA
    • If can cover until youngest buyer 95yo
    • If not, pro-rated
  • The most complex of all.. try decipher CPF or their FAQ
    • Formula? (Lease - 20) / (95 - 20 - youngest)

Resale Levy

  • A subsidised flat is:
    • New or
    • Resale with CPF Housing Grant
  • Max 2 subsidised flats
  • A levy on the 2nd purchase, based on the 1st flat type
Based on 1st flat type Households Levy Amount
2-room $15k
3-room $30k
4-room $40k
5-room $45k
Executive Flat $50k
Executive Condo $55k

For singles, the levy is half.

Eligibility

The Schemes:

  • Public: family
    • SC + PR
    • PR + PR (both at least 3y)
  • Fiance
  • Single
    • 35yo
    • New: 2rm flexi
    • Resale: Any
  • Joint Single (up to 4)
  • Non-citizen spouse
  • Non-citizen family
  • Orphans: with siblings

Income Ceiling

  • New:
    • 3rm or smaller: $7k
    • 4rm or bigger: $14k
    • 3Gen: $21k
  • Resale
    • Impact CPF Housing Grant

Grants

All the CPF Housing Grants

  • Both New & Resale:
    • Enhanced CPF Housing Grant (1st timer)
    • Step-Up CPF Housing Grant (2nd timer)
  • Resale only:
    • CPF Housing Grants (1st timer)
    • Proximity Housing Grant (1st & 2nd)
  • For single, half the family grant, half the ceiling
  • If household is SC + PR, there is -$10k (when has citizenship, can apply citizen top-up)
  • Income ceiling applicable for new, while resale only affects the grants

Enhanced CPF Housing Grant

Household Income Family Grant
<= $1.5k $80k
<= $2k $75k
<= $2.5k $70k
<= $8.5k $10k
<= $9k $5k
  • Memorize first row, then every +$500 income, -$5k grant, until $9k no more grant.
  • At least 1 worked for 12m
  • Lease must cover up to 95yo, if not pro-rated

Step-Up CPF Housing Grant

  • Upgrade from 2rm -> 3rm
    • Or Public rental -> 2/3rm
  • Income ceiling $7k
  • At least 1 worked for 12m
  • Grant $15k

CPF Housing Grant (Resale)

HDB 2-4 rm $80k
HDB >= 5 rm $50k
  • Household income ceiling $14k
  • Remaining lease > 20y

CPF Housing Grant (New EC)

EC, <= $10k $30k
EC, <= $11k $20k
EC, <= $12k $10k
  • Household income ceiling $16k

Proximity (Resale only)

Parents < 4km $20k
Live with parents $30k
  • Does NOT consider income ceiling

HDB Loan

  • HDB loan is NOT subsidised housing; It is an entitlement
  • Income ceiling
    • Household $14k
    • Single $7k
  • For 2nd HDB Loan, reduced up to half of cash proceeds
    • Means must use 50% of cash proceeds for 2nd purchase
    • GREATER $25K POLICY
      • Cash proceeds can only keep max($25k, 50%)
    • If want keep all, don’t take HDB loan

HDB Shophouse

  • 1st level commercial
  • 2nd level residential
  • Considered a commercial property, but account for residential portion
    • Can own 1 HDB + 1 Shophouse, but must pay ABSD
  • Pay ABSD for the residential portion only
  • Pay BSD for commercial + residential portions accordingly
  • Foreigners can buy too, but if zoned for residential must approve by LDAU

Standard vs Plus vs Prime

  Standard Plus Prime
Location Islandwide Choicier Choicest
Subsidies Standard More Most
Subsidy Recovery No Yes 6% of resale
MOP 5y 10y 10y
Rent out whole flat After MOP
Wait-out for private 15m 30m 30m

Additional conditions for Plus & Prime resale flat:

  • Household must have SC
  • Income ceiling $14k

2-rm Flexi

  • For more than 55yo
  • Can lease 15-45y, as long as cover until 95yo
  • Income ceiling $14k
  • Previous 2 subsidised housing does not include studio/2-rm flexi/CCA

Community Care Apartments (CCA)

  • Similar to 2-rm Flexi, but:
  • More than 65yo
  • Can lease 15-35y, as long as cover until 95yo
  • Senior friendly

Silver Housing Bonus

  • When selling property (AV < $13k) to buying 3-rm or smaller
  • Topup RA $60k -> Get cash $30k

BTO Balloting

  • 2nd-timer 1 chance
  • 1st timer
    • 2 chances
    • 3 chances if FT(PMC)
      • Has a SC child < 18yo etc
    • +1 for every unsuccessful, after 2 unsuccessful, only for non-mature eg. For 3rd application, +1, 4th +2
  • Non-selection
    • Become “2nd-timer” status, clear all those additional chances
  • Many Priority Schemes
    • Can choose up to 2
    • Set aside quota

Decoupling

Restrictions Against HDB Decoupling From 2016, MMDDFL:

  1. Marriage
  2. Medical Grounds
  3. Death Of An Owner
  4. Divorce
  5. Financial Hardship
  6. Loss Of Citizenship

Rental

  • Tenant pays Stamp Duty, unless stated otherwise
  • Landlord pays Property Tax & Conservancy fees
  • Expense
    • Allowable: Mortgage repayment, property tax, fire insurance, repair, etc

HDB Rental

  • PR or under MOP cannot sublet whole flat, but bedroom OK
  • Non-malaysian Non-citizen (NC) quota for whole flat
    • Max Neighbourhood 8%
    • Max Block 11%
  • Work Permit holders from the construction, marine, and process sectors must be Malaysians
  • Work Permit holders from the manufacturing sector must also be Malaysians, if renting whole flat
  • Min lease 6m
  • Only >= 3rm can rent out bedrooms, and the max number of occupiers (including owners) is the same as sublet whole flat
Sublet Flat Max unrelated occupiers
<= 2rm 4
3rm 6
>= 4rm 8

Private Rental

  • Min lease 3m
Sublet Private Max unrelated tenants
< 90sqm 6
>= 90sqm 8