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The article is published with permission from SMTP. For all enquiries regarding this article or if you are seeking legal advice, you may contact Mr Gary at 9107 5225.

INTRODUCTION

By now, most of us are aware that from 1 April 2016 or thereabout, the Housing and Development Board (“HDB”) have imposed restriction, although not explicitly, on spouses of HDB flats who wish to transfer their HDB flat to either spouse to hold the HDB flat as sole lessee with no monetary consideration. We are also aware that this method of transfer, called “decoupling” was used by many spouses of HDB flat previously, in order to free the other spouse to buy another private residential property without incurring the Additional Buyer’s Stamp Duty.

Nonetheless, owing to the change of family circumstances, for examples, the death of HDB flat owners, marriage or divorces, such cases will be considered by HDB when allowing change of HDB flat ownership. For other cases which do not fall within these categories, it would be assessed by HDB on a case by case basis.

In this article, we will look at the criteria and the implications where HDB flat owners may effect change or transfer of their HDB flat ownership within family members with no monetary consideration and the application of remission of stamp duty in such cases.

CONDITIONS OF ELIGIBILITY FOR TRANSFER OF HDB FLAT OWNERSHIP

Any application for transfer of HDB flat ownership (other than a sale) with no monetary consideration within family members is subject to HDB’s prior approval based on the prevailing HDB’s eligibility conditions as set out below at the point of HDB’s receipt of the application.

There must be a valid reason for HDB to consider whether to approve the transfer or change of HDB flat ownership, of which we understand, for examples, divorce, marriage, demised of HDB flat owners, renunciation of citizenship or medical reason. Any other reasons will be assessed by HDB on a case by case basis.

There must also be an immediate family relationship between the proposed incoming HDB flat owners and the existing HDB flat owners, for examples, spouse, parent, children or siblings.

The proposed incoming HDB flat owners, both remaining and incoming, and occupiers must be able to take over ownership of that HDB flat under one of the existing HDB eligibility schemes, for example, Public Scheme.

The age of the proposed incoming HDB flat owners must be at least 21 years old.

The proposed incoming HDB flat owners can either be a Singapore Citizen or a Singapore Permanent Resident, with another HDB flat owner or occupier who is a Singapore Citizen or Singapore Permanent Resident. If they are Singapore Permanent Residents, then they and the essential occupiers must have been Singapore Permanent Residents for at least 3 years.

The proposed incoming HDB flat owners must not be an existing owner or be listed as the essential occupier of another HDB flat (including DBSS flat), and executive condominium bought directly from the developer or within the requisite minimum occupation period.

Finally, the proposed incoming HDB flat owners must not have infringed any HDB/government rules, regulations or policies or be debarred by HDB for the infringement.

IMPORTANT ISSUES TO NOTE BEFORE EFFECTING TRANSFER OF HDB FLAT OWNERSHIP

The proposed incoming HDB flat owners must be able to discharge the existing mortgage loan (if any) of the HDB flat taken with HDB or any financial Institution.

The outgoing HDB flat owners must refund his/her CPF monies (principal and accrued interests) to his/her CPF account(s) upon completion of the withdrawal of his/her ownership of the HDB flat.

There will also be some fees and outgoings payable by the proposed incoming HDB flat owners.

CONDITIONS AFTER THE TRANSFER OF HDB FLAT OWNERSHIP

Any subletting approvals granted by HDB for the whole HDB flats and registration of subletting of bedrooms will be terminated once the application for transfer of the flat ownership is submitted. A fresh subletting application must be submitted after completion of the transaction. HDB will reassess the HDB flat owners eligibility again based on prevailing subletting conditions at the point of application.The proposed incoming HDB flat owners together

The proposed incoming HDB flat owners together with the existing HDB flat owners must fulfil the minimum occupation period before they can sell or sublet the whole HDB flat or before the acquire any interest in a private property.

The proposed incoming HDB flat owners together with the existing HDB flat owners will be subject to seller’s stamp duty if they dispose or transfer the HDB flat ownership within 4 years from the date of acquisition of the HDB flat.

REMISSION OF STAMP DUTY

Under the Stamp Duties (Transfer of HDB Flat within Family) (Remission) (Amendment) Rules 2015, Buyer’s Stamp Duty remission may be applicable to the transfer of a HDB residential flat from one family member to another family member if the following remission conditions are met:

  1. The incoming HDB flat owners, if any, is
    • a member of any remaining HDB flat owner’s immediate family; and
    • a Singapore Citizen or a Singapore Permanent Resident,
  2. no consideration except for the repayment to the outgoing HDB flat owner’s Central Provident Fund Account (principal and accrued interest); and
  3. at least one of the original HDB flat owner remains as the lessee of the HDB flat after the transfer has taken place.

Under these Rules, “Member of the immediate family” in relation to the remaining HDB flat owners shall mean:any of the following persons:

  1. any of the following persons:
    • a spouse of the remaining HDB flat owner;a child of the remaining HDB flat owner;
    • a child of the remaining HDB flat owner;a child of a parent of the remaining HDB flat
    • a child of a parent of the remaining HDB flat owner;
    • a parent of the remaining HDB flat owner; and who will together with any authorized occupier
  2. who will together with any authorized occupier of the HDB flat form a family nucleus with the remaining HDB flat owner.

Once the above conditions are met, the proposed incoming HDB flat owner or his/her legal representative may obtain the remission certificate from the Inland Revenue Authority of Singapore.

Written by: Pan Wai Liong, Advocate & Solicitors

Note: The above article is intended to provide general information. Although we endeavour to ensure that the information contained herein is accurate, we do not warrant its accuracy or completeness or accept any liability for any loss or damage arising from any reliance thereon. The information herein should not be treated as a substitute for separate legal advice concerning particular legal situations. If you would like to obtain advice, please do not hesitate to get in touch with Mr Gary at 9107 5225 of Sim Mong Teck & Partners.

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