Explain how ECs and private property differ from HDB flats in eligibility, financing and restrictions.
Write three headings down a page: HDB, EC, private. Next to each, write yes or no for whether you could buy that type of home today, and leave a line under each for one restriction. Eligibility is a simple yes or no for each type of property. The restrictions attached to each type are what shape your choices over the next ten years.
ECs and private homes both sit outside the HDB rules you met in lessons 1.1 and 1.2, but in different ways. An EC follows many HDB rules while looking like a condo. Private property has no HDB rules but comes with stricter rules elsewhere, mostly around cost and loans.
Hakim's colleague bought an EC two years ago. The colleague talks about it often: the pool, the gym, and a price well below the condo next door. When Hakim mentioned it at home, Farah asked what the catch was if an EC is so much cheaper than a condo.
An executive condominium (EC) is built and sold by a private developer and has condo facilities. The government sets who can buy it and what owners can do in the first years, and those limits are the reason an EC costs less than a nearby private condo.
The buyer rules are similar to HDB's. There are citizenship requirements, a family nucleus requirement and an income ceiling. First-timers buying an EC may qualify for a CPF housing grant.
An EC also has a minimum occupation period (MOP), like an HDB flat. During the MOP you must live in the unit, you cannot sell it, and you cannot rent out the whole unit. Once the MOP ends you can sell, but at first only to a limited group of buyers. Later the EC becomes fully private and can be sold to anyone, including foreigners. The current eligibility rules, the income ceiling and the time periods are on the HDB website, and they have changed before, so check them there and don't rely on what you've heard.
An EC is financed differently from an HDB flat. HDB does not lend for ECs, so you need a bank loan. A new EC bought from the developer is still subject to the Mortgage Servicing Ratio (MSR), the cap on instalments that also applies to HDB flats. It is also subject to the Total Debt Servicing Ratio (TDSR), which applies to all bank property loans. Module 4 explains both, and Lesson 4.2, "MSR: the cap on instalments for HDB flats and ECs", works out the MSR.
Private condos and landed homes have no HDB eligibility rules. You don't need a family nucleus, there is no income ceiling, and singles can buy at any age. Permanent residents and foreigners can buy private condos, but landed homes are restricted for foreigners.
With private property, cost takes the place of the HDB rules. Additional Buyer's Stamp Duty (ABSD) can be large if you already own a home or are not a citizen. Lesson 3.2, "ABSD: who pays it and when it comes back", sets out who pays it. Bank loans for private property have their own loan-to-value (LTV) limits and a minimum cash downpayment, which Lesson 4.1, "LTV limits and the cash you must put in", covers. Seller's Stamp Duty (SSD) can apply when you sell within a holding period, and Lesson 3.3 covers it.
Most private condos are on 99-year leases, like HDB flats, and some are freehold. Monthly maintenance fees for a private condo are usually much higher than HDB service and conservancy charges. Lesson 7.1, "Property tax, fees and upkeep", adds these fees to your yearly cost.
Many couples plan to keep their HDB flat and buy a condo later, and HDB restricts this. You cannot buy private property while your HDB flat is still within its MOP. After the MOP you may be able to own both an HDB flat and a private home, but buying a second home brings ABSD. If you sell the flat within a set period to claim the ABSD back, that has its own conditions.
The restriction also applies in the other direction. People who own private property, or sold one recently, may have to wait before they can buy certain HDB flats.
These rules change with cooling measures, and planning from a friend's experience three years ago is how people get caught out. Check the current HDB and URA rules before you plan to own both types of home or to move from one to the other.
Farah and Hakim (an invented example) are both Singapore citizens, married, and buying their first home. Their household income is below the ceilings they checked on the HDB website. All four options are open to them: HDB BTO, HDB resale, EC and private condo. Each comes with different restrictions:
HDB BTO or resale: eligible, with possible grants. Restriction: the MOP, and the rule against buying private property during it. EC: eligible while their income stays under the EC ceiling. Restriction: the MOP and the need for a bank loan. Private condo: eligible, and as citizens they pay no ABSD on a first home under the current rules. Restriction: the minimum cash downpayment and higher monthly fees.
They dropped the EC after seeing the launch timeline, which meant the same years of waiting as a BTO flat at a higher price, and kept the private condo on their list as a later move.
Your list may look different from theirs. Citizen first-time buyers pay no ABSD on a first private home under the current rules. A permanent resident couple faces different HDB rules and different stamp duty. A single buyer under the HDB age limit may find that private property is the only route open today.
Treat your answers as a first pass, and write down one restriction per type to start with. Module 2 checks your HDB eligibility properly using HDB's own process. For now, go back to the page you started and write which of HDB, EC and private you can buy today, and one restriction attached to each.
Write down which of HDB, EC and private you can buy today, and one restriction that would apply to each.
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