How Can I Own a HDB and Condo at the Same Time in Singapore: 6 Factors to Consider

·12-min read

"Can I buy a condo if I own an HDB flat" and "can an HDB owner buy a condo?", and "can I buy private property if I own an HDB flat?" are some common questions among homeowners and property investors. Primarily, these questions seek to answer if homeowners can own an HDB flat and a condo simultaneously.

With property curbs such as Additional Buyer’s Stamp Duty (ABSD) and Loan-to-Value (LTV) in place, how will these impact HDB flat owners who aspire to purchase a private condo? Let's find out.

Can an HDB Owner Buy a Private Property? Here Are the Key Considerations:

If you're an HDB flat owner and want to buy a private property, you'll need to take into account the following rules and guidelines, in addition to taxes that need to be paid.

1. Minimum Occupancy Period (MOP)

When you purchase a Build-to-Order (BTO) unit directly from the Housing and Development Board (HDB) or a resale HDB flat from the open market, you are required to comply with the 5-year Minimum Occupancy Period (MOP).

Within this period, you are not allowed to:

  • Rent out the entire residential property

  • Dispose of the BTO unit or resale HDB flat via the open market

  • Acquire any private property, either in Singapore or abroad

The MOP starts from the date when you receive the keys to the BTO unit or resale HDB flat. It excludes any period when you did not live in the property, like when the whole property is rented out or when there has been a violation of the MOP. However, please note that you risk paying fines of up to $50,000 or getting the HDB flat compulsorily acquired by the government if you flout the MOP rules.

Notably, the duration of the MOP depends on the purchase mode, unit type and the date when you applied to purchase the flat. For details, please see the table below.

Purchase Mode

MOP Duration

Flat bought directly from HDB (includes BTO)

5 years

Design, Build and Sell Scheme (DBSS) flat bought from a developer

5 years

Executive condominium (EC) bought from a developer

5 years

Flat purchased under the Selective En bloc Redevelopment Scheme (SERS)

5 years from date of occupation OR 7 years from date of flat selection, including wait time and occupation period; whichever is earlier

Flat bought under SERS with Portable SERS Rehousing Benefits

5 years

Resale flat bought from open market with CPF Housing Grant

5 years

1-room resale flat bought from open market without CPF Housing Grant

No MOP

2-room or larger flat bought from open market without CPF Housing Grant

5 years

Source: HDB

Note: When buying ECs for the first time, buyers need to comply with the 5-year MOP. After that, it can be sold to Singapore Citizens and Permanent Residents (PRs). After 10 years EC will be privatised and can be sold to foreigners. Buyers of resale ECs do not have to comply with the MOP rule.

2. Citizenship or Residency Status

If you're a Permanent Resident (PR) wondering, "can I buy a condo and if I own an HDB flat?" the answer is no.

According to the HDB, even if they have fulfilled the MOP, PRs who own an HDB flat and their essential family members who occupy the unit must dispose of their HDB flat within six months of buying a completed or off-plan private residential property in Singapore.

Only Singapore Citizens have the privilege of owning an HDB flat and private condo at the same time. But they still need to comply with the MOP before they are allowed to purchase private residential property. They also can’t do it the other way, which is to buy private housing first then an HDB flat, as they need to sell the private property after completing their purchase of an HDB unit.

However, not many Singapore Citizens are capable of buying a private property while owning an HDB flat due to the large expenses involved.

3. Buyer’s Stamp Duty (BSD)

Whether you’re a Singapore Citizen, PR or foreigner, you will need to pay Buyer's Stamp Duty when you buy a property in Singapore.

This tax will be computed depending on the purchase price stated in the document to be stamped, or the property’s market value, whichever is higher.

If you obtained a monetary discount in the selling price, it will be taken into account when calculating the BSD, provided that the net price still reflects the property’s actual market value.

Please keep in mind that the cash discount must be stated in the instrument to be stamped, otherwise, it won’t be taken into account when calculating the buyer’s stamp duty. Below are the tax rates before and after 20 February 2018.

Purchase Price or Market Value

BSD (residential)

BSD (non-residential)

First $180,000

1%

1%

Next $180,000

2%

2%

Next $640,000

3%

3%

Remaining Amount

4%

Source: Inland Revenue Authority of Singapore

Assuming you purchased a $1 million private condo, you need to pay a Buyer's Stamp Duty of $24,600. Here's the breakdown:

$1,800 (for the first $180,000) + $3,600 (for the next $180,000) + $19,200 (for the next $640,000) = $24,600.

Although this is already a large amount, there is another more expensive stamp duty that you will definitely have to bear if you intend to keep an HDB flat and private condo at the same time.

4. Additional Buyer's Stamp Duty (ABSD)

The Additional Buyer’s Stamp Duty (ABSD) was originally introduced on 8 December 2011 by the authorities to rein in the strong property investment demand by Singapore Citizens and foreign buyers. Another reason for its imposition is to maintain the affordability of residential properties for locals and to let home prices increase sustainably along with economic fundamentals.

Current ABSD Rates

Type of Buyer

ABSD Rates

Singapore Citizens buying 1st residential property

-

Singapore Citizens buying 2nd residential property

12%

Singapore Citizens buying 3rd and subsequent home

15%

Permanent residents buying 1st residential property

5%

Permanent residents buying 2nd and subsequent residential property

15%

Foreigners buying any residential property

20%

Entities buying any residential property

25%

Source: Inland Revenue Authority of Singapore

Given the ABSD rates above, a Singapore Citizen who currently owns an HDB flat, but wants to acquire a private condo costing $1 million needs to fork out an ABSD of $120,000 (12%). If you want to own a third property priced at $1 million, you need to spend another $150,000 (15%). Those are really huge sums compared to the BSD of just $24,600.

5. Total Debt Servicing Ratio (TDSR)

The Monetary Authority of Singapore introduced the Total Debt Servicing Ratio (TDSR) framework to prevent home buyers from loaning too much to finance the purchase of a property. The rules apply to all residential mortgages granted by all financial institutions in the city-state, including by banks, moneylenders, insurance firms and others.

Under the TDSR framework, homebuyers can only loan to up 60% of their gross monthly income. The cap also takes into consideration all outstanding debts you have like car loans, personal loans, credit card balances and student loans. Banks even include small financial obligations such as gym memberships and monthly payments for appliances, when computing the amount it can lend you for a home purchase.

Basically, your monthly housing loan repayments plus ALL of your other monthly financial obligations cannot surpass 60% of your monthly income.

For example, if your monthly salary is $10,000 and you have no existing debts, then you can spend up to $6,000 to service your monthly instalments for a housing loan.

But if you currently spend $2,000 to repay outstanding debts, you can only borrow up to $4,000 if you want to buy a private condo.

6. Loan-to-Value (LTV) Ratio

Aside from higher ABSD rates, the government also reduced the maximum LTV or the amount a home buyer can borrow based on a property’s selling price. Previously, you can borrow up to 80% if the loan term doesn’t exceed 30 years, or 60% if the loan tenure surpasses 30 years or if the maturity happens when the borrower is more than 65 years old.

But according to the latest rules from MAS, you can only borrow up to 75% if the loan term doesn’t exceed 30 years, or 55% if the loan tenure surpasses 30 years or if the maturity happens when the borrower is more than 65 years old. That’s just for the first housing loan.

Rules on LTV Limits and Minimum Cash Downpayment

Outstanding Housing Loans

LTV Limit

Minimum Cash Downpayment

0

75% or 55%*

5% (for LTV of 75%); 10% (for LTV of 55%)

1

45% or 25%*

25%

2 or more

35% or 15%*

25%

*Take the lower LTV limit only if the loan tenure exceeds 30 years (25 years for HDB flats), or the loan period extends beyond the borrower’s age of 65.

If you have a current residential mortgage and want to take out another loan to buy a second property, then the LTV is either 25% or 45%. This means that if you are still currently paying the loan for your HDB flat and you want to buy a private condo costing $1 million, you can only loan up to $250,000 or $450,000. The remainder of $550,000 or $750,000 must be paid through either cash or CPF savings. Ouch.

To give you more detailed calculations of how the above rules and taxes impact you if you really are strongly considering buying a private condo, in addition to your existing HDB flat, we laid out some examples.

What Is the Most Affordable Option?

Let’s assume and Mr A and Mrs B, who are married Singapore Citizens, presently own a five-room HDB flat in Bedok costing $580,000. They have resided there for six years and took out a $475,000 loan with a tenure of 20 years from HDB.

If the happy couple wants to buy a three-bedroom private condo costing $1 million, below is the financial breakdown of such transaction:

Payment Breakdown

Cost

Cash payment (required downpayment of 55%, with given LTV of 45%)

$350,000

CPF payment (required downpayment of 55%, with given LTV of 45%)

$200,000

BSD

$24,600

ABSD

$120,000

Overall Upfront Cost

$694,600

Based on the above table, the total amount the couple needs to spend upfront is nearly $700,000. On top of repaying the first housing loan for the HDB flat, the couple will also have to pay another residential mortgage of up to $450,000.

Although you can tap your CPF savings to pay for the minimum cash component, please bear in mind that you can’t use all of it. You still need to set aside a Basic Retirement Sum​ of $96,000 for members who turned 55 on or after 1 January 2022. ​For more details, please check out the CPF website.

This means you need to have lots of savings if you want to buy a condo, while you are still paying for your HDB loan.

On the other hand, you can get more LTV of 55% or 75% from banks if you finish paying first for the HDB loan. If you take this route, your upfront cost will be significantly lower at nearly $400,000.

Payment Breakdown

Cost

Cash payment (required downpayment of 25%, with given LTV of 75%)

$150,000

CPF payment (required downpayment of 25%, with given LTV of 75%)

$100,000

BSD

$24,600

ABSD

$120,000

Overall Upfront Cost

$394,600

As shown by the above two examples, the best way of purchasing a condo is to finish repaying first your HDB loan, as your initial investment for the private property will be more bearable.

DISCLAIMER: This article should not be construed as financial advice. If you need assistance, kindly consult licensed experts. Alternatively, you can ask our Home Finance Advisors should you need an expert's opinion. PropertyGuru disclaims any damages or claims arising from your use of this article.

Aside from this article, you may also want to browse our resale HDB flats or private condos for sale or rent. If you want to know about future property hotspots in Singapore that will benefit from ambitious government plans, check our AreaInsider guide.

If you need someone to assist you with a property deal, kindly engage a licensed property agent or query them instead via AskGuru.

More FAQs Related to Owning HDB and Condo at the Same Time

Can I Buy a Condo if I Own an HDB?

Only Singaporean citizens can buy a private property while owning an HDB flat. However, you can only after the 5-year Minimum Occupation Period.

Can I Buy an HDB Flat After Selling My Condo?

Yes, Singaporean buyers may buy a resale HDB flat but you have to sell your condo within six months of your HDB flat key collection if you want to avoid ABSD.

Can I Rent Out My HDB and Stay in a Condo?

Yes, you can rent out either one property after the MOP period.

Can I Buy a Condo Before MOP?

No you can't; you can only do so after the 5-year Minimum Occupation Period.

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