Diplomatic clause

A Diplomatic clause is to safeguard the tenant in the event the tenant is no longer employed (especially if they are foreigners).

Typically, in a 24 mths lease, it states that tenant can terminate the lease after 12 mths by giving 2 months notice.



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Commission payable to Property Agents

These are old guidelines from the Institute of Estate Agents (IEA).
Now consumers are free to negotiate the amount with the agents.

* Buyer's agent will typically take a cut (0.5%) of the purchase price from the seller's agent




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Steps to a Property purchase

* Before making an offer ensure that you have gotten an indicative valuation from a bank and an in-principle approval for a mortgage.
- approach the different banks yourself or use a mortgage broker to save time.
- if already have outstanding housing loan, LTV limit is now set at 60% (else LTV is 80%)
- if purchase of flat with HDB loan, a HLE letter must be obtained before committing to the sale

* Once you get the indicative valuations and at least 1 pre-approved mortgage from the banks, you can then make an offer

* If deal is strucked, usual practise is to put down a 1% deposit to get the Option To Purchase (OTP), and have 14 days to exercise it, by which time you will have to pay another 4% of the purchase price
- This 5% must be cash payment

* Once OTP is exercised, liaise with conveyancing lawyer and mortgage banker to settle the remaining procedures
- typical conveyancing fee ~$2k

* Before the completion date, do an inspection of the home to confirm that all agreed on fixtures/items are still around.

* On transaction date itself, collect complete set keys from seller.


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Speed Limit violations

Driver's Improvement Point System (DIPS)

* Any DIPS pts will be erased if maintained 12-mths free of DIPS offences

* Suspension invoked when accumulated DIPS of 24 pts or more

CPF Life (updated)

CPF LIFE Standard Plan
At age 55, your RA savings up to the Minimum Sum Cash Component (MSCC) applicable to you will be deducted as the first annuity6 premium.

The balance will remain in your RA until your Drawn-Down-Age (DDA) when a second deduction will take place.

* Current DDA is 65.

CPF LIFE Basic Plan
At age 55, a small portion, say about 10% of your RA savings will be deducted as the first annuity premium.

CPF Board will calculate the annuity premium that needs to be deducted from your RA based on your gender and age.

You will be informed of the exact amount of annuity premium deducted from your RA when your LIFE Basic Plan is issued.

The balance will remain in your RA and a second deduction will take place at DDA.

 

CPF LIFE Payout Estimator

Eg. A full $148k set aside for CPF Life will probably get around $1,100 of monthly payout.

######## Refund ########

* Savings used to join CPF LIFE (including the annuity premium) will be refunded if a member passes away before any payout has been made.

* If the member passes away after the monthly payout has started, his RA balance, if any, and unused annuity premium on death will be refunded



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CPF Contribution and Allocation Rates

From 1-Sep-11, the employers’ CPF contribution rate will be increased by 0.5%.
The increased contribution will be credited to the employees’ Special Account (including those above 55 years of age).











Currently CPF contribution is capped at $4.5k (known as Ordinary Wage (OW) Ceiling).
From 1-Sep-11, OW ceiling will be up to $5k.

Renting out HDB flat

Guidelines for renting out your HDB

1) To sublet the entire flat, you need to satisfy the following conditions of Minimum Occupation Period (MOP) :

i) MOP of at least 3 years if your Non-subsidised(*) flat was purchased before 30 Aug 2010;
ii) MOP of at least 5 years if your Non-subsidised flat was purchased after 30 Aug 2010;
iii) MOP of at least 5 years if yours is a Subsidised flat

* Non-subsidised flat = flat purchased from the open market w/o a CPF housing grant


2) Maximum Number of Subtenants allowed :

- Flat Type : 1-room/2-room ------> max 4 persons
- Flat Type : 3-room -------------> max 6 persons
- Flat Type : 4-room & bigger ----> max 9 persons



Refer to HDB website

HDB concessionary interest rate loan

HDB Housing Loan

1) Flat buyers can apply for an HDB loan if you and / or your essential occupiers (if any):
(a) have at least one buyer who is a Singapore citizen;
(b) have a gross monthly household income not exceeding $8,000;
(c) have not previously taken two or more HDB concessionary interest rate loans;
(d) do not own any private residential property^ in Singapore or overseas;
(e) have not disposed off any private residential property^ within 30 months before the date of application for HDB Loan Eligibility (HLE) and have never taken any HDB concessionary interest rate loan;
(f) do not own more than one market / hawker stalls or commercial / industrial
property in Singapore or overseas;
(g) own one market / hawker stall or commercial / industrial property and operate the business yourself;
(h) are buying a 5 room or smaller resale flat under the Single Singapore Citizen (SSC) Scheme with a gross monthly income not exceeding $3,000.


2) From 1 Jan 2007, HDB will require all potential flat buyers and transferees who wish to get an HDB concessionary loan to first obtain an HDB Loan Eligibility (HLE) letter. This HLE letter must be obtained before committing to the purchase or transfer of a flat. This will provide prior information on your loan eligibility quantum and monthly instalment to ensure you are able to pay for your home and service the loan without overstretching your finances


Refer to HDB website

Buy Resale HDB

Eligibility To Buy Resale HDB : Single Singapore Citizen Scheme

Single citizens who are 35 years old can buy a resale HDB flat under the Single Singapore Citizen Scheme.
There is no restriction on the flat type or location.

Eligibility conditions :

1) Age

i) Unmarried Person/Divorcees : at least 35 years old

ii) Widowed Person : at least 21 years old.

iii) Orphan : at least 21 years old, At least one of your deceased parents was Singapore Citizen (SC) or PR (SPR).
- An orphan buying a resale flat for himself/herself must not have another sibling who is below 35 years old and buying a flat separately under Orphans Scheme/Single Singapore Citizen Scheme/Joint Singles Scheme

2) Ownership/Interest in Property (Singapore or Overseas) other than HDB flats

i) You can own private property (unless applying for CPF Housing Grant and/or an HDB loan).

ii) However, you/co-applicants/occupiers must dispose of any interest in any private residential property within 6 months from the completion of the purchase of the resale flat


Refer to HDB website

Singapore property market cooling measures

19 Feb, 2010
1) Introduction of a Seller’s Stamp Duty (SSD) on all residential properties & lands that are sold within 1 year from the date of purchase :
i) SSD at 1% for the first $180,000,
ii) SSD at 2% for the next $180,000,
iii) SSD at 3% for the balance

2) Lowering Loan-to-Value (LTV) limit to 80% for all housing loans
MAS press release



30 Aug, 2010
1) Increase holding period for imposition of SSD from current 1 year to 3 years
i) if sold within the 1st year of purchase,full SSD rate will be imposed:
ii) if sold within the 2nd year of purchase, 2/3 of the full SSD rate will be imposed.
iii) if Sold within the 3rd year of purchase, 1/3 of the full SSD rate will be imposed.

2) For property buyers who already have one or more outstanding housing loans at the time of the new housing purchase:
i) Increase the minimum cash payment to 10% (from 5%)
ii) Decrease LTV limit to 70% (from 80%).

HDB-related :
3) Allow households earning between $8k-$10k to buy new DBSS flats with a $30k CPF Housing Grant;

4) Increase the Minimum Occupation Period (MOP) for non-subsidised flats to 5 years;

5) Disallow concurrent ownership of both HDB flats and private residential properties within the MOP
This is ONLY applicable for private property owners buying HDB
HDB owner buying private property will be subjected to existing restriction .ie. owner must stay in HDB and rent out private, not vice versa.
HDB press release
MAS press release



14 Jan, 2011
1) Increase holding period for imposition of SSD from current 3 years to 4 years

2) SSD rates will be increased as follows :
i) SSD at 16% if the property is sold in the 1st year of purchase
ii) SSD at 12% if the property is sold in the 2nd year of purchase
iii) SSD at 8% if the property is sold in the 3rd year of purchase
iv) SSD at 4% (currently no SSD) if the property is sold in the 4th year of purchase

3) Lower the LTV limit to 50% on for property purchasers who are not individuals

4) Lower the LTV limit to 60% (from 70%) for individuals with 1 or more outstanding housing loans at the time of the new housing purchase.
- Borrowers without any outstanding loans continue to have a LTV cap of 80%.
MAS press release




8 Dec, 2011
Introduction of an additional buyer's stamp duty (BSD), on top of existing BSD, on the purchase price or market value of the property (whichever is higher), with immediate effect.

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12 Jan, 2013

a) Additional Buyer’s Stamp Duty (ABSD) rates will be raised :
- bet 5% and 7% points across the board.
- to include PRs purchasing their 1st residential property and on Singaporeans purchasing their 2nd residential property

b) Loan-to-Value limits on housing loans will be tightened for individuals who already have at least one outstanding loan, as well as to non-individuals such as companies.

c) Min cash down payment for individuals applying for a 2nd or subsequent housing loan will also be raised from 10% to 25%

d) HDB will offer housing loans with Mortgage Servicing Ratios (MSRs) of up-to-35% of the gross monthly income, down from prev up-to-40%
MSR for housing loans granted by financial institutions is capped at 30%

e) PR will be disallowed from subletting their whole flat, but can continue to sublet rooms

f) PR must dispose of their HDB flats within 6 mths of purchasing a a private residential property in Singapore

g) Limits on the use of CPF funds for the purchase of HDB flats with < 60 yrs of lease remaining
(effective 1-July-2013)

h) New EC measures
- max strata floor area of new EC units will be capped at 160 sqm.
- sales of new dual-key EC units will be restricted to multi-generational families only
- developers of future EC sale sites from GLS will only be allowed to launch units for sale 15 mths from the date of award of the sites, or after the physical completion of foundation works, whichever is earlier

i) Introduction of SSD on industrial property
- 15% will be applied for properties sold within the 1st year of purchase
- 10% will be applied for properties sold within the 2nd year of purchase
- 5% will be applied for properties sold within the 3rd year of purchase

The new ABSD structure is as follows:

Citizenship	ABSD Rate on 1st Purchase	ABSD Rate on 2nd Purchase	ABSD Rate on 3rd & Subsequent Purchase
Singapore Citizens	Existing: NA Revised: NA	Existing: NA Revised: 7%	Existing: 3% Revised: 10%
Permanent Residents	Existing: NA Revised: 5%	Existing: 3% Revised: 10%	Existing: 3% Revised: 10%
Foreigners and non-individuals (corporate entities)	Existing: 10% Revised: 15%	Existing: 10% Revised: 15%	Existing: 10% Revised: 15%

	1st Housing Loan	2nd Housing Loan	From 3rd Housing Loan
LTV Limit	Existing Rules 80%; or 60% if the loan tenure is more than 30 years or extends past age 65 Revised Rules No change	Existing Rules 60%; or 40% if the loan tenure is more than 30 years or extends past age 65 Revised Rules 50%; or 30% if the loan tenure is more than 30 years or extends past age 65	Existing Rules 60%; or 40% if the loan tenure is more than 30 years or extends past age 65 Revised Rules 40%; or 20% if the loan tenure is more than 30 years or extends past age 65
Minimum Cash Down Payment	Existing Rules 5% (for LTV of 80%) 10% (for LTV of 60%) Revised Rules No change	Existing Rules 10% Revised Rules 25%	Existing Rules 10% Revised Rules 25%
Non-Individual Borrowers	Existing LTV Limit 40% Revised LTV Limit 20%

29 Jun, 2013

Monetary Authority of Singapore (MAS) introduced a Total Debt Servicing Ratio (TDSR) framework for all property loans granted by financial institutions (FIs) to individuals.

The new policy states that property loans extended to borrowers cannot exceed a TDSR of 60%. (ie. the total debt of borrowers cannot be more than 60% of their income)

Total debt will include mortgage repayments, and any other debts such as car loans, credit card debts and personal loans.

Eg.
Household combined income = $7,570
Based on TDSR of 60%, their total monthly debt (including mortgage loan repayments) cannot exceed $4,542 (60% of $7,570)

Assuming current monthly car loan installment = $1,500
Therefore maximum monthly mortgage repayment = $3,042 ($4,542 - $1,500)

And based on a 30-year housing loan @ 3.5%, maximum loan they can get = $677,438.
Assuming LTV of 80% (ie. 20% cash), maximum property price they can get = $846,797

Buy New HDB

Eligibility To Buy New HDB : Public Scheme

Eligibility conditions :

1) Must be 21 years old

2) Applicant and :
- spouse, and children (if any)
- parents, and siblings (if any)
- children (for widowed/ divorced)

3) Income ceiling


i) 3-room (mature towns/estates), 3-room (Premium), 4-room or bigger flat:

- Gross monthly household < $8k

- Gross monthly < $12k (if buying with your extended family)


ii) 3-room (non-mature towns/estates)

- Gross monthly household < $5k


iii) 2-room

- Gross monthly household < $5k



4) Ownership/Interest in Property (Singapore/Overseas) other than HDB flats:


You, your spouse, any occupiers listed in the Application Form or their spouses must not own/dispose/have an estate or interest in any other flat, house, building or land Within 30 months


- before the date of application,

- and between the application date and the date of taking possession of the flat




Refer to HDB website


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Protected conveyancing money from 1-Aug-11

From 1-Aug-2011, protect your conveyancing money by ensuring that "-CVY" is added after the law firms's name when you make payment by cheque or cashier's order to a Law firm.

Lawyers for both the buyer & seller most jointly sign before money can be withdrawn from a special account with Appointed banks or Singapore Academy of Law.

Refer to Ministry of Law website for details.