THE Housing Board (HDB) yesterday said that the additional disclosures it is requiring from flat sellers are meant to help them make responsible decisions, not block the sale of flats.

Earlier this week, the HDB introduced a seven-day cooling-off period which sellers must go through, as well as a requirement to submit an enhanced ‘resale checklist’.

The new checklist requires those wanting to sell their HDB flats from Nov 1 to disclose certain information.

Flat sellers will have to state their next housing arrangement, and those buying another HDB flat will have to work out the sales proceeds of their current flat and submit a financial plan for buying the next flat.

This has raised concerns about whether such disclosures by home buyers could be a basis for HDB to reject sale applications. HDB could disagree with the financial plans, for instance.

The resale checklist was first introduced in 2008.

Responding to queries yesterday, HDB said the objective of the enhanced checklist and financial plan was to assist sellers in making an informed decision.

‘More importantly, it is to help sellers plan ahead and consider where they would be moving to after they sell their flats. It is not meant to make the resale process unduly onerous or to block the sale of the flat,’ it said.

‘However, it is the sellers’ and their agents’ responsibility to work out the financial plan and to draw their own conclusions on whether the seller would have proper alternative accommodation after the sale of the flat,’ it added.

PropNex chief executive Mohamed Ismail said it was unlikely that HDB would intervene in practice. ‘This form is just a thought process for HDB sellers, to see roughly whether or not they can afford the next purchase,’ he said.

Home seller Victor Ching, 52, who recently put his Yishun flat up for sale to test the market, felt that the checklist was slightly troublesome but a good thing.

‘Many buyers tend to spend the money too quickly after they sell their homes, but they don’t know how to calculate how much they actually earn from the sale after the deductions, like CPF (Central Provident Fund) and paying for the next flat,’ he said.

Another potential seller, Ms Teh Ailin, in her 30s and living in Sengkang, noted that the information required was ‘quite personal’, but agreed that it was justified as she would have to do those sums anyway.

Also, some of the information required, such as the seller’s monthly income, is already provided to the HDB.

HDB provides a financial calculator on its website for flat sellers to determine their sale proceeds and financial plan.

Sellers are asked for information such as the price of the flat, their gross monthly income and expenditure to determine the amount of monthly repayment for their new flat.

After sellers have submitted the checklist and waited for seven days, they can grant the option to purchase to the buyer.

The cooling-off period and the enhanced checklist came after MPs called for such a provision during a recent Parliament sitting.

MP for Hong Kah GRC Ang Mong Seng told The Straits Times he fully supported the changes as he had seen appeals from constituents who sold their flats because of bad financial advice or pressure to sell their homes fast.

‘I’ve encountered aged home owners who sell their flats to settle debts in the family, then they end up with no money left to buy the next house,’ he said.

West Coast GRC MP Cedric Foo, chairman of the Government Parliamentary Committee for National Development and Environment, said he had come across similar situations where residents who had already sold their flats were desperately looking for new accommodation, claiming they had been misled by agents.

‘I think the checklist helps in terms of making sure that anyone who sells is clearly aware of how they’re going to get the next flat, and how they are going to finance it,’ he added.

Source: Straits Times, 21 Oct 2010

Foreigners, PRs make up just small part of this housing sector: Experts

PLANNED changes to rules on foreign ownership of landed property are not expected to make much of a splash, with demand and prices for these high-end homes set to stay the same, experts said.

Foreigners and permanent residents (PRs) make up only a small portion of the landed housing market – an average of 6.6 per cent of total transactions over the last 10 years according to CB Richard Ellis (CBRE).

Any ripple effect from the new rules would be ‘negligible’, the experts added.

One of the proposed changes set out in the Residential Property (Amendment) Bill, introduced in Parliament on Monday, states that home owners with landed property would have to dispose of their property within two years if they give up their Singapore permanent residency or citizenship status.

Failure to do so could see owners faced with a fine not exceeding $20,000 or a three-year jail term, or both.

PRs who are uncertain about where they want to be based permanently, however, might now choose to purchase a condo rather than a landed property as doing so would come without such obligations, the experts added.

On Monday, National Development Minister Mah Bow Tan released figures showing that locals make up the bulk of private home buyers in Singapore. PRs made up 13 per cent and foreigners 12 per cent of sales in the second quarter, respectively.

Mr Ong Teck Hui, Credo Real Estate head of research and consultancy, said that since the landed housing market was primarily driven by locals, the impact of the new rules would be insignificant.

‘A PR who is interested in purchasing a landed home is unlikely to be deterred unless he has a sense of uncertainty over staying on in Singapore,’ he added.

Cushman & Wakefield managing director Donald Han said the changes served to ‘tie up the loose ends’, bringing the existing Act – introduced in 1973 – in line with housing policies as it prevented foreigners from speculating in Singapore’s property market.

OrangeTee’s head of research and consultancy Tan Kok Keong said the rules might provide a push for PRs to buy high-end condos instead as PRs who could afford landed homes were affluent.

He said that foreigners made up only a small segment of the landed housing market as the Government had been quite strict with them owning such properties. Foreigners need permission from the Land Dealings (Approval) Unit (LDAU) before they can own landed property.

On mainland Singapore, the main criteria are that they are PRs and that they make an adequate economic contribution. However, non-PR foreigners may buy landed homes at Sentosa Cove, subject to LDAU approval.

Usually, foreigners may buy landed homes not exceeding 15,000 sq ft in land area. They may, at any one time, own just one landed home in Singapore and it must be for owner occupation only.

On the mainland, foreigners also have to hold the property for at least three years before selling. There is no minimum holding period for Sentosa Cove.

CBRE said PRs were responsible for 165 – or 5.5 per cent – of 3,007 landed home transactions from Jan 1 to Sept 9.

This figure ranged from a low of 4.4 per cent in 2000 to a high of 6.8 per cent in 2006 over the past 10 years.

Most of the PRs bought terrace houses this year, with the highest number of landed home transactions taking place in District 15 – which includes Katong, Telok Kurau and East Coast Road – followed by Districts 10 and 19.

Source: Straits Times, 20 Oct 2010

SPOT CHECKS are in store for Housing Board (HDB) flat buyers, to see if they are breaking the rules on owning private property in Singapore or overseas.

Minister for National Development Mah Bow Tan said yesterday the public housing authority will conduct spot checks both locally and overseas, to determine if HDB flat buyers are lying about their interests in other properties.

He was responding to a question from Ms Lee Bee Wah (Ang Mo Kio GRC) who voiced what has been on the minds of Singaporeans: how HDB will trace whether an HDB owner has a foreign property.

The HDB had recently announced that those who buy an HDB resale flat on or after Aug 30 must dispose of their private property – including any held overseas – within six months of the HDB purchase.

Mr Mah explained that at the point of purchase, HDB flat buyers are required to declare any interest or ownership in private property, local or overseas.

Those guilty of false declarations can be liable, on conviction, to a fine of up to $5,000 or to imprisonment for a term up to six months, or both.

If it is discovered before the completion of the purchase, HDB can cancel the application.

If the discovery is made after the sale, HDB can compulsorily acquire the flat.

‘For practical reasons, HDB adopts different approaches to check on private property ownership in different countries.

‘I am unable to disclose the details to avoid hampering HDB’s enforcement work,’ said Mr Mah.

Source: Straits Times, 19 Oct 2010

PEOPLE intending to sell their Housing Board (HDB) flats from Nov 1 will have to observe a seven-day cooling-off period before the deal can proceed.

If the designated waiting time has not been met, the HDB will reject the resale application. The seven-day period starts from the time the resale checklist has been completed until the granting of the option to purchase.

The new rules announced yesterday underline the need for financial prudence before buying or selling a home, said the HDB. It noted that its flats are meant for long-term owner occupation and that buying or selling one is a significant decision that should be considered carefully.

The cooling-off move is part of a series of enhancements to the resale checklist and sale procedures to help buyers and sellers make informed decisions, the HDB said.

Checklists were introduced in 2008 to ensure that both parties in a transaction know the key resale and financial policies before they sign on the dotted line.

People who intend to sell their flats should consider their finances carefully and plan for their next accommodation, while buyers should also exercise financial prudence, the HDB said.

The new rules will require buyers and sellers to be a bit more hands-on with the checklist. New requirements include:

Sellers will have to state their next housing arrangement. If they intend to buy another flat, they will have to work out the estimated sales proceeds of the existing home and submit a financial plan for their next purchase, said the HDB.

Sellers must deposit a soft-copy of the checklist and supporting documents such as estimated sales proceeds and their financial plan at the HDB’s website by the following day after they complete the resale checklist.

They will then need to submit the original copy of the checklist together with the option-to-purchase (OTP) at the first resale appointment. This is scheduled with HDB for the resale transaction to be processed.

‘If the date on the original copy differs from the soft-copy submitted through (the HDB website), or if the OTP is dated within seven days from the checklist, the resale application will be rejected,’ the HDB said.

Buyers of resale flats who are not using an agent will also have to submit the resale checklist together with the resale application form. Previously, only buyers with agents had to.

Some of the changes were advocated in Parliament by MPs, including Mr Ang Mong Seng (Hong Kah GRC), who suggested earlier in the year that a one-week cooling-off period be imposed.

Madam Halimah Yacob (Jurong GRC) said yesterday that people would now get a chance to reassess their situation, especially if they were subject to pressure to buy or sell their flat fast.

She cited a couple with four young children who sold their flat as they could not service the loan and wanted to downgrade. But they went into a business venture using the sales proceeds and lost everything. The couple could not get a bank loan and had to look for a rental flat.

‘It’s such a sad situation because it could have been avoided had they been given proper financial advice, or some time to think it through,’ she said.

Madam Halimah added that the resale checklist was also very important as many people do not realise that a portion of the sales proceeds go back to their Central Provident Fund accounts.

HSR chief executive Patrick Liew said that he would occasionally hear of sellers who had not done their calculations well and had sold their property despite being unable to afford another.

HDB flat owner Stella Ong said that although she has no plans to sell her flat, the rules were welcome as they would give her more time to think through the complicated sale process.

‘At least now I know that there’s a temporary exit door to take if I ever feel uncomfortable with a transaction after thinking about it,’ she said.

Source: Straits Times, 19 Oct 2010

PRs, citizens who give up status have to sell property within 2 years
HOME owners with that prized landed property address may have to dispose of their property within two years if they give up their Singapore permanent residency or citizenship status.

Failure to do so could see owners faced with a fine not exceeding $20,000 or a three-year jail term, or both.

There is no such requirement currently. This new rule is one of the proposed changes set out in the Residential Property (Amendment) Bill, introduced in Parliament yesterday. If passed, the new Bill will also stiffen penalties.

The Act, first introduced in 1973, imposes restrictions on foreign ownership of restricted properties, namely landed homes, strata-landed housing and vacant residential land.

Foreigners – who must be permanent residents in this case – must get approval from the Singapore Land Authority before buying such ‘restricted’ properties.

The penalties have not been revised since 1974. The new Bill will introduce harsher penalties for those who breach the rules.

Under the Act, foreign buyers can only purchase one landed home for owner-occupation and cannot rent it out.

He must also sell his existing property before buying a new one, and is not allowed to sell the property in the first few years of ownership. The exact period depends on whether the property is still under construction or completed.

Owners found to breach the above rules will be fined up to $200,000 – up from $5,000 previously, with a new fine introduced of $2,000 per day for any continuing offence.

Another change requires a foreigner who inherits a landed property to sell it off within five years instead of 10 years.

Rules for foreign private developers will also change. A developer is considered ‘foreign’ if it has any foreign shareholders or directors, so this includes major developers here such as public-listed developers CapitaLand, Keppel Land and City Developments.

Under existing rules, they have to complete their developments within a certain timeframe and sell all units within two years of receiving the Temporary Occupation Permit.

Under the Bill, developers may be charged a fee for any extension of time beyond the given period, similar to rules under the Urban Redevelopment Authority’s Government Land Sales programme.

Managing director William Wong of RealStar Premier Property, a landed home specialist, did not think the proposed changes would have a big impact on the landed housing market, noting that ‘most PRs who relinquish their status do try and sell their homes when they leave Singapore anyway’.

Source: Straits Times, 19 Oct 2010

Amendment Bill also raises penalties for foreign buyers who flout rules

(SINGAPORE) The law which governs foreign ownership of landed residential property in Singapore, will be amended to make it costlier for foreign developers to speculate in land here.

The Bill to amend the Residential Property Act (RPA), introduced in parliament yesterday, also aims to increase the penalties imposed on foreigners who flout the rules.

The RPA, which was first introduced in 1973, mandates that ‘foreign’ housing developers – that is, developers with overseas shareholders and/or foreign directors – must obtain approval to buy private residential land. They are also required to develop and sell units in a ‘timely’ manner.

The Act also states that permanent residents need approval to buy restricted properties – that is, landed properties and vacant residential land.

They can each buy only one restricted property for owner-occupation and are not allowed to rent out the property. They are also not allowed to sell the property within the initial years.

Right now, foreigners and permanent residents own just over 3 per cent of Singapore’s total landed residential stock of close to 70,000 units.

The RPA was last amended in 2006. The new amendment Bill introduced yesterday refines safeguards to prevent developers from speculating. In addition, the penalty framework will also be enhanced to ensure that it continues to be effective and relevant.

Many penalties have not been revised since 1974, despite significant increases in the standard of living and residential property prices in Singapore.

Currently, the RPA mandates that foreign housing developers must complete residential developments within five years (the specified project completion period). They must also sell all units within two years from the time the project receives its temporary occupation permit.

The developers also cannot sell undeveloped residential land.

With the new amendment Bill, the Law Ministry is now proposing that developers who fail to complete and sell their developments within the stipulated period will be subject to a new extension charge framework.

They will pay for the extension of time beyond the original completion timeframe – similar to what they face under the extension premium scheme for sites sold under the government’s land sales programme.

Other amendments ensure that foreign purchasers who flout the rules of ownership under the RPA will also face increased penalties.

For example, those who break the rules while buying or selling a restricted property will now face a non-compliance fine of up to $200,000 and/or a three-year jail term, as well as a fine of $2,000 a day for continuing offences. Right now, they face a fine of up to just $5,000 and/or a three-year jail term.

In addition, foreign beneficiaries of restricted properties will have to sell their properties within five years, down from 10 years now. And former Singapore citizens and ex-permanent residents will also have to dispose of their restricted properties within two years after giving up citizenship or permanent resident status.

The amendments are expected to take effect by the end of the year.

Source: Business Times, 19 Oct 2010

LANDED home owners may have to dispose of their property within two years if they lose their permanent residency or citizenship status.

Failure to do so could see them fined up to $20,000 and/or jailed up to three years.

This tougher new rule is part of the proposed changes set out in the Residential Property (Amendment) Bill, introduced in Parliament on Monday.

If passed, the new bill will also increase a range of other penalties outlined under the Act.

The Act was introduced in 1973 and imposes restrictions on foreign ownership of restricted properties, namely landed homes, strata-landed housing and vacant residential land.

Foreigners, in this case referring to PRs, must get approval from the Singapore Land Authority before buying. The penalties have not been revised since 1974, despite significant increases in residential property prices.

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Stiffer penalties for foreign owners

One key change will see penalties increased for foreign owners who breach the rules. Under the Act, foreign buyers can only purchase one landed home for owner-occupation and not for rental.

He must also sell his existing property before buying a new one, and is not allowed to sell the property in the first few years of ownership. The exact period depends on whether the property is still under construction or completed.

Owners found to breach the above rules will be fined up to $200,000 – up from $5,000 previously, with an additional fine of $2,000 per day for any continuing offence.

In the past, a foreigner who inherits a landed property must sell off the property within 10 years – the new bill has shortened this to five.

Another key change will affect property developers, who have to complete their developments within a certain timeframe and sell all units within two years of receiving its Temporary Occupation Permit (TOP).

Now, developers will be charged a daily fee for any extension of time beyond the given period, similar to the Urban Redevelopment Authority’s (URA’s) Government Land Sales programme.

Source: Straits Times Breaking News, 18 Oct 2010

SINGAPORE: More changes are on the way for the regulation of Singapore’s property market.

From November, sellers of Housing & Development Board (HDB) flats will have to observe a seven-day cooling-off period before they can grant an Option-to-Purchase (OTP) to the buyers.

And foreign owners of landed property could face tougher rules under changes being proposed by the Law Ministry.

The HDB said in a statement on Monday that the seven-day cooling-off ruling is part of the enhanced resale checklist and submission procedures to better protect the interests of sellers and buyers and help them make informed and prudent decisions.

From November 1, sellers of HDB flats, acting with or without agents, will have to observe a seven-day cooling-off period after they have completed the resale checklist, before granting an OTP to the buyers.

The enhanced checklist also requires flat sellers buying another HDB flat to work out the estimated sale proceeds of their current flat and a financial plan for the purchase of the next flat.

Additionally, buyers of resale flats, acting with or without agents, will also be required to complete and submit the resale checklist, which was introduced in 2008 to ensure that HDB flat sellers and buyers are aware of the key resale and financial policies before they commit to a transaction.

New rules are also in store for foreign ownership of landed residential property, if a new Bill introduced in Parliament on Monday is passed.

The Law Ministry is proposing to amend the Residential Property Act, which regulates foreign ownership of restricted properties in Singapore, so as to enhance its penalty framework.

The Act was introduced in 1973 and imposes restrictions on foreign ownership of restricted properties, namely landed homes, strata-landed housing and vacant residential land.

Foreigners, in this case referring to PRs, must get approval from the Singapore Land Authority before buying. The penalties have not been revised since 1974, despite significant increases in residential property prices.

Among the proposed changes set out in the Residential Property (Amendment) Bill is that landed home owners must dispose of their property within two years if they lose their permanent residency or citizenship status.

Failure to do so could see them facing a S$20,000 fine and/or a 3-year jail term.

Foreign beneficiaries of landed properties must also dispose them within 5 years, instead of the earlier 10-year time-frame.

And currently, foreigners who purchase landed properties are not allowed to rent them out.

Under new rules, those caught doing so will face a penalty of S$10,000 or up to three times the rental income collected during the period of breach, whichever is higher.

The new HDB ruling and the proposed changes by the Law Ministry follow a slate of property-cooling measures announced at the end of August.

These included barring buyers from owning both a HDB flat and a private home within the Minimum Occupation Period.

National Development Minister Mah Bow Tan told Parliament that it is too early to assess the full impact of the recent measures, but said there are signs of greater stability in the market.

He cited a slower increase in private residential property prices over the quarters – 3.1% in the third quarter of FY2010 compared with 5.3% in Q2.

Mr Mah said: “The take-up of private residential properties has decreased in September this year as compared to August. And the recent level of sub-sales has been relatively low. In the public housing market, the number of resale flat transactions in September has decreased by 25 percent compared to August.”

On foreign ownership of landed properties, Mr Mah said: “The proportion of landed residential properties purchased by PRs and foreigners has also been relatively low, accounting for less than 6 percent of all landed housing transactions for the past two years.”

In the light of recent changes in HDB policy on the ownership of overseas properties, MP for Ang Mo Kio GRC, Lee Bee Wah, wanted to know if HDB would allow exemptions for those who inherited foreign properties out of bequests.

Mr Mah clarified that this would not be possible. He said: “HDB is unable to allow exemptions for those who inherited these overseas properties, as a general policy. However, I will ask HDB to look into the circumstances of special cases upon appeal.”

Source: Channel News Asia, 18 Oct 2010

SINGAPORE : The Housing and Development Board (HDB) is unable to allow subsidised flat owners from owning overseas properties, even if they are inherited.

National Development Minister Mah Bow Tan said this in Parliament on Monday in response to a question from MP Lee Bee Wah, who asked whether HDB will allow exemptions to those who inherit foreign properties out of bequests.

“HDB is unable to allow exemptions for those who inherited these overseas properties as a general policy. However, I will ask HDB to look into the circumstances of special cases on appeal,” said Mr Mah.

Mr Mah said the ministry has received a few hundred appeals from Permanent Residents (PRs) on this issue.

When asked how many of the appeals have been successful, Mr Mah said HDB is in the process of assessing them.

Under the current policy, HDB flat buyers are not allowed to own local or overseas private properties concurrently, within the Minimum Occupation Period.

From end August this year, the same rule also applies to buyers of non-subsidised flats.

Mr Mah said this is to ensure that those who can afford private properties anywhere do not compete for limited public housing subsidies.

He added that HDB flat buyers are required to declare any interest or ownership in private property, local or overseas.

Mr Mah also said that HDB conducts spot-checks locally and overseas.

The penalty for false declarations is a fine of up to S$5,000 or a jail term of up to six months, or both.

Source: Channel News Asia, 18 Oct 2010

SINGAPORE: From November, sellers of Housing & Development Board (HDB) flats will have to observe a seven-day cooling-off period before they can grant an Option-to-Purchase (OTP) to the buyers.

The cooling-off period starts after they complete a resale checklist which will have to be submitted online to the HDB website.

The checklist was introduced in 2008 to ensure flat sellers and buyers are aware of the key resale and financial policies before they commit to sell or buy a resale flat.

The HDB said the enhanced resale checklist would also require sellers to state their next housing arrangement.

HDB added if sellers intend to buy another flat, they have to work out their estimated sales proceed of their current flat, and submit a financial plan for their next flat purchase

Buyers of resale flats, acting with or without agents, will also be required to complete and submit the resale checklist.

The HDB said the enhancement was part of regular reviews to better protect the interests of sellers and buyers and help them make informed and prudent decisions.

Currently, agents engaged by sellers or buyers are required to go through a resale checklist with the sellers or buyers to highlight key policies and procedures before the sellers or buyers would grant or exercise the OTP.

After the OTP is granted or exercised, sellers or buyers are required to submit the completed checklist to HDB together with the resale application form.

Sellers and buyers without agents are encouraged, but not required, to go through a separate Do-It-Yourself (DIY) resale checklist.

They also do not need to submit the checklist to HDB.

Source: Channel News Asia, 18 Oct 2010