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Executive Condominium Buying Guide

What you need to know about buying an Executive Condominium (EC):

Am I eligible to buy an EC?

To be eligible to buy an Executive Condominium, you must fulfill the following criteria:

  • Only Singaporean couples and Singaporean/Permanent Resident couples can buy an EC unit.
  • You must form a family nucleus and be at least 21 years old or join up with other singles that are at least 35 years old.
  • Your total monthly household income may not exceed SGD$16,000.
  • You may not have bought a new EC or HDB flat or with a grant more than once.
  • None of your family nucleus in the application has owned private property within the last 30 months.
  • Buyers have to fulfill a mandatory five-year minimum occupation period (MOP) before they can rent out or sell the EC unit.

For more extensive details about eligibility criteria, please contact us.

Can I buy a new EC if I currently own an HDB flat?

Yes, you can, subject to these criteria:

  • Have not bought a new EC or HDB or resale flat with a grant, more than once in total.
  • Have already stayed in your flat at least 5 years, if bought direct from HDB/the developer or with a grant.
  • Will be able to fulfil your MOP before your new EC is completed, if your resale flat was bought without a grant.
  • However, you must sell your current flat within 6 months of TOP or get vacant possession of your new EC unit.

Can I sell or rent out my EC unit?

  • You must fulfill your Minimum Occupation Period (MOP) first.
  • Thereafter, your EC unite can be rented to anyone, or sold to Singapore citizens or Permanent Residents.
  • After 10 years, it can be sold or rented out to anyone, including foreigners or developers.

What benefits do buyers get?

For First-Time Applicants:

  • You may get the CPF housing grant of up to $30,000 to help pay the 15% down payment:
  • You will get priority in selecting a unit. 70% of units are reserved for 1st time buyers in the first month of launch.

Second-Time Applicants:

  • You can get a bank loan of up to 80% for the new EC purchase, even if you have an existing mortgage on your current home, unlike for private property.
  • ECs allow you to buy a condominium at a large discount (20% to 30%) compared to private condominiums, that will eventually be partially privatized after 5 years, and fully privatized or equivalent to private condos after 10 years.

What are the pros and cons of buying new ECs vs HDB BTO flats?

Buying a new BTO flat directly from HDB:

The Pros:

  • It is a lot cheaper.
  • The maximum household income ceiling is $12,000 to buy a unit.
  • You may be able to get HDB loan.

The Cons:

  • No facilities.
  • Not security on premises.
  • You do not own the land. The land reverts back to HDB after the 99 years lease.
  • Around 5% of flats get to enjoy Selective En Bloc Redevelopment (SERS), but the decision does not lie with you. Your flat will not serve as a wealth or investment vehicle in the long-term.

Buying a new EC:

The Pros:

  • Full condominium facilities.
  • Security on premises to control access.
  • Essentially a condominium. After 10 years, there is no difference between a private condo and an EC.
  • You co-own the land and communal facilities. Theoretically the land reverts back to the state at the end of the lease, but there is the option of selling En Bloc to developers before.

The Cons:

  • Higher price, but potential capital gains may compensate the price difference.
  • Maximum household income ceiling is $16,000 to buy a unit.
  • No HDB loan available. You will need to use bank loan instead.

What is the payment schedule like for buying an EC?

  • At the time of booking the unit, a 5% cash deposit is required via cheque or cashier’s order.
  • Within 9 weeks of booking the unit, a further 15% will be due, which can come from the CPF Housing Grant, CPF funds and/or cash.
  • The remaining 80% is payable progressively. This means payments will be made to the developer as and when construction work reaches certain stages. These payments can come from CPF funds, a bank loan or cash. If you take out a loan, your monthly installments start small and slowly increase.

For more information on loan interest rates, loan eligibility and the maximum amount you can loan, contact us.

What costs are involved?

Stamp Duty:

  • Purchase Price x 3% – $5400
  • This is payable within 2 weeks of signing the Sales and Purchase agreement, or around 5 to 6 weeks after booking the unit.
  • You must sign and return the Sales and Purchase agreement to the developer within 3 weeks of receiving it.

Legal Fees:

  • Approximately $2,500 to $3,500 will be payable to your solicitor.

Bank Loan Fees:

  • If you’re taking out a bank loan, bank admin fees and valuation charges may be involved. These will typically be less than $1,000.

How long does it take to get approval?

  • The time it takes for an EC application to be approved can vary widely. Please contact us here to learn more.

Do I have to pay any agent commission fees?

  • There are no agent commission fees.
  • We provide you with all the information, help you book your unit of choice directly from the developer and handle all the documentation, without charging you anything.

 

Buying an executive condo in Singapore is a go-to for many people who are stuck between not being able to buy an HDB flat due to the income ceiling cap and cannot afford private condominiums either. Executive condos have a reasonable potential for a profitable resale value as these resemble private condominiums with their security, pools, playgrounds, and much more.

To successfully purchase a unit, there are few steps that a buyer has to take. The following steps are almost the same for people who are buying from a private developer or open market.

Eligibility Criteria

The most crucial aspect of buying an executive condo is to check whether you’re eligible for it. The few requirements that need to be met before buying an EC include:

      I.         Age

The buyer must form a family nucleus and be at least 21 years old or, if applying under the Joint Single Scheme, the buyer should be at least 35 years old.

    II.         Family Nucleus

The buyer should also fall under the following HDB schemes.

  • Public Scheme
  • Fiancé Scheme/ Fiancée Scheme
  • Orphans Scheme
  • Joint Singles Scheme

  III.         Citizenship

The buyer must be a Singapore Citizen or Singapore Permanent Resident. If applying under the joint singles scheme, both the buyers must be Singapore Citizens and over the age of 35 years.

  IV.         Ownership of Executive Condo

The buyer must not own any other property locally or overseas. However, you can only apply for an EC 30 days after you have disposed of the property. Another thing is that the buyer could have owned only of these properties previously. These include an HDB flat, an EC, CPF Housing Grant, or a DBSS.

There might be occasions when you can’t apply for an EC unit, such as when you have previously canceled a flat application or have not met the minimum occupation period of the current unit. Moreover, if you have canceled after making a booking, then you will have 1 year to apply again.

For individuals who are undischarged bankrupt, consent will have to be attained from the Official Assignee beforehand. Another important thing to keep in mind is that you can own an HDB flat, an EC, or DBSS flat only twice. This entails that one can only buy the above-mentioned properties twice in total and not twice each.

Ownership of an EC flat is not permissible if an individual has full or partial interest in a local or overseas non-HDB property.

Manage Finances

To be eligible for an EC, the household income must not exceed $1400. However, that is not the only thing related to finances. Other things need to be considered too like

Before buying an EC, you must make a down payment of 25%.

Getting an Approval-In-Principle (AIP) for a bank loan is vital because this will enlighten you about how much the bank will loan you.

You should also take note of the extra costs such as taxes and other legal fees. These mainly include booking fees, conveyancing fees, and BSD.

Explore your EC options

The best thing about an EC is that it is not like HDB flats; it can be directly bought from the developers. You can also visit the HDB’s website to get an idea of the market and get a list of all available/upcoming ECs. The best option is to consult a property agent so that you can get a list of fresh ECs. This will also help you find the EC according to your budget and needs.

Fill Out An Application

If you are looking forward to acquiring a project that is not developed yet, you must fill out an e-application that will go to your developer. The developer will provide you with the ballot number, which means you will be given priority to purchase an EC.

Make a Booking

After submitting the eApps, the applicants will be invited to pick an executive condo of their choice and book it for themselves. The applicants could be selected by the developer by ballot numbers. The applicants should shortlist different types of units, so they don’t miss out if their choice is taken.

Getting a Lawyer and Bank Letter of Offer

The next step is to sign the LO for a bank loan after getting the application approved for a unit. Furthermore, hire a lawyer to deal with legal matters.

S&P Agreements and Payment Methods

After getting the application approved, you will also get S&P documents, and you will have 3 weeks to exercise. After proceeding, you will pay the 15% exercise fee, which will be due in the next 9 weeks of signing S&P.

You also have a choice of 2 payment methods which include the normal payment scheme (NPS) and the deferred payment scheme (DPS).

Get your Executive Condo

After some time, collect the keys to your new home and inspect every inch of the house for any possible flaws. If you find any issues, you can get them fixed as the developer provides a period of warranty. And, there you have it. Those were some crucial steps to follow to get an executive condo.

 

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