Guide to Buying Executive Condominium

· Buying A Property

Executive Condominiums (EC) are a hybrid housing type that are built and sold by private developers but have eligibility conditions for purchase and sale, similar to HDB flats.

Pre-purchase checks

Buyers and essential occupiers who currently own the following types of properties will need to fulfill a 5-year Minimum Occupation Period (MOP):

- starting from date of key collection for flats bought directly from HDB

- starting from date of resale completion or date of transfer for HDB resale flat

- starting from date of key collection for DBSS flats bought from developers

Buyers and essential occupiers who currently own an Executive Condominium bought from a developer will need to:

- fulfill a 5-year MOP starting from the date of key collection

- wait a 30-month period from the date of disposal of the existing EC

before they can apply for a new EC or be listed as an essential occupier.

Buyers and essential occupiers must not own or have disposed of any HUDC flats or private residential properties within the 30 months before the date of application for a new EC. In other words, if you own a private home, you must sell it and wait 30 months before you can apply for a new EC.

Prior ownership of residential property

Persons who have bought or owned two of the following types of properties will not be eligible to apply for a new EC or be listed as an essential occupier in an application

- Flat bought directly from HDB

- EC/DBSS flat bought from developer

- HDB resale flat bought using CPF housing grant

Eligibility

Buyer must be a Singapore citizen at least 21 years old applying with at least one other applicant that is at least 21 years old and either a Singapore citizen or Singapore permanent resident

All applicant must be Singapore citizens if applying under Joint Singles Scheme

Gross household income must not exceed $14,000

Buyers must qualify under one of the following schemes:

Public Scheme

Form family nucleus with any of the following

- Spouse

- Parents

- Children under legal custody, care and control (for widowed or divorced applicants)

Fiancé/fiancée scheme

Form family nucleus with fiancé/fiancée

- Must produce Marriage Certificate to developer within 3 months from taking possession of the EC unit

- Must produce Marriage Certificate to developer before taking possession of the EC unit for buyers taking CPF housing grant

Orphans scheme

- Form family nucleus with any of the following

- Unmarried siblings

- At least one of the deceased parents was Singapore citizen or Singapore permanent resident.

- All unmarried siblings must be listed in the same application. Siblings cannot qualify under separate Orphans schemes.

- Another single unrelated orphan

Joint singles scheme

- Form family nucleus with another single

- Both singles must be at least 35 years old

- Not eligible for CPF housing grant for singles

Buyers of dual-key EC units must form a multi-generation family comprising one of the following:

- Married couple with parents/grandparents

- Fiancé and fiancée couple with parents/grandparents

- Widowed or divorced with children and parents/grandparents

Application and purchase procedure

- Obtain an Approval in Principle (AIP) for a bank loan

This can be done before or after submitting e-Application

An AIP lets you know your eligible loan quantum and the monthly mortgage

Having an AIP before booking prevents the forfeiture of your booking fee should there be hiccups in the process of mortgage approval

- Submit e-Application to developer for eligibility check

e-Application will be processed and developer will issue ballot number to eligible buyers

- Visit show flat and select your unit

Buyers can back out of the purchase at any point up to this without suffering any financial penalty

- Booking of unit

Pay 5% booking fee in exchange for Option to Purchase (OTP)

The developer will deliver the Sales and Purchase Agreement (S&P) within 2 weeks to your address or your lawyer

Option to Purchase is valid for 3 weeks from delivery of S&P

- Check for and pay Resale Levy

Buyers who have received a CPF housing grant or previously bought one of the following properties then sold it, and then buys an EC from a developer where the land sale tender was not launched or closed on or before 9 December 2013 will have to pay resale levy

- new flat from HDB

- Design, Build and Sell Scheme flat

- EC from a developer

Buyers who buy an EC from a developer where the land sale was launched or closed on or before 9 December 2013 will not need to pay a resale levy

The resale levy payable is dependent on the flat-type of the property previously owned and the date it was sold

- Submit OTP to bank

- Receive Letter of Offer (LO)

The LO is a contract stating the terms of the loan offered by the bank to the borrower

- Sign Letter of Offer (LO)

This forms a binding contract between the bank and the borrower

- Sign and send S&P to the developer, and pay the balance down payment of 20% of purchase price, less booking fee paid

The developer may allow buyers to pay the balance down payment within 8 weeks of the Option date

If Option is not exercised, 25% of the booking fee will be forfeited with the remaining 75% refunded to buyer

- Pay Stamp Duty within 2 weeks of signing S&P

The Buyer’s Stamp Duty (BSD) is computed based on the purchase price or market value of the property, whichever is higher

Buyer needs to pay BSD of 1% on the first $180,000, 2% on the next $180,000 and 3% on the remaining amount of the purchase price

- Bank makes loan disbursement to developer according to schedule of payment

The bank will send a Loan Disbursement Advice and notice to start monthly repayment

- Start monthly repayment for your home loan

Schedule of payment

The purchase price will be paid in installments according to the Standard Payment Scheme

Notice of progress payments must be supported by the architect’s Certificate of Stage Completion

Expected TOP and Vacant Possession Date

The developer may provide an estimated Temporary Occupation Permit (TOP) date. The actual TOP date may vary depending on construction progress

The developer is contractually bound to deliver Vacant Possession of the property by the date stated in the OTP and S&P. Failing which, the developer has to pay liquidated damages to the buyer

BOOK A FREE APPRAISAL

We would love to help you get the most out of your property.

Should you be thinking of selling, or would simply like an update of where your property sits in today's market, book a non-obligatory discussion with one of our TemasekClass consultants.

 

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