Your HDB has reached Minimum Occupation Period (MOP) in year 2022. Now what?
I often encounter clients reaching out to me for advise when their Singapore HDB flat approaches the minimum occupation period.
The MOP is usually 5 years for most HDB properties including Executive Condominiums. Until you have reached this MOP, you are obliged not to sell your property on the open market or rent out the entire unit.
Additionally, HDB property owners cannot buy private residential properties before reaching this MOP.
Table of Contents
No clear-cut strategies once HDB flat MOP is up
At present, there are no clear-cut strategies on the best move homeowners can take once their property has passed the MOP.
It really depends on your personal goals. Some may consider their home an ideal location to live near their workplace, school or in proximity to loved ones.
Others may view their properties as assets or investments that will potentially provide steady rental income or substantial sale profits in the future.
In this article, I’ll provide insights on some of the popular options available to homeowners and some tips on how to determine the best option that fits your plans and current situations.
Continue staying in the HDB flat after MOP
The first option is to remain an occupant in the flat; however it is advisable to check the degree of depreciation of your property value.
The main reason, is the assumed good condition of the flat because it is still new and also of the longer balance lease of the flat, within this time-frame.
This is still on a case-by-case basis, please consult a realtor for more accurate facts and figures.
Check Your Home Price Indication
Buy a Private Property and rent out HDB flat
The second most preferred option is to buy a private property and rent out either property.
In this instance, one must not forget the Additional Buyer Stamp Duty (ABSD) which is mandatory when homeowners buy a second property.
Be warned that if you have an existing outstanding housing loan when you buy the second property, you will only be entitled to 45% housing loan funding for your second property.
Sell your HDB and upgrade to a Private Property
The third option is to sell your flat and upgrade to a private property.
You can choose to buy the second property before selling your HDB flat.
This strategy eliminates the need for temporary accommodations in between the buying and selling of your properties.
Applying for ABSD remission may be applicable to legally married couples who purchase a second residential property jointly, only if the remission conditions are met.
It is important to remember that the couple must consist of at least one Singapore Citizen and the property must be purchased specifically under both names of the couple.
It is also mandatory to sell your first residential property within 6 months after purchasing the second one.
Expanding on the latter option, it is also plausible to sell your HDB flat first and use your CPF returns or cash proceeds to buy a private property.
I wish to highlight that this is a delicate process where your property agent must meticulously plan for the smooth transition and ensure proper accommodation for homeowners.
Sell your HDB and buy 2 Private Properties
Some homeowners can also consider the option of selling their HDB property to buy two private properties.
The key to this is proper financial calculation and planning. In short, the CPF amount and sale proceeds after selling the first HDB flat must be enough for both owners to make their individual purchases.
It is recommended for homeowners to buy a private property for their own accommodation while the second private property serves as an investment, either in the form of rental income or capital appreciation.
I will elaborate more on the ‘Sell One Buy Two’ tactic in one of my popular articles.
Do you know that HDB prices increase more than 17% past two years.
Let’s look at some genuine case studies:
Let’s look at how I helped my clients after their Hdb Mop (after their flats reach 5 years)
Case Study 1
Mr Ang has been staying in a 4 room flat in Punggol with his family.
One month before the property reaches MOP in 2017, Mr Ang contacted us to find out more about his options and in essence, I have gathered that their goals were to:
1) Invest in a property with potential appreciation as their main priority
2) Utilise a low risk investment approach
3) Wait for the right opportunity
With the understanding that they do not require an immediate place to stay, I proceeded to work out both short-term and long-term plans for them.
With my recommendation, we sold the Punggol flat and went ahead to purchase a brand new 2-bedroom condo at Parc Riviera with Mrs Ang as the sole owner; at this point in time, we have not decided whether this property will be for own-stay after its TOP or for rental purposes.
Then in 2019, after going through detailed financial assessments and planning for Mr Ang, he also bought a 1-bedroom resale condo with an existing tenancy to generate immediate rental income.
As a investor interested in taking advantage of the booming property market in Singapore, I needed a realtor with in-depth knowledge of the local market. Using his understanding of the various sectors of the market, Rick generated a investment progression report and we decided to buy a condominium in a choice area with huge potential for multiple returns in the future.
Thanks Rick, I will definitely be doing business with you for a long time!
Buyer - Parc Riviera
Case Study 2
I met Mr and Mrs Chua in 2019. Their 4-room HDB flat in Kim Tian had passed MOP for a year and they were wondering about their next move.
I analysed and shared property transaction trends in their neighbourhood and together, we decided it was time to move on.
Their main priority is:
1)To stay closer to their parents and at the same time, nearer to the city.
Based on their requirements, I evaluated their personal finances and planned their property move such that they did not have to fork out any cash during the entire transaction period.
“In short, Rick did an amazing job. He sold our house at a higher than initially discussed price and got us a good deal for our purchase. Both my wife and I are impressed with his professional yet friendly approach. We will definitely work with him again and recommend him to anyone.”
Seller - Blk 127 Kim tian road
In a nutshell, whether you are staying or moving away from your current home, proper planning and financial knowledge is essential to ensure a fuss-free transaction.
I have successfully advised and helped many of my clients, both property owners and investors alike, to upgrade their lifestyle and build-up their property portfolio.
I too, am grateful for the continuous opportunity to value-add in their property journey.
It does not take much and starts with just a simple phone call.
Bonus for my readers
A Warm Hello From Your Property Consultant
Hey, I’m Rick! A property consultant and your host for this one-time sharing session.
While I wholeheartedly admit that I hope to be engaged and be part of your property journey, I also need you to know that, like you…
– I don’t like sales pitches and being forced into selling and buying
– I am looking forward to working with down to earth people
– Looking forward to a happy property journey
Being happy and proud after a transaction
Turning a client/service relationship into a long term friendship
So, if you have been looking for a trustworthy and honest realtor to begin with, this sharing session just might be the start of your property journey.
Applying is simple!
- click apply button
- allow me 30min of your time
- to go from having questions in your mind to understanding the options available
See you soon!
I have successfully helped hundreds of homeowners just like you since 2010
Property agent review - What my clients say about me
Find this article helpful? Please help to share.
Rick Long, Associate Division Director of Huttons Asia Pte Ltd, has been in the Real Estate industry for more than a decade.
He is driven, committed and is enthusiastic about real estate investments.
Today, he leads Team Youhome.sg, and together, he aims to provide his clients with the best experience in their property journey.
Well-equipped with expertise in residential properties, Rick often impressed his clients with knowledge of market trends, advising on timelines, financial calculations and best options for his clients.
Amidst the hustle and bustle, Rick enjoys quiet time and indulges himself in the intricate art of tea-brewing and teapot appreciation.
He would also take this chance to energize himself and reflect on his personal development and areas of improvement.
He is also a proud fur daddy to 2 rescue kitties and loves spending his free time with his wife and furbabies.
Ever wonder if you are suitable for Sell one buy two investment concept? – Read more (Sell one buy two)
Is buying new launch or resale condo have better returns? – Read more (New Launch vs Resale condo)
Looking to upgrade from Hdb to condo? – Read more (Sell Hdb buy condo)
What to take note when selling Hdb resale flat? – Read more (Hdb Resale Process)
Buying another Hdb flat, and using the fund from current home? – Read more (Hdb contra)
Why do some Hdb flat price depreciate so much? – Read more (Hdb depreciation curve)
What is one of the most common reason for property negative sales? – Read more (Cpf accrued interest)
Financial calculation for selling a Hdb flat? – Read more (Hdb resale calculator)
Buying EC before selling your HDB? – Read more (Upgrade to EC before selling your HDB)
Should you sell your EC after 5 years? – Read more (Selling EC)