“Can I buy a condo if I own an HDB flat”, “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.
Considering the September 2022 property cooling measures, the current high interest rate environment and the new Additional Buyer’s Stamp Duty (ABSD) rates brought on by the April 2023 property cooling measures, how will these factors impact HDB flat owners who aspire to purchase a private condo? Let’s find out.
Table of contents:
Key considerations when buying a condo and HDB flat at the same time
Watch How to Buy a Condo in Singapore
Here’s a quick video for those who intend to buy a condo in Singapore.
Now on to whether you can own an HDB flat and a condo at the same time!
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 Occupation 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 Minimum Occupation Period (MOP).
Within this period, you are not allowed to:
Rent out the residential property
Dispose of the HDB BTO unit or an HDB resale flat via the open market
Acquire any private property, either in Singapore or abroad
The MOP starts from the date you receive the keys to the HDB BTO unit or HDB resale 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.
Flat bought directly from HDB (includes HDB BTO)
New HDB flats under the HDB Prime Location Housing (PLH) Model
Design, Build and Sell Scheme (DBSS) flat bought from a developer
Executive condominium (EC) bought from a developer
Flat purchased under the Selective En bloc Redevelopment Scheme (SERS)
Five years after receiving the keys*
Flat bought under SERS with Portable SERS Rehousing Benefits
Five years after receiving the keys*
HDB Resale flat bought from the open market with/without CPF Housing Grant
1-room HDB resale flat bought from the open market without CPF Housing Grant
2-room or larger flat bought from the open market without CPF Housing Grant
Flat bought under the Fresh Start Housing Scheme
*For SERS flats announced on/after 7 April 2022, the MOP will be subjected to the amended guidelines. However, the MOP for SERS flats before 7 April 2022 will either be seven years from the date of selection or five years from the date of key collection.
Note: When buying ECs for the first time, buyers need to comply with a five-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 a 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 and 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 private property while owning an HDB flat due to the large expenses involved. That’s because you’ll have to pay a 17% ABSD tax on top of BSD if you want to have these two properties at the same time.
3. Buyer’s Stamp Duty (BSD)
Whether you’re a Singapore Citizen, PR or foreigner, you will need to pay Buyer’s Stamp Duty (BSD) 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 worth 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.
Purchase price/Market value
Rates for residential properties
Rates for non-residential properties
Next $1.5 million
In excess of $3 million
The BSD tax is rounded down to the nearest dollar. For example, if you’re a Singapore Citizen buying a condominium valued at $1 million, your BSD calculation would be:
$1,800 (for the first $180,000) + $3,600 (for the next $180,000) + $19,200 (for the next $640,000) = $24,600.
You could also use our stamp duty calculator to work out your duties payable on your new home.
4. Additional Buyer’s Stamp Duty (ABSD)
If you intend to keep an HDB flat and private condo at the same time, you will also have to consider the ABSD payable.
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.
SCs buying their first property
SCs buying their second property
SCs buying their third and subsequent properties
SPRs buying their first property
SPRs buying their second property
SPRs buying their third and subsequent properties
Foreigners buying any property
Entities (companies or associations) buying any property
Trustee buying any residential property
Housing developers for any residential property
35% (additional 5% if the entity is a housing developer; non-remittable)
For instance, say a property is valued at $1 million but the selling price is $1.1 million. Assuming that you’re a Singapore Citizen who has an HDB flat and is now buying a condo, you will be subjected to an ABSD rate of 20%. The ABSD amount that you’ll need to pay is $1.1 million x 20% = $220,000.
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.
For property loans where the OTP is granted on or after 16 December 2021, homebuyers can only loan up to 55% 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 55% 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 $5,500 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 $3,500 if you want to buy a private condo.
6. Loan-to-Value (LTV) Limit
The LTV limit is adjusted based on the number of outstanding loans a person has. According to the latest rules from MAS, you can only borrow up to 75% if the loan term doesn’t exceed 30 years, 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 Down Payment
Outstanding housing loans
LTV Singapore limit
Minimum cash down payment
75% or 55%*
5% (for LTV of 75%); 10% (for LTV of 55%)
45% or 25%*
Two or more
35% or 15%*
*Take the lower LTV limit only if the loan tenure exceeds 30 years (or 25 years for HDB flats), or if the loan period extends past 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 that 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 private condo costing $1 million as a retirement home, below is the financial breakdown of such a transaction, including the minimum condo down payment with an LTV of 45%:
Minimum condo down payment (assuming bank loan with an LTV of 45%)
Overall upfront cost
Based on the above table, the total amount the couple needs to spend upfront is nearly half a million dollars.
Although you can tap your CPF savings to pay for the minimum cash down payment component, please bear in mind that you can’t use all of it. You still need to set aside a Basic Retirement Sum of $99,400 for members who turned 55 on or after 1 January 2023. 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 have finished paying first for the HDB loan. If you take this route, your upfront cost will be significantly lower. Here is a breakdown including the minimum condo down payment with an LTV of 75%:
Minimum condo down payment (assuming bank loan with an LTV of 75%)
Overall upfront cost
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.
If you’re looking for a home loan for your private property, we recommend you speak with one of our Mortgage Experts for in-depth and unbiased, tailored advice to help you navigate the market.
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