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.
