Singapore Private Housing Vs. Public Housing

In Singapore, there are different types of properties that can be rented or purchased by citizens and foreigners. These types can be categorized into two main groups which are private housing properties and public housing properties. The private housing properties include landed properties, condominiums, and executive condominiums, while the public housing property includes HDB flats.  Aside from the price, size, and aesthetics, the two main groups also differ in several other factors like housing loan restriction, resale restriction, leasehold and freehold, and eligibility of grants.

1. Housing loan

Most people who are planning to buy any type of property do not have enough money to settle the payment. It is the reason why they ask for a loan from a bank or from HDB. When you are buying a private type of housing, the bank can offer you to borrow only maximum of 80% of the selling price, which might also change depending of different factors such as debt servicing ratio and your CPF balance. You can loan from a bank or the company you are working for. On the other hand, if you are purchasing a public housing, you can be offered a loan up to 90% of the price by the HDB.

2. Resale restriction

When you own an HDB unit then you wanted to rent it out or sell it in an HDB resales price, you needed to wait for five years to make this possible. It is because public housing has a minimum occupancy period. The person who bought the unit must stay in that property before he can be granted the right to rent it out or sell it. In addition, there is a resale levy, which can affect the amount of housing grants that you can get once you decided to buy other public housing property. If you own a private housing, there is no minimum occupancy period that you needed to follow. However, you must consider the seller stamp duty, which is the amount you needed to pay if you sell your property within four years. The amount percentage decreases every year and if you sell the property after more than four years, there will be no seller stamp duty that you needed to settle. As long as you can settle the payment for the seller stamp duty, you can sell your private property anytime you want.

3. Leasehold and freehold

If you own a private property, which is a freehold land, it means you have the full ownership of the land. You have the freedom to do anything with it. You are the sole owner and do not need to comply with other people’s decision because it is yours. All the document properties are in your possession. However, if you have a freehold land, you must be responsible enough to maintain it and repair everything about it. On the other hand, public housing such as HDB flats, have year leasehold that is 99 years. Once the public housing property you owned already expired, it means the right of that property will be given back to the state even if you purchase it.

4. Grant eligibility

One of the things that bother people who purchase public housing property is the government grants. Unlike if you own a Singapore private property housing, there is no need to worry about the government grants because the property is yours and not with any other people or institutions. However, the only form that is subsidized by the government is for the executive condominiums. For owners of this type of private housing, there are still grants when you purchase them that are amounted depending on the level of your income.